So your local newspapers have declared bankruptcy…

The news is here. Jim MacMillan does a roundup here. And it’s probably worth re-reading Steve Volk’s Phillymag article about how we got to this point.

There’s going to be a great deal of temptation, today and in coming days, to mock the hubris of Brian Tierney in all of this. And that’s not entirely unwarranted. It’s also not entirely fair, because Tierney’s problems — declining ad revenue, so-so print circulation, rising costs for printing on paper and unsustainable debt — can be found everywhere in the newspaper industry. It’s why the Rocky Mountain News appears headed for closure, maybe by the end of the month, even though the competing Denver Post is only barely keeping its head above water. (Disclosure: RMN editor John Temple once hired me for a web startup that went south; I have only fond feelings for him.) It’s why Tribune — owner of the fading-glory L.A. Times and Chicago Tribune — is in bankruptcy. Hell, even the New York Times and Wall Street Journal aren’t immune. If you’re employed in journalism — if you love it and crave it — the march of headlines over the last year has probably made you want to curl up and hide under your desk.

Although let’s be honest, too. Newspapers still haven’t figured out how to do a good job making money from the Internet. Only now it appears they’ve run out of time to do so.

The trouble here is knowing exactly what to root for. Do you root for the bankruptcy process to be smooth, for the Inquirer and Daily News to emerge from bankruptcy in some diminished-but-still-fighting form? (For all their shortcomings, the papers do yeoman’s work covering crime, City Hall and sports in Philadelphia.) Or do you root for the process of destruction to get on with it already — not because you hate news, and certainly not because you want to see tons of local journalists out of work — but because that’s the only thing that will force the emergence of a sustainable post-newspaper form of journalism?

My temptation is to root for the former. But honestly, I don’t know if that’s the right answer. And in any case, the second option may have its way with us whether we want it to or not.

UPDATE: In the comments below, my friend Ben Boychuk suggests that going to paid subscriptions for online content may be the way to go.

I’ve subscribed to the Wall Street Journal’s online edition for years, and it’s worth every penny. The gist of what Gordon Crovitz writes in that piece is “People are happy to pay for news and information however it’s delivered, but only if it has real, differentiated value.” More important: “The right information in today’s complex economy and society can make a huge difference in our professional and personal lives. Not having this information can also make a big difference, especially if someone else does have it. And for valuable information, online is a great new way for it to be valued.”

There’s a couple of problems with this, at least as far as the Inky and Daily News are concerned.

Ben’s right: Lots of people are happy to pay for the Wall Street Journal online. But that’s because the Wall Street Journal is considered authoritative on a niche subject — financial news — that A) a wealthy demographic covets and B) nobody else delivers quite as well. Consumer Reports is another success story in the paid content realm, and for much the same reason.

General-interest publications — like, say, newspapers — can’t make that model work. The New York Times is as close to authoritative as it comes, with regards to daily news and opinion. But its TimesSelect project, which charged for online access to the Op-Ed page and NYT archives, failed. If the Times can’t make it work, probably no one can. (I’m sure that Ben will make some observation about no one wanting to pay for a daily firehose of liberalism, but even the Wall Street Journal makes its opinion section free. What’s the saying about opinions and assholes?)

The other problem is what you might call the competition paradox. It doesn’t do Philly.com any good to start charging for content if its competitors — the websites of all the TV stations, radio stations, gossip bloggers and (ahem) alt weeklies in town don’t also charge for access: The audience, quite sanely, will go to the free websites.  I call it a paradox because of this: Every reporter, editor and producer at those other outlets start their day by opening up the Inky and Daily News. While there are good journalists at all those outlets, the fact is that daily newspapers and the websites tend to drive the news agenda for the entire community. It’s debatable whether that’s a good thing, but it’s also reality.

So if Philly.com starts charging for content — and based just on the Twitter accounts of some key online figures at Philadelphia Media Holdings, I’d say that’s unlikely — the audience will go to other outlets, which will perversely soon have less content to offer because Philly.com won’t be able to sustain itself.

So wise guy, what’s the answer?

Well, for all the problems of declining revenue, etc., it appears that the Philly newspapers would be profitable if they didn’t have so much debt. And it appears they have so much debt because Brian Tierney’s group took on a lot of debt to buy the newspapers. If you could go back five years and start telling rich people not to borrow lots and lots of money to buy major newspapers, that would be a smart thing to do. Absent time-traveling DeLoreans, however, there’s not much — beyond the Chapter 11 filing — that can be done.

That said: Maybe there is no answer. Maybe the day of general-interest news coverage is fast coming to an end, to be replaced by niche-driven web reporting sites that either have very low overhead or can charge for content. That’s not an answer I like, but you have to consider the possibility.

UPDATE II: At WHYY, Tom Ferrick writes about what can be expected next: A little union-busting.

When it comes to the Guild, management’s main goal probably will be to end or cripple the seniority system so it can lay off senior staffers (many of whom make between $70,000-$80,000 a year) and replace them with cheaper labor (at $26,000-$46,000 a year). They tried hard in the last contract talks to do it. Under Chapter 11, they have a new chance.

And if the workers refuse to make these additional concessions? Well, here is one card the owners will probably lay on the table: liquidation. The papers cease operation. The company closes down.

I don’t think that will be the outcome. More likely, PMH will emerge from this time of trial as a much smaller, leaner operation — with diminished products and less capacity to perform what its audience sees as it principal task – intelligent, timely and accurate coverage of the news.

UPDATE III: As expected, Will Bunch peels back the curtain for the scene at the Daily News last night.

