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McClatchy

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The McClatchy Company
Company typePrivate
IndustryPublishing
FoundedFebruary 3, 1857; 167 years ago (1857-02-03)
FounderJames McClatchy
Headquarters26 Main Street
Chatham Borough, NJ 07928
U.S.
Key people
ProductsNewspapers
OwnerChatham Asset Management
Number of employees
2,800 full and part-time (2019)[1]
Websitemcclatchy.com

The McClatchy Company, or simply McClatchy, is an American publishing company incorporated under Delaware's General Corporation Law. Originally based in Sacramento, California, U.S., the publication became a subsidiary of Chatham Asset Management, headquartered in Chatham Borough, New Jersey as a result of its 2020 bankruptcy. The publication operates 29 daily newspapers in fourteen states and has an average weekday circulation of 1.6 million and Sunday circulation of 2.4 million.[2] In 2006, it purchased Knight Ridder, which at the time was the second-largest newspaper company in the United States (Gannett was, and remains, the largest). In addition to its daily newspapers, McClatchy also operates several websites and community papers, as well as a news agency, McClatchy DC Bureau, focused on political news from Washington, D.C.

History

The company originated with The Daily Bee, first published in Sacramento, California, on February 3, 1857, by Native American writer Rollin Ridge. James McClatchy joined Ridge as a partner and took over as editor. Known as a supporter of the people's interests against corporations and corrupt politicians, McClatchy made The Bee a bastion of progressive reformism. Upon McClatchy's death in 1883, the paper's leadership passed to James' son, Charles Kenny McClatchy, who with his brother Valentine Stuart McClatchy, bought out the Ridge family's interests. The two modernized the paper with the formation of McClatchy Newspapers through the founding of the Fresno Bee in 1922 and acquisition of the Modesto Bee in 1924. C.K. McClatchy's legacy to the region has been memorialized in C.K. McClatchy High School in Sacramento, which opened in 1937, about a year after his death.

For most of its history, the company was focused on the newspaper business in California's Sacramento Valley and San Joaquin Valley. In 1978, the 4th generation Charles K. McClatchy took over the company and guided the media company toward the modern publicly owned The McClatchy Company through further acquisitions of out-of-state newspapers, the Anchorage Daily News in Anchorage, Alaska, and the Tri-City Herald in Kennewick, Washington.

McClatchy also acquired then-ABC affiliate KOVR, licensed to Stockton, California but also serving the Sacramento area, from Metromedia in 1965. The company's own Modesto Bee reported the sale of the station.[3] It was sold to The Outlet Company in 1978 and today exists as a CBS owned-and-operated station.

In 1990, McClatchy acquired three dailies in South Carolina: The Herald in Rock Hill, The Island Packet in Hilton Head, and The Beaufort Gazette of Beaufort. In 1995, it acquired The News & Observer of Raleigh, North Carolina.

In 1998, McClatchy purchased the Cowles Media Company,[4] keeping the Minneapolis Star Tribune newspaper, which was the primary asset in the $1.4 billion deal, and selling Cowles' other business units to Primedia Inc. and to a management team.[5]

In January 2004, McClatchy bought the Merced Sun-Star of Merced, and five affiliated non-dailies in California's San Joaquin Valley.

The company's biggest acquisition occurred on June 27, 2006, when McClatchy purchased Knight Ridder. Because McClatchy was so much smaller than Knight Ridder at the time, one observer equated the deal as "a dolphin swallowing a small whale."[6] The purchase price of $40 and 0.5118 shares of McClatchy Class A stock per share was valued in total at about $4 billion in cash and stock. The company also assumed $2 billion in debt. This purchase added 20 newspapers to the company stable and the immediate sale (over the next five weeks) of 12 publications including the St. Paul Pioneer Press, San Jose Mercury News and The Philadelphia Inquirer. Those sales were completed on August 2, 2006. This acquisition would be cited as the major cause of McClatchy's later troubles - McClatchy overpaid for Knight Ridder by buying at the "top of the market", and the immense debt taken on to fuel the purchase would be a millstone around the neck of the combined company. Additionally, McClatchy did not keep on any of Knight Ridder's digital division or corporate staff, despite the growing prominence of the Internet and Knight Ridder having a well-respected effort in the space at the time.[7]

The Minneapolis-St. Paul Star Tribune, acquired in 1998 and sold in 2007 to the private-equity firm Avista Capital Partners for $555 million, had the highest circulation of all McClatchy newspapers.

