SLO Tribune’s parent company McClatchy, files for bankruptcy

February 13, 2020

By CCT STAFF

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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Boldguy

I wonder if the progressive movement has read the memo yet?

Pension costs sink their progressive Newspaper!

This is the same retirement scenario that will happen to government pensions, supporting 10 employees for every one that’s still working.


womanwhohasbeenthere

That’s exactly right. For the private sector there is the PBGF (Pension Benefit Guarantee Fund) that will pay retirees some but not all of their promised pension. As more companies go bankrupt, the fund gets smaller…


SLO city is over $165,000,000 in debt to the California Public Employees Retirement System (CalPERS) but the city can just continue to raise taxes and fees to fund it. We are effectively paying for two workforces, one retired and one still at city hall. This will go on until someone with a brain for business serves on the city council and gets it under control. But don’t hold your breath. Our priorities according to the incumbents are open space, fighting climate change, banning plastic anything, and building more bike lanes. So much for fiscal accountability.


aye-caramba

The Central Coast will be better off without the Tribune, adios bastion of hyper partisan rhetoric!


obispan

The Tribune describes the vile Adam Hill emails they were shamed into reporting as “a political hit”. I’ll get my news from CCN and the New Times for free thank you very much. I would pay $50/mo for the paper I delivered from my bicycle decades ago. The sooner The Tribune is gone the better. They could have tried, but didn’t. The couple of employees left are Chamber of Commerce clowns beholden to dwindling advertisers and networking for post Tribune jobs.


CC_Marauder

Neither of the remaining sites you mentioned are any great shakes either.


Paso_citizen

I trust the Fibune will give everyone a few days advance notice of last issue to be printed. I need to find another source of something to line the bottom of my birdcages with.


Snoid

Well shoot, what am I gonna use to pick up dog turds with when its gone? Hum, I know !!!, the New times :) Maybe I better save that one to wrap my vegetables in eh? At least it free.


TKG

The Trib has been morally bankrupt for years and has gotten worse for being a front for the progressives. Now it’s financially bankrupt. What a surprise…


George Garrigues

This is really a silly thing to say.


TKG

The Trib has been morally bankrupt for years. Now it’s financially bankrupt. Why am I not surprised?


Niles Q

Wow, stocks fell from $700 a share to 75 cents!?!

Someone is going to get those great newspapers for a song.

And yeah, I’m po’d the comics and puzzles weren’t in today’s paper. I feel ripped off!

Can I get my two bucks back in stocks? (;0)


heybobareebob

I thought they would last 6 months so I bought the 26 week yesterday. Thank u CCN. I just tried to cancel my credit card charge. No crossword or comics today.


George Garrigues

Yes, I called Circulation about that and was informed that we’d get the missing page on Saturday. When I reminded the woman on the phone that we do not have a Saturday edition any more, she corrected herself to say “Friday.”


It is too bad that local newspapers are taking a hit all over the country. The internet cannot make up for reporters going out and interviewing local people to get interesting stories that we’re all interested in.


SLO_Children_at_play

Hey George, are those Kool-Aid stains around your mouth? Or do you consume the DNC’s poisoned punch via I.V. drip?


I had personally forgotten that we still had a daily newspaper, I thought the Tribune was a daily newsletter produced by the socialists for a platform to excuse and downplay the inappropriate actions of Adam Hill and all the other liberal, progressive socialists in this state and county. I realize technology has made newspapers obsolete, but so has printing a daily paper with no soul and no substance.


I imagine that when McClatchy’s successors finally find an economical way to move the Tribune into the digital era, their new “news” website will consist of nothing more than a parrot on a 24/7 live webcam who repeats and defends everything that the SLO progressives, Gavin Newsome, and Nancy Pelosi whisper into its ear.


As for “reporters going out and interviewing local people to get interesting stories that we’re all interested in,” well THERE’S your problem. The few times a year that they actually send someone out into the field to research a story, have only been to support tax increases to afford pensions, report on the latest minuscule piece of plastic that the IWMB wants to ban in name of the environment, and keep us posted on “yesterday’s news,” which gets sent to Fresno to print then trucked back here for distribution.


Unfortunately, it has probably been 50+ years since the Tribune has printed anything that “we’re all” interested in. The DNC has turned into a series of democratic “tribes” and all of their policies cost trillions more in tax dollars and/or requires banning more stuff we use every day. The Democrats themselves have nothing to campaign on that we “all” would find interesting. Hence their current meltdown. So if all you do is print a daily newspaper that parrots everything the left has to say, well DUH, of course, it’s going bankrupt.


sharshofar

George Garrigues Thank goodness for CCN which is the most informative, investigative local news we have had since The Times Press Recorder.


JamesD

George, you will still have reporters going out interviewing people getting interesting stories, you will just be able to read them just like you are reading CCN. The only difference is you wont pay $2.00 to get a 2 page paper with 2 day old news.


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