Collapse of the US newspaper industry: Goodwill, leverage and bankruptcy

Abstract

The study examines financial factors that magnified the collapse of the US newspaper industry in the mid-2000s when advertising revenues plummeted. The study shows how goodwill, debt and leverage magnified the collapse and hastened the bankruptcy of a number of newspaper companies. The study also tests the applicability of Altman’s Z-score model for predicting bankruptcy of newspaper companies.