The company owns a portfolio of digital assets, including 15.0% of CareerBuilder, LLC, which operates CareerBuilder.com; 25.6% of Classified Ventures, LLC, a company that offers classified websites, such as the auto website Cars.com; and 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com. McClatchy also owns 49.5% of the voting stock and 70.6% of the nonvoting stock of The Seattle Times Company.[2]

In January 2017, former Yahoo! and EarthLink executive Craig Forman was appointed as the new president and chief executive officer (CEO). Forman, a private investor and McClatchy board member, succeeded Patrick Talamantes, who was CEO the previous four years.[8]

The descendants of C.K. McClatchy still own a controlling interest in the McClatchy Company and are represented by the 6th generation Kevin McClatchy as chairman of the Board of Directors.[9]

In February 2019, Forman emailed all staff to say about 10 percent of the newspaper chain's employees would be offered voluntary buyouts.[10][needs update]

On February 13, 2020, The McClatchy Company and 54 affiliated companies filed for Chapter 11 bankruptcy protection in the United States District Court for the Southern District of New York. The company cited pension obligations and excessive debt as the primary reasons for the filing.[11][12][13] In August 2020, the Court approved an offer by Chatham Asset Management—a hedge fund that also owns a 66% share in Canadian publisher Postmedia—to acquire McClatchy for $312 million. The company stated that it would not impose any layoffs, and would honor all existing union agreements.[14][15]

On July 11, 2023, McClatchy laid off the editorial cartoonists of three of its newspapers, Kevin Siers at The Charlotte Observer, Jack Ohman at The Sacramento Bee, and Joel Pett at the Lexington Herald-Leader.[16]

In November 2023, McClatchy sold its Charlotte printing plant to North State Media for $4.65 million. The sale was publicly announced in August. The plant was developed by The Wall Street Journal in 1982 and sold to the Charlotte Observer’s parent company in 2013. Following the sale, the plant's 30-member staff stayed on at the newly established Charlotte Publishing Company.[17]

Company infrastructure

As of 2015, McClatchy had approximately 5,600 full and part-time employees.[2] The company has two classes of stock, allowing the founding McClatchy family to retain control. In the Knight Ridder purchase, for example, McClatchy shareholders did not need to act in approving the purchase because the family had already voted their shares in favor.

Editor & Publisher reported in October 2006 that McClatchy's revenue ending August 2006 was down over one percent from August 2005. Between the announced purchase of Knight Ridder in March 2006 and late 2009, the stock value of McClatchy (MNI) declined significantly.[18] On December 18, 2008, McClatchy common stock fell below $1 per share. The market capitalization of the company fell below $100 million, down over 98% since the purchase of Knight Ridder in early 2006.[19] In 2010–2011, the stock had recovered off of its low, but was still down over 90% from the peak.

In 2016, McClatchy approved a 1 for 10 reverse stock split that boosted the price of its shares to over $11.[20]

McClatchy has an Internet subsidiary, McClatchy Interactive (formerly known as Nando Media), which provides business support and material for Internet media (part of the News & Observer purchase)..[citation needed]

McClatchy was part of a consortium of five U.S. newspaper companies that, along with a Canadian forrest products company, jointly owned the Ponderay Newsprint Mill near Spokane, Washington.[21] The plant opened in 1989 and closed in 2020.[22] A year later it sold for $18.1 million to a California-based venture capital company.[23]

