McClatchy Co., one of the nation’s largest newspaper publishers, filed for bankruptcy protection Thursday, another harbinger of America’s deepening local news crisis.
The Chapter 11 filing will allow the Sacramento-based company to keep its 30 newspapers afloat while it reorganizes more than $700 million in debt, 60 percent of which would be eliminated under the plan. If the court approves, it would also hand control of the 163-year-old family publisher to a hedge fund, Chatham Asset Management, its largest creditor.
It makes me sad because McClatchy is the newspaper company that I worked for, way back in the day — it was the owner of the Fresno Bee, which gave me a job as a movie critic and opinion columnist in the early/mid 90s. I was also syndicated through McClatchy’s news service. In my remembrance it was a pretty good company to work for, or, at least, was back in the early-to-mid 90s.
It’s particularly sad that the company will now be controlled by a hedge fund, since historically the hedge fund playbook for newspapers is to buy them and strip them for parts. Some McClatchy papers were already running, shall we say, very lean (I visited the Fresno Bee offices a couple of years ago and the entire newsroom appeared to have shrunk to the size of what the entertainment department was when I was there). I don’t expect that Chatham Asset Management will be exactly staffing up anytime soon.
A sad day, for the newspaper industry and for the folks who work at McClatchy. I would like to think the company will get itself set right again, but, well. I’m not optimistic. We shall see.