| Associated Press
The editor of the Miami Herald, The Kansas City Star and dozens of other newspapers across the country filed for bankruptcy protection.
The news industry was devastated by technological changes that sent the vast majority of people to the Internet in search of news. While McClatchy and others pushed digital operations aggressively, advertising dollars continued to flow to internet giants like Facebook and Google.
McClatchy Co.’s 30 newsrooms, including The Charlotte Observer, The News & Observer in Raleigh and The Star-Telegram in Fort Worth, will continue to operate normally as the publisher reorganizes under Chapter 11 bankruptcy protection.
The publisher’s origins date back to 1857, when she began publishing a four-page article in Sacramento, California, after the California gold rush. That newspaper became The Sacramento Bee.
McClatchy received $ 50 million in financing from Encina Business Credit that will allow it to maintain the current operations of the company, which is still based in Sacramento.
“When the local media suffers from industry challenges, communities suffer: polarization grows, civic connections erode and borrowing costs rise for local governments,” said CEO Craig Forman. “We are moving forward with speed and focus to benefit all of our shareholders and our communities. “
McClatchy expects revenue of $ 183.9 million in the fourth quarter, down 14% from the previous year. 2019 revenue is expected to be 12.1% lower than the previous year. This would mean that the publisher’s revenue would have declined for six consecutive years.
The company hopes to withdraw its listing from the New York Stock Exchange as a publicly traded company and go public.
McClatchy filed for bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. Your restructuring plan needs the approval of your secured creditors, bondholders and Pension Benefit Guaranty Corp.
McClatchy has suffered as readers give up traditional subscriptions and receive news online and, like other publishers, try to follow them there.
Digital-only subscriptions have increased by almost 50% year on year, McClatchy said. The company has more than 200,000 digital subscribers and more than 500,000 paid relationships with digital customers.
Even so, the migration to digital publications did not make up for the loss of advertisers who previously depended on newspapers.
The estimated total circulation of daily newspapers in the U.S., including print and digital, in 2018 fell 8% compared to the previous year, to 28.6 million on working days. Sunday’s circulation fell 9% to 30.8 million, according to the Pew Research Center for Journalism and Media.
Last year, New York Times executive editor Dean Baquet sadly predicted the end of “most local newspapers in America” within five years, except those bought by billionaires. The Washington Post and the Los Angeles Times, both national publications, are thriving after being bought by billionaires. The Boston Globe, Minneapolis Star-Tribune and Las Vegas Review-Journal are among other major American newspapers that appear to have stabilized after being sold to wealthy locals.
Even the arrival of profitable interests can be fleeting.
Two weeks ago, billionaire Warren Buffett said he was selling all Berkshire Hathaway publications; 31 daily newspapers in 10 states, as well as 49 weekly publications paid for with digital websites. Buffett is a lifelong supporter of newspapers, but for several years he says he expects most of them to continue on their downward trajectory, except for a handful of national newspapers like The New York Times and The Wall Street Journal.
“McClatchy remains a solid operating company with a long-standing commitment to independent journalism spanning five generations of my family,” said President Kevin McClatchy, great-grandson of the company’s founder, James McClatchy.
The company also worked on its finances, reducing operating expenses by $ 186.9 million in the three-year period ending in December. It also paid debts of about $ 153.5 million in the same period.
Forman said that McClatchy does not anticipate any adverse impact on eligible pension benefits for substantially all plan participants and beneficiaries.
Here is a list of McClatchy’s newspapers:
The Beaufort Gazette, Beaufort
The State, Columbia
The Island Packet, Hilton Head Island
The Sun News, Myrtle Beach
The Herald, Rock Hill
The Charlotte Observer, Charlotte
The Herald-Sun, Durham
The News & Observer, Raleigh
The Fresno Bee, Fresno
Merced Sun-Star, Merced
The Modesto Bee, Modesto
The Sacramento Bee, Sacramento
The Tribune, San Luis Obispo
Bradenton Herald, Bradenton
El Nuevo Herald, Miami
Miami Herald, Miami
The Telegraph, Macon
Idaho Statesman, Boise
Belleville News-Democrat, Belleville
The Wichita Eagle, Wichita
Lexington Herald-Leader, Lexington
Sun Herald, Biloxi
The Kansas City Star, Kansas City
Center Daily Times, State College
Fort Worth Star-Telegram, Fort Worth
Bellingham Herald, Bellingham
Tri-City Herald, Kennewick
The Olympian, Olympia
The News Tribune, Tacoma