McClatchy also inherited a partnership with the Tribune Company in the news service Knight Ridder-Tribune Information Services, now McClatchy-Tribune Information Services (MCT), when it acquired Knight Ridder.[24] In 2014, Tribune bought out McClatchy's share of the company and its headquarters moved to Chicago.[25]

McClatchy DC Bureau

McClatchyDC is a news agency that distributes original reporting from McClatchy's Washington, D.C. bureau, which was acquired from Knight Ridder.[26] It is the largest client of the McClatchy-Tribune Information Services.[25]

In 2008, McClatchy's bureau chief in D.C., John Walcott, was the first recipient of the I. F. Stone Medal for Journalistic Independence, awarded by the Nieman Foundation for Journalism.[27][28] In accepting the award, Walcott commented on McClatchy's reporting during the period preceding the Iraq War: "Why, in a nutshell, was our reporting different from so much other reporting? One important reason was that we sought out the dissidents, and we listened to them, instead of serving as stenographers to high-ranking [Bush administration] officials and Iraqi exiles."[28]

McClatchy journalists have also won nine Pulitzer prizes in their 159-year history,[29] most recently in 2017 for an article on the Panama Papers. They were also finalists in 2015 for articles on government efforts to hide Bush-era CIA Enhanced interrogation techniques.[30]

Criticism

On August 4, 2013, McClatchy Newspapers, citing anonymous sources, reported on conversations between Ayman al-Zawahiri, who succeeded Osama bin Laden as the head of Al Qaeda, and Nasser al-Wuhayshi, the head of the Yemen-based Al Qaeda in the Arabian Peninsula, discussing an alleged imminent terrorist attack. Two days previously, The New York Times had agreed to withhold the identities of the Al Qaeda leaders after US intelligence officials claimed the information could jeopardize their operations. Government analysts and officials interviewed by the Times said this disclosure caused more immediate damage to American counter-terrorism efforts than the thousands of classified documents disclosed by Edward Snowden; after the McClatchy publication, there was a sharp drop in the terrorists' use of a major communications channel that the authorities were monitoring.[31] Subsequently, officials have been searching for new ways to monitor communications among Al Qaeda's leaders and operatives.[31]

Dailies

Note: (*)—Indicates newspaper acquired in 2006 Knight Ridder purchase.

