The Strib on Blackstone Group: We mean business, not bankruptcy

After a day of furious activity and speculation in the wake of Sunday's surprise revelation that the Star Tribune had brought in restructuring expert the Blackstone Group in an attempt to avert bankruptcy, the Strib has finally released a new statement, albeit in the form of an article about itself. The message: "Bringing in Blackstone, Star Tribune means business."

Translation: Even the Strib's own reporters don't seem to know what to make of the revelation. The usually astute Chris Serres is reduced to positing anything from "new loan terms to additional equity investors in the paper." The paper's own spokesman, Ben Taylor, declined to comment, as did the spokesman from the mysterious Blackstone Group.

What isn't in doubt is that the Strib is in serious financial trouble:

But the Star Tribune's decision to hire the Blackstone Group indicates the newspaper is trying to deal with the financial ramifications of this decline head-on, before it becomes a full-blown crisis, said analysts. "They see the iceberg ahead and they hired Blackstone to try to manipulate the rudder and change course before they hit it," said Tom Corbett, an equity analyst who covers the media industry for Morningstar.

And as much as the Strib was whistling through the graveyard at the mention of bankruptcy yesterday, it's hard to escape that specter when you read paragraphs like this:

Considered a heavyweight in the world of large-scale corporate turnarounds, New York-based Blackstone has advised Delta Air Lines, Enron, Global Crossing and other embattled corporations through their Chapter 11 bankruptcy reorganizations. "To bring in a heavy hitter like Blackstone, you know the problems at the Star Tribune must be serious," said Ed Atorino, managing director of the New York investment banking firm Benchmark Capital. "They're in there to do more than just talk to the banks. They're in there for a longer-term outcome."