While everyone knew that it was only a matter of time, it is still remarkable to witness the incredible, rapidly accelerating decimation taking place in the daily newspaper industry. Like watching the demolition of a Las Vegas casino from the 50’s, the countdown on setting off the explosives laced throughout the daily newspaper industry has been going on for years.

Well, we’ve hit zero and the explosions are rocking the country. First there was Chicago with the bankruptcy of the Tribune Company, followed by Minneapolis as the Star Tribune fell last month. And just this past weekend, the Journal Register declared bankruptcy, taking with it its 20 daily newspapers and 159 non-daily newspapers. And Philadelphia Newspapers, a unit of Brian Tierney’s Philadelphia Media Holdings and owner of the Philadelphia Daily News and the Philadelphia Inquirer, is expected to declare bankruptcy today.

We’re just getting started on what will undoubtedly be an incredible year of destruction. And even though we all knew it was coming, the ferocity of the devastation will be riveting throughout.

As exciting as any horse race you’d ever see at Churchill Downs or Saratoga, the Minneapolis Star Tribune and Tribune Co. are neck and neck in the much-hyped D.I.D. (Daily Insolvency Derby). The old-time Norris Division/’Black & Blue’ NFC Central rivals Chicago and Minneapolis have rounded the 4th turn and are heading down the stretch with only 23 days left to see which metro market will lose its daily newspaper first. Just last Friday, rumors circulated around the Twin Cities that Credit Suisse was preparing yank ownership of the Star Tribune away from Avista Capital Partners in what would amount to a controlled bankruptcy. While some thought that race might be over, reports have come out today that Tribune has hired Lazrd to oversee a bankruptcy proceeding that might begin as soon as this week. It’s anyone’s race at this point and we’re undoubtedly in for a photo finish.

In its latest attempt to stave off the inevitable, the Minneapolis Star Tribune is demanding that its unions trim off $20 million in annual salary and cost reductions or the daily newspaper will be forced to declare bankruptcy. The company also acknowledged that Avista Capital Partners will be writing off the remaining $25 million on its books for the original $100 million equity investment ($75 million has already been written off). Regardless of what the unions decide to do, Minneapolis has stretched its lead as the most likely first major metro market in the U.S. to lose its daily paper. Time is running out, but I still have 28 days left for one of my 2008 predictions to come true.

For the past few months, I’ve assumed that the Major Metro Daily Death Match was primarily a contest between Chicago and Minneapolis to see which major U.S. metro market would lose its daily newspaper first. Of course, every daily newspaper is struggling to one degree or another (most quite severely) and dozens of papers are in desperate shape with heavy debt loads that are dragging them towards bankruptcy. But I didn’t think any were as close to complete insolvency as the Tribune and the Star Tribune. It turns out, however, that there is a 3rd horse in the race in the form of the Portland Press Herald.

The Portalnd Press Herald has followed the textbook path along the daily death spiral. Circulation has declined 13% over the past decade, and advertising revenue has dropped 19% from last year. To bring costs in closer alignment with a massively shrunken revenue base, the paper has initiated 4 rounds of layoffs this year and closed all of its out-state bureaus, including Augusta, the state capitol. In court documents filed last month related to an ongoing battle between the paper’s owners (Seattle Times Company) and its editorial union, the paper stated that it is bleeding cash so fast that it will have to shut down if it isn’t sold in the very near future.

Looks like it’s going to be anyone’s race, and more horses are sure to join the pack of front-runners. An exciting photo finish is almost a certainty. Mint juleps anyone?

As bad as the news has already been this summer about the two dailies in the Twin Cities, it keeps getting worse and worse. Earlier this summer, the Pioneer Press announced that they were scaling back their daily and the Star Tribune announced that they were delaying interest payments. Now, as detailed on MinnPost, it seems a more likely possibility that Media News could sell the St. Paul Pioneer Press. And for the Strib, the paper may be declaring bankruptcy as soon as September. The Minneapolis daily skipped its June interest payment and has indicated (or threatened) in contract negotiations with its unions that it likely will be skipping the next one due in September. Minneapolis is now clearly ahead of Chicago and the nation’s other major metro markets as the odds-on favorite to be the first major U.S. city to lose its daily paper.

