Following the company's June downgrade by Standard & Poor's from B minus to CCC, MediaNews Group (MNG) CEO Dean Singleton sent a memo last week reassuring staff about the company's future, The Paper Trail blog reported.

MNG's major investor Hearst continues to support the company. Singleton mentioned that MNG would soon announce a future transaction with Hearst.

Strategies like the joint Kaangoo and PS investment or the Yahoo! consortium are in progress, Singleton declared.

“MediaNews doesn't believe cost cutting is a long term strategy. However, we recognise that there is a structural change in our business, and we must align our cost structure accordingly,” Singleton stated in his memo. “Individual newspapers can only cut costs so far without impacting the perceived value to advertisers and readers.”

Singleton pointed out that the company is in agreement with its bank deal and is trying to diminish its total debt.

He criticised rating agencies like S&P for not being fast enough to revise ratings, and said that they “have now gone to an extreme and are being overly conservative with their ratings.”

Editor & Publisher reported the ratings downgrade in an article June 20.

For a previous article on this topic from the SFN Blog, click here.