By Chief
McClatchy Corporation, parent of our local rag the Sacramento Bee, is teetering on the brink of insolvency, so I figured I would explain to their employees and writers how this occurred. Basically, McClatchy is headquartered downtown and is, in a sense, a newspaper conglomerate. It grew over the years from a small family owned (McClatchy family) paper into a large publicly traded company.
Over the years, they bought a few other daily papers and in 2006 they purchased a company far larger than them; Knight-Ridder–owners of about 20 daily papers; thus, forming a company with 30 daily newspapers. McClatchy is now the second largest newspaper chain in the US. However, the deal was ill fated; so much so that many analysts called it akin to a dolphin swallowing a whale. We entered a large recession soon after the purchase and by 2008 the company had lost 98% of its value. McClatchy’s stock was trading for less than a dollar! The executives did some financial engineering, stock splits, private investment, and sold some assets (the headquarters building) and stemmed a little of the bleeding. The company had layoffs and buyouts offered to employees every year, they even tried to grow digital (currently $129.99 yearly), but it’s been a slow climb. Finally, these past couple weeks, the company has finally realized the fate lies in a Chapter 11 bankruptcy restructuring.
Suddenly, it seems, everyone is talking about McClatchy’s future. A week ago the Sacramento-based company, the nation’s second-largest newspaper chain, said it’s facing a potential cash shortage. The news touched off speculation about the publisher’s future, including a potential sale of the company.
Sacramento sheriff attacks McClatchy, as company’s pension and debt burdens pile up
And, for the first time since its finances began deteriorating more than a decade ago, the company is publicly contemplating the possibility of filing for Chapter 11 reorganization.
How bad did things get at McClatchy? They haven’t made a pension payment since 2009, and to remain compliant they must pay in 124 million by next year…more cash than the company has on hand. So, the answer is to foist this payment on the taxpayers!
… (McClatchy) has approached the federal Pension Benefit Guaranty Corp. about taking over its pension plan — a move that, if successful, would alleviate the need to contribute $124 million into the plan next year.
McClatchy said it approached the government about the pension plan after the Internal Revenue Service rejected McClatchy’s request for a three-year waiver on its required pension contributions. Without the waiver, McClatchy is due to pay $124 million into the plan next year, a sum that “greatly exceeds the company’s anticipated cash balances and cash flow,” McClatchy said in a prepared statement.
McClatchy also needs to work out a deal with their largest creditor Chatham Asset Management. McClatchy currently owes 708 million in debt and they have no means by which to even cover the interest anymore. Essentially, they need Trump impeached and Obama re-instated in the White House and to hope for an automaker-esque government bailout. Because as two Standard & Poor’s (S&P) analysts on Wall Street say, McClatchy will run out of cash by September next year. If you are wondering, the company will likely file Chapter 11 early next year after the Pension Guarantee Corporation declines the request to take over their pensions. To further their arrogance, McClatchy approached the Tribune, a larger company, about a merger to, in a sense, continue to delay the inevitable. Just adding more debt and more cash flow to service the debt into the future…sound familiar?
… a deal with Tribune would make a lot of sense for McClatchy because it could spread its debt over “a much larger cash flow. The (combined) company would be in much better shape than McClatchy is.”
Those talks fell apart.
This company is toast and they did it all to themselves.
Allow me to explain. They bought Knight-Ridder, which was a mistake. The family (McClatchy) owns 80% of the voting rights so what they want/say goes and no one can object. Currently, papers are dying and real journalism is going down with it. To say not a soul foresaw this should be criminal. To be fair Warren Buffett was buying papers and everyone likes to mimic the Oracle of Omaha. The debt pile was manageable for a while, but circulations decreased every year, the gig economy took away the need for classified ads, the wanted ads were replaced by Craigslist and the like. Worse yet, the papers decided to go on a war path criticizing any politician on the right, and openly rooting for any left-wing loon…hence the rise of Obama. This caused a huge readership decline, yet they doubled down on their arrogance. So, they helped push Obama over the finish line to a second term while denigrating Mitt Romney and his supporters. This caused another decline in readership. The rise of the smartphone and smart technology was never dealt with, people stopped needing a daily reader, as most updates on a third-party news app would make the paper pointless. None of this mattered. McClatchy continued doubling down on an ever-shrinking audience, Trump won, and the paper changed its tune, saying now they would hold all politicians accountable…. that’s laughable and everyone saw through it. Recently having pushed false narratives such as; Russian collusion, Ukraine quid pro quo, and a slew of other garbage not fit for print.