My list of blog topics to write about has become exceedingly long, so I’m going to be lazy today and simply list a pile of links to the numerous stories in the past few weeks about the continuing death spiral of the daily newspaper industry.

1. A Durham lawyer is suing the News & Observer, to which he subscribes, for cutting staff and content from the paper.

2. In an effort to ‘right-size’ the paper, creating an equal balance of ad pages and content pages, the Chicago Tribune has cut more staff from the newsroom. They’ll eventually get their balance when both ad pages and content pages are zero.

3. The Guardian, which recently purchased Paidcontent for $30 million, has a great piece about the demise of the newspaper industry. This is a paper that appears to be bucking the trend and thriving these days, so their critique of other dailies is particulalrly poignant. Anyway, the best line of the article relates to management at most daily papers – “The core problem is that too many newspapers tend to be run by blockheads from the top down. This did not matter back in the days when the margins were fat and the competition weak. It is a problem now.”

4. The lanaguage in the coverage of the industry gets stronger and stronger every month. An article in MediaPost uses the word ‘collapse’ for the first time that I can remember.

5. Another article in MediaPost compares the fates of both daily newspapers and radio.

6. This is an old article from May, but the trials and tribulations of the Minneapolis Star Tribune have been noticed overseas, catching the attention of the Guardian.

7. MediaNews Group CEO Dean Singleton’s advice to newspaper execs – stop being so arrogant!

8. Gannett is writing down its assets by $2.8 billion.

9. McClatchy is also making draconian cuts.

10. As papers continue to approach a brutal death, their willingness to maintain high editorial standards and integrity in their business models will be put under increasing strain. While some might argue that a lack of integrity and editorial standards are not new to the industry, and others that cases of failure already abound, the likelihood is that daily newspapers will become even more aggressive in chasing revenue wherever they can get it. As Nick Corcodilos points out, advertorials are one such egregious example.

Avista Capital Partners, owners of the Star Tribune, announced this morning that they did not make their quarterly interest payment on the $96 million in junior debt that accompanied the roughly $330 million in senior debt used to finance the $530 million purchase of the daily newspaper. While CEO Chris Harte reported that the company has sufficient cash to make the interest payment, he stated that they chose not to make the payments as the company works through renegotiations on the terms and structure of the debt and the entire balance sheet. While Harte’s comments may or may not be accurate, the daily is most certainly now in default on a meangful portion of its debt and is one step closer to insolvency.

In the race with Chicago to see which metro market loses its daily first, Minneapolis has clearly taken a sizeable lead. Interestingly, just as Tribune’s fate might depend on the success of the Cubs and the value that that franchise might fetch in the market with cash proceeds being used to pay down debt, the Star Tribune’s fate is similarly tied to the Minnesota Vikings who are eyeing the paper’s land holdings in downtown Minneapolis on which they are exploring building a new stadium. Who would have thought that the demise of two prominent dailies could be such a ’sporting’ event.

With the well-documented problems plaguing both Midwestern dailies, it’s a toss-up as to which metro market will lose its daily newspaper first, Minneapolis or Chicago. The Newsosaur Alan Mutter has another great post today on the vastly different approaches that Rupert Murdoch and Sam Zell have taken since both acquired their newspapers roughly 6 months ago, and the New York Times has also chimed in on the preposterous path that Sam Zell is taking in trying to save his business by slashing everything in sight. As Mutter rightly points out, what is even more shocking than Zell’s apparent lack of any cohesive plan he is following is the fact that his creditors loaned him more than $12 billion without asking about what he intended to do to fix a dteriorating business model. Everyone in this deal except the poor Tribune employees (who also happen to be owners) deserve exactly what they’re going to get in this deal – nothing but an obliterated business left in complete shambles after everything of value has been sold off piecemeal.