Dailies acquired in Knight Ridder purchase, then sold

See also

References

  1. ^ "McClatchy number of employees 2019".
  2. ^ a b c "SEC FILING – McClatchy Form 10-K". services.corporate-ir.net. Archived from the original on February 26, 2020. Retrieved April 6, 2017.
  3. ^ "The Modesto Bee- October 4th, 1963". Google News Archivials. McClatchy/ Google. Retrieved June 3, 2012.
  4. ^ "Media profiles". Ketupa.net. Archived from the original on August 30, 2007. Retrieved August 31, 2007.
  5. ^ "McCLATCHY FINDS NEW HOMES FOR COWLES DIVISIONS". NewsInc. January 19, 1998. Retrieved September 11, 2012.
  6. ^ "Newspaper Chain Agrees to a Sale for $4.5 Billion", The New York Times
  7. ^ Newspaper giant McClatchy files for bankruptcy, hobbled by debt and declining print revenue
  8. ^ "Craig Forman New CEO of McClatchy Co". ABC News. Sacramento. The Associated Press. January 26, 2017. Archived from the original on February 2, 2017. Retrieved December 20, 2022.
  9. ^ "About Us". The Sacramento Bee. Retrieved August 23, 2017.
  10. ^ Strouse, Chuck (February 1, 2019). "McClatchy Follows BuzzFeed, Vice, and Others in Cutting Staff". Miami New Times. Retrieved February 17, 2019.
  11. ^ Ronalds-Hannon, Eliza (February 13, 2020). "Newspaper Chain McClatchy Files for Bankruptcy Protection". Bloomberg Law. Retrieved February 13, 2020.
  12. ^ "Publisher McClatchy Co. Files For Bankruptcy, Disrupting 30 Newspapers". NPR.org. NPR. Retrieved May 10, 2020.
  13. ^ Maidenberg, Micah (February 13, 2020). "Newspaper Publisher McClatchy Files for Chapter 11 Bankruptcy". The Wall Street Journal. Retrieved February 13, 2020.
  14. ^ Tracy, Marc (August 4, 2020). "McClatchy, Family-Run News Chain, Goes to Hedge Fund in Bankruptcy Sale". The New York Times. ISSN 0362-4331. Retrieved March 16, 2023.
  15. ^ Flynn, Kerry (August 3, 2020). "Another hedge fund is sweeping up newspapers. This time, journalists are cautiously optimistic". CNN. Retrieved March 16, 2023.
  16. ^ Cavna, Michael (July 12, 2023). "Three Pulitzer-winning cartoonists let go in one shocking day". The Washington Post. Retrieved July 13, 2023.
  17. ^ Mildenberg, David (September 14, 2023). "NC publisher buys press from McClatchy". Business North Carolina. Retrieved September 17, 2023.
  18. ^ "MNI: Basic Chart for MCCLATCHY CO HLD – Yahoo! Finance". Finance.yahoo.com. Retrieved November 11, 2009.
  19. ^ "MNI Interactive Stock Chart - Yahoo! Inc. Stock - Yahoo! Finance". Retrieved May 30, 2015.
  20. ^ McClatchy Company (MNI) Board Approves Reverse Stock Split, Expanded Buyback Authorization 18 May 2016. Retrieved 1 August 2016.
  21. ^ "Ponderay Newsprint might get new operator > Spokane Journal of Business". www.spokanejournal.com. Retrieved September 17, 2023.
  22. ^ Sokol, Chad (June 30, 2020). "Ponderay Newsprint mill closure involves 148 permanent layoffs, state says". www.spokesman.com. Retrieved September 17, 2023.
  23. ^ Clouse, Thomas (April 29, 2021). "California venture capital company outbids Kalispel Tribe for Ponderay Newsprint mill in Usk". www.spokesman.com. Retrieved September 17, 2023.
  24. ^ Seelye, Katharine Q.; Andrew Ross Sorkin (March 12, 2006). "Knight Ridder Newspaper Chain Agrees to Sale" (Fee). The New York Times.
  25. ^ a b Beaujon, Andrew (May 8, 2014). "Tribune buys out McClatchy's stake in MCT newswire". Poynter. Retrieved June 2, 2017.
  26. ^ "Latest National, World & Political News - McClatchy Washington Bureau". www.mcclatchydc.com.
  27. ^ Grinapol, Corinne (April 7, 2016). "Reuters Adds John Walcott as Foreign Affairs and National Security Editor". AdWeek. Retrieved June 2, 2017.
  28. ^ a b Walcott, John (October 9, 2008). "John Walcott: Truth is not subjective". Acceptance speech. McClatchy Newspapers. Archived from the original on October 12, 2008. Retrieved October 13, 2008.
  29. ^ "Pulitzer Prizes". McClatchy.com.
  30. ^ "Finalist: Marisa Taylor, Jonathan Landay and Ali Watkins of McClatchy Newspapers". The Pulitzer Prizes. Retrieved March 24, 2020.
  31. ^ a b Schmitt, Eric; Schmidt, Michael S. (September 29, 2013). "Qaeda Plot Leak Has Undermined U.S. Intelligence". The New York Times.
  • Official website
  • Business data for The McClatchy Company:
  • Davis, Joel (September 10, 2001). "Good as Gold: His Peers Hail McClatchy's Gary Pruitt as the Rising Star Among Newspaper CEOs Vol 134 Iss 35". Editor & Publisher. Duncan McIntosh. Retrieved December 9, 2021.
  • Ipsos / The McClatchy Company Polls
  • McClatchy Washington Bureau
  • Nieman Journalism Lab. "McClatchy". Encyclo: an Encyclopedia of the Future of News. Retrieved April 1, 2012.
  • McClatchy Advertising – WinWithMcClatchy.com
  • McClatchy Ad Manager – Self-Service Advertising


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