They said they would maintain a payout ratio of 50% at cap...

They said they would maintain a payout ratio of 50% at cap raising a while back for at least a few years. 50% payout ratio is 10% off debt per year. Debt is at 7.5%. this means earnings are increasing profit 3.5% from interest savings alone. What would they buy? another dying company? Not a big fan of companies forcing growth through purchasing a company that isn't as good? It'd have to have a PE around 5 to be value accretive against SWMs current price.

It is not necessarily a good thing to have a strong balance sheet. assume a 50% chance the industry dies and a 50% chance they workout how to sell their content online and continue making money. If the company is going under because the industry is dead then you want it leveraged to the hilt. If the printing presses are paid off then in this situation you are screwed because the printing press is worthless. No point in retaining income to pay off a worthless asset. Leave everything for the banks (except the cash). If they are a going concern then they'll be making good money and they can afford the debt they have. They won't need balance sheet strength but shareholders would enjoy the money in the back pocket.

The current payout ratio is enough to keep banks off their back while maximising cash extraction from what is possibly a dying asset.