SLO Tribune’s parent company McClatchy, files for bankruptcy

February 13, 2020


Newspaper publisher McClatchy, which owns the San Luis Obispo Tribune, announced Thursday it has filed for Chapter 11 bankruptcy, a move due in large part to the company’s overburdened pension system.

McClatchy publishes 30 newspapers in 14 states, including five in California: The Tribune, The Sacramento Bee, The Fresno Bee, The Modesto Bee and Merced Sun-Star. Other McClatchy publications include the Miami Herald, The Kansas City Star, Charlotte Observer and the Fort Worth Star-Telegram.

Having already seen its revenue decline for five consecutive years, McClatchy’s 2019 revenue is expected to decrease 12.1 percent from its 2018 earnings.

Following the third quarter of last year, McClatchy reported a net loss of $304.7 million, prompting a 65 percent drop in its stock price. At the time, McClatchy had approximately $700 million in debt and was unable to pay $120 million in pension obligations.

Company Chairman Kevin McClatchy reports McClatchy has a ratio of 10 retirees collecting pensions for every 1 active worker.

“While we tried hard to avoid this step, there’s no question that the scale of our 75-year-old pension plan — with 10 pensioners for every single active employee — is a reflection of another economic era,” Kevin McClatchy said.

Kevin McClatchy is the great grandson of company founder James McClatchy. The bankruptcy process is expected to end McClatchy family control of the company, which has existed since the company’s founding in 1857.

“While this is obviously a sad milestone after 163 years of family control, McClatchy remains a strong operating company committed to essential local news and information,” Kevin McClatchy said.

The likely new owners of the company would be led by the hedge fund Chatham Asset Management.

For more than a decade, McClatchy’s stock has been in decline. On Thursday, McClatchy stock closed at 75 cents a share.

Five years ago, McClatchy stock was listed at about $25. Fifteen years ago, the company’s stock price was more than $700.

Last September, the New York Stock Exchange placed the company on notice that if it did not reverse its declining stock price, it would be delisted.

Amid the company’s financial troubles, the Tribune has downsized its operations and moved to a smaller office. The Tribune also stopped printing a Saturday newspaper.

McClatchy says  it has obtained $50 million in debtor-in-possession financing, and there will be no changes to compensation of current employees as a result of the bankruptcy filing. The company aims to emerge from bankruptcy in a few months.

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You people are either fooling yourselves or are highly ignorant to believe that McClatchy’s bankruptcy has anything to do with political bias. In 2016, the company which owned the Orange County Register, long a bastion for right-leaning editorial stances, filed bankruptcy. The print newspaper business is failing all over the country. Being left or right has nothing to do with it.

I’m formerly from OC and The Register, that was once the backbone, fiscal conservative voice of that county through around 2000 has since traded ownership 3 to 4 times. It was around that time the staunch conservative OC populace sadly turned Purple to Blue with a (continued) wave of ILLEGAL INVADERS. At each sell off, the new invigorated owner(s) leaned further left than the prior losers to appease the changed political and populace appetite.

A loud Price Is Right loser buzzer is sent your way for being entirely “low informed.”

Go figure!

Well, call me all the names you want—I’m sure your mentor Rush Limbaugh would be proud—but my comments are the truth. Newspaper failures have nothing to do with political bias. In 2010, the Boston Herald, for decades a conservative leaning publication, filed bankruptcy. For every liberal newspaper that has gone under—and the Tribune is still alive—I can show you a conservative paper that is also involved in financial distress.

Often conservative and liberal newspapers are owned by the same corporation. In fact, although most of its papers are rated as left-center, McClatchy has several newspapers in the south which lean right-center. It makes no sense for newspapers in this country to veer too far away from the center.

In SLO County, demographics have changed, or at least political opinion is altered (more than likely because of Trump), and for the first time ever there are more registered Democrats than Republicans in the area. Back in the day, when Bob Lagorsmino was our Congressman, the Tribune and the Santa Maria Times leaned way right. I’m sorry, but those times have changed.