Well, What Happened?

Though much needed to happen to resolve the Cardinal's $137,700 debt, the Cardinal paid its final creditor and printer, Madison Newspapers, Inc., the remainder of the debt, $4,400, . on Friday, Feb. 7, 1997. This was two years -- to the day -- after it had completely ceased publication for the first time in its history.

Much of the Cardinal's difficulties were blamed on individuals not billing advertisers. The real problems went much deeper than it was originally thought.

"Unfortunately, we knew there was a problem before the shutdown," Chris Terry, a former member of The Daily Cardinal Newspaper Corporation's Board of Directors, said. "Though we never admitted it then, it was obvious that the board was negligent in its duties."

The board met only twice during the fall 1994 semester, in late August and late November. At neither meeting were finances discussed. Only after the shutdown were finances made a priority.

The financial situation was tight: $137,700 of debt. A product of a lax structure and low expectations, the Cardinal's incomplete board of directors was sluggish in its response, incomplete in its action and lacking in leadership.

By May 1995, three months after the shutdown, little had happened. It appeared the Cardinal needed some direction to get results.

 Three major events changed the Cardinal's situation. First, new leadership took control of the Cardinal. Second, the Cardinal found a way to continue printing. Third, the Cardinal found a way to reduce its costs.

Of all of the problems the Cardinal faced, the greatest was finding people to solve its problems and do the work. Most of the staff put the Cardinal behind them, either via graduation, defection to the Badger Herald or internship. The board was still incomplete. This high turnover opened doors for those ready to contribute.

"Turnover on the board was helpful. It allowed new faculty to get on board, including Professor Denis Collins in April 1995," Lauri Schumacher, herself one of those new board members, said.

Collins, Schumacher, incoming editor Valerie Panou and Business Manager Vince Filak replenished the board's ranks. Alumni Chris Terry, one of the few pre-shutdown board members, and Anthony Sansone assisted the rebuilding with their planning and organization efforts. Though the ranks thinned again when Terry and Panou had left at the end of May, those that remained redoubled their efforts.

The Cardinal's most pressing problem was finding a printer, which with the Cardinal's credit all but destroyed, proved difficult. MNI was reasonably close and capable of printing a daily paper. Lucky for Filak, the Cardinal's past financial mismanagement helped the paper save itself.

"When looking through our assets, I found an 'extra' certificate of deposit for $5,500 at the Marshall and Isley bank," Filak said.

Filak saw the CD as the means to leverage MNI and allow the Cardinal's continued printing.

"I told Rita [Thalman, assistant to MNI's controller] that she would get this CD if she accepted it at double its value," Filak said. "Rita and Pam [Wells, the controller] agreed verbally. MNI would get more cash than they would have otherwise. We further agreed that they would get 60 cents on the dollar over time for the remainder."

It looked to be a great deal for both parties. The Cardinal needed to continue printing and MNI wanted their money. Obviously, things could not have ended that easily.

"The following day, Rita calls me and tells me the agreement would not work," Filak said. "Basically, they reneged. I then told her I had one board meeting in four hours. She had to decide what she wanted to do."

In three hours, Thalman called back. MNI agreed, with one stipulation: If the Cardinal missed one $1,000 monthly payment, the full amount would be due that day.

With the debts negotiated, the Cardinal had only $11,700 with which to begin a new semester of printing. Unfortunately, the paper was in no condition to support daily publication. Some additional capital would be necessary to bring the Cardinal to an operating level.

When continuously printing, though a daily newspaper generates revenue, it usually does not see the cash for another 30 days. By July 1995, the Cardinal had gone without producing new revenue for five months. it needed a definite and steady income to start again. The amount was one month's printing: which was about $36,000: 30 broadsheet issues at $1,200 each.

It was then that the Student Services Finance Committee began to close the gap. Then-SSFC Chair Dean Troyer made the Cardinal an overture of assistance.

Tom Bernthal, then-acting business manager, brought this idea to the board on March 7. Though timing was crucial to the Cardinal's survival, more questions arose. The $36,000 figure seemed impossible without a campus-wide referendum. The Cardinal, with Terry taking the point, moved ahead. On March 18, Terry faxed a copy of the Cardinal's first proposal to Troyer.

Progress abruptly stalled. Although the SSFC wanted to help, it could not before the Board of Regents approved the 1995-96 biennial budget. This delayed any action until July 1, when the budget would be passed.

This problem now facing the paper was complicated five-fold, as the staff needed to make a proposal: (a) palatable to the SSFC, (b) low enough not to encourage a referendum, (c) sufficient for the Cardinal's needs, (d) not cover the immediate need of printing and (e) quick enough to wrap everything up by early August, before the staff returned for publication.

The printing issue came to light when Connie Wilson, the assistant dean of students, told the Cardinal that if SSFC paid for printing, it would set up and own the contract. This bound the Cardinal to the UW-Madison, and the bid would take at least six months.

Fortunately, Filak figured that it would be just as helpful to reduce the Cardinal's operating costs. The proposal then became a $12,500 capital loan. The Cardinal did not print 30 issues every month. The Cardinal, as a weekday paper, would print only 19 issues the first month, requiring about $12,000. It was in the bank.

The first SSFC meeting took place in late July. The SSFC wanted proof that the Cardinal would improve. In response, the Cardinal presented its 1995-96 budget, a draft of its bylaws, the status of its debt settlements and the proposal. Though the staff was prepared, the meeting was far from easy.

The reaction to the presentation and proposal was favorable, but the SSFC needed time to discuss the details. The two groups would meet again in two weeks.

The greatest problem belonged to SSFC.

"The biggest question was where we were going to get the money," Zwiefelhofer said.

Unknown to anyone at the time, the outgoing chair had already allocated $20,000 for "printing."

The staff's final problem was the board. At the August 12, 1995 board meeting, board members felt that continued printing, even with the SSFC funding and bank balance, was not a 'given.' Board members talked about moving to the web-only paper, then about putting conditions on printing. Finally, Collins had enough. He said that the Cardinal would print, without conditions.

The final collective sigh of relief has came from the Cardinal's staff, board and alumni on February 7, 1997. The final payment to MNI, built from a small-scale alumni fundraising drive that generated $6,000 in five weeks, was delivered on February 5, 1997, postdated for the seventh.

"The 'Rebound Campaign' showed me that others cared," Filak said. "Well, when you were in the backshop on a Saturday night, delirious from a lack of sleep, tearsheeting a semester worth of papers, you'd say to yourself, 'Yeah, where's Jeff Greenfield now?!' Well, he is here, and, I think, he will continue to be."