Now a closer examination of the leftist rag in McClatchy’s own backyard the Sacramento Bee. This paper hasn’t been worth anything in years, several scandals involving Democrat elected officials in our capital (literally blocks from the paper) went unreported (by the way they have an entire Capital Bureau mind you). Hard news became unchecked opinion pushed as fact. They no longer have a beat writer for the NBA team (again they play just down the street) and all the columns are now Associated Press as opposed to local journalists. They attack our elected sheriff yet ignore our Legislature and District Attorney when they decline to prosecute criminals or release them early . They criticize a super minority of Republicans in the Legislature, yet they have ignored the rampant malfeasance of Democrats in the Legislature and elected office such as our Insurance Commissioner’s scandalous pay-to-play policy. They employ Marcos Breton and allow local sewer rat, Bruce Maimon, to spew their stink daily; yet told Dan Walters, their last good reporter, to take a hike. Rumor has it, Walters does a periodic column, but he is happily retired, and I am happy for him! The local section disappeared; the food critic changes over more frequently than The Troll stalks Hope Hicks. Memo to the Bee, there is an app called Yelp; look it up. Your food critic is dead weight, and no one cares. Your sports section stinks, very little local coverage, not many people care about high school football. Recently the Bee announced that the Saturday paper will cease and be replaced with an expanded Friday and Sunday editions.
To support these shifts, starting on Feb. 22, we will no longer produce a printed newspaper on Saturday and will launch with a Weekend Edition that includes expanded newspapers on Fridays and Sundays. Many of the features that you enjoy on Saturday such as comics, puzzles, TV listings, real estate, home and garden and local sports coverage will now appear in expanded editions in print on Friday and Sunday. On Saturdays, we will continue to publish breaking local news to our website and social media platforms and we invite you to visit our website or eEdition, which replicates the experience of a printed newspaper online.
The Sacramento Bee is replacing Saturday print edition with expanded Friday, Sunday papers
The Friday edition no one reads and the Sunday version you finish after your 8th cup of coffee all while ignoring the Saturday folks who read the comics or the puzzles, I’m sure the circulation won’t drop farther. When you get a papercut, chopping off entire limbs is not how I learned how to take care of myself.
Folks I feel compelled to make this point as well, McClatchy has been cooking the books on their circulation numbers for years. Papers like the Bee have two numbers that they use in order to sell advertising; namely, weekly circulation and the Sunday paper. Did you know that as a loss leader, the Sunday paper is given out to subscribers of other newspapers not owner by McClatchy? For the better part of a decade, here in Elk Grove, subscribers to the Laguna and Elk Grove Citizen are given the Sunday Bee for free? Its not just the paper that’s free but McClatchy pays for deliver to these homes too. As mentioned in the delivery article, AB-5 affects newspaper carriers too.
We also have an additional challenge in California. With the recent passage of AB 5, delivery costs for the printed newspaper will increase dramatically by 2021.
Fear not, leader of the slugs who operate and work for this corporation, Gary Wortel, had this to say after Sheriff Scott Jones lit into McClatchy, “What Sheriff Jones and the Deputy Sheriff’s Association say about our watchdog journalism is wrong. The Bee has been a leading independent local news organization and credible news source since 1857 and will continue to serve this community for decades to come.” Ah yes, Gary, “independent” is not a word I would use to describe your paper. The only chance you have of being around for a decade is if bankruptcy buys you more time.
Concerning the 20,000 people currently drawing a pension from McClatchy, Eliane Lintecum, the CFO and another leader of the slug brigade is banking on a Federal bailout of the pension plan. She had this to say about the company’s pension plans “we don’t believe their … pension benefits will be adversely affected” … if they get the bailout. Folks, would such a hope make you feel more secure in your retirement? What slugs!!!
Lastly chew on this trash which is conveniently listed atop each article of the Bee online:
Local news is more important than ever. Reporters are out in our communities each day, bringing you the latest news and holding leaders accountable. Subscribe — and encourage others to support local journalists with a digital subscription to The Sacramento Bee by using this link.
Thank you. And #ReadLocal
Hey McClatchy, you have hardly any reporters, you write very little about the local community, you hold no one accountable, and what the hell is the hash tag read local about? I guess it makes sense when you see a photo of McClatchy CEO Craig Forman, who may need a thicker pair of glasses to see through the mess he created.
The company is toast. The readers have either assumed room temperature, can no longer eat solid foods, live in assisted living, or don’t know which pro-noun to refer to themselves as. You were too late to digital, advertising is dropping, and the end is in sight. The best hope you have is that many still major in state sponsored journalism at the local university and don’t know any better. The last part being key, you control a group of slugs, they keep doing as told unaware they are trudging through a field of salt, watching their friends lose jobs and hoping for a turnaround…. No chance!
Hence the reason we here at Really Right refer to these journalists as “those with an IQ of a piece of meat” …as you leave them out too long, they spoil.
Chief
What is really fun is that most of the McClatchy papers have a business section. This is where they tell people about business and how to run one. Hehe.
Actually their stock has done far worse. On 4/18/2005 the stock was listed at $739.90. Today it closed at $0.35. All the while the overall market is way up from 2005.
At least they have worked hard to get enough diversity in their management ranks so they have that going for them. Something for the employees who are going to get screwed out of their retirement to feel all good about.