This is a newspaper, after all, so there was a fair amount of gallows humor (when phone rang from the front desk at midnight to sat “the papers are here,” we weren’t sure if it was the early edition of the Inquirer, or the local sherrif). Around 9 o’clock, the Daily News managing editor Pat McLoone huddled the smallish night staff around the sports copy desk to tell us — yes, off the record — what he knew, which wasn’t really much more than what you can read in this morning’s paper. Reporters and copy editors — several of whom had spent the prior 15 minutes Googling and Wikipedia-ing Chapter 11 — calmly asked what you’d expect people to ask, such as, ”Will I still get paid?” (yes, we’ve been informed).

Last night at 11:38 p.m., Brian Tierney, the CEO of the Daily News’ parent, sent out an “Important Notice” to employees. One of the things he told us was that “[i]It is important that you provide reassurance to the advertisers, readers and business contacts with whom you interact that PNL continues to do business as usual.” It’s funny, because I’m so often not on the same page with management, but I guess in an odd way my message is exactly that. Some day even the pizza man may abruptly stop coming. But last night was living proof of what I’ve believed from Day One of this crisis.

The news lives on.

UPDATE IV: Media consultant Mark Potts has some observations about Brian Tierney’s optimism — and about the likelihood of Philadelphia remaining a two-daily-newspaper town.*

Despite rosy statements about the state of the business by PMH CEO Brian Tierney–including some in internal meetings this past week, I hear–the situation there has been untenable for some time. As was the case at the Minneapolis Star Tribune, the combination of enormous acquisition debt, the declining state of the newspaper business and the struggling economy was a lethal recipe for local owners. Tierney’s a smart guy, but he and his partners may have been, shall we say, a bit too optimistic and idealistic about what they were getting into when they purchased the papers two years ago.

While Tierney insists that the papers’ operations won’t be affected by the bankruptcy filings, that’s hard to believe. Indeed, it may not even be Tierney’s call–as the bankruptcy court and the bankers step in, Tierney’s control of PMH may be substantially weakened. At best. Even before the bankruptcy filing, there was ongoing speculation in Philadelphia about further significant staff cuts and perhaps even the shuttering of the Daily News (it sure seems odd to run two newspapers in the same city these days, doesn’t it?). With the creditors and court in control, the choices in Philadelphia are likely to be much less benevolent than they’ve been under Tierney. That would be unfortunate for the many good people at the Inquirer, Daily News and Philly.com.

*Sorry Evening Bulletin. No matter what the Wall Street Journal says, you don’t count.

UPDATE V: There’s always been speculation that the Daily News is at death’s door, but the bankruptcy filing seems to have convinced some observers that the day is drawing near. Reflections of a Newsosaur’s Alan Mutter chimes in:

The gritty and colorful tabloid – whose circulation is about a third of its sibling, the Philadelphia Inquirer – is the most logical place for publisher Brian Tierney to find the significant operating savings that will enable him to restructure the debt that has overwhelmed his young media company.

Closing the Daily News would enable Tierney to achieve across-the-board savings on everything: editorial, production, marketing and circulation. The shutdown of the Daily News presumably would give management the ability to eliminate certain positions mandated today under contracts with the unions that produce and deliver its papers.

Most of the savings probably would be go toward repayment of the company’s debt in the new deal that Tierney has said he hopes to craft with his lenders. When the economy turns around, any surplus profits generated by the surviving Inky could be used to fund such potential strategic projects as suburban weeklies or online and mobile initiatives.

UPDATE VI: The disembodied voice of Brian Tierney lets you hear him say what you’ve already read him say.

UPDATE VII: Ah, the love-hate relationship we have with our newspapers.

Brendan Calling takes care of the “hate”:

Personally, I think you could fire almost every columnist in the Inquirer and Daily News and no one would miss them. The Philadelphia Newspapers LLC is going down because their newspaper is crappy. Even the comics section sucks.

The fact is, I get better and more accurate news on the Internets, and unfortunately, neither of Mr. Tierney’s publications offer me what I want. That seems to be so for much of the city, and that’s just plain sad: Philly deserves a quality source for news. Philadelphia Newspapers LLC ain’t it.

Above Average Jane takes care of the “love”:

By now you will have read that the parent company of the Philadelphia newspapers has gone into bankruptcy. This isn’t good. If you don’t subscribe to the paper already, please sign up pronto. Our house has two subscriptions, one print and one electronic, so Mr. J and I don’t have to fight over it in the morning.

If Brian Tierney can only get every other household in the city to buy two subscriptions, this thing’ll be over pronto.

UPDATE VIII: Well, Forbes kinda answers the question of whether to root for Brian Tierney or not.

As the parent company of The Philadelphia Inquirer and Daily News slid toward the Chapter 11 bankruptcy filing it made over the weekend, one employee did well on the pay front: CEO Brian P. Tierney.

Documents filed Sunday by Philadelphia Newspapers LLC and seven affiliates said that the pay of Tierney, a public relations executive who put together the investment group that bought the paper from McClatchy in June 2006 for $562 million, was boosted just two months ago by 38% to $850,000.

But an affidavit by Richard R. Thayer, executive vice president, finance, said the company was still saving money because Tierney “without an increase in compensation” became publisher of both papers in the fall of 2006 after the $565,000-a-year incumbent resigned. Even though Tierney in January 2008 demanded a 10% pay concession from workers, his own pay was bumped up 3% in May 2008 to $618,000. Then came the big boost around Christmas.