2nd largest publisher of local newspapers files for bankruptcy protection
Updated: Feb 17, 2020
McClatchy Co. filed for bankruptcy protection on Thursday, setting up the end of family control over the company and handing the reigns to creditors. The Chapter 11 filing is intended to result in a restructuring of its debts, particularly reducing pension obligations.
McClatchy publishes dozens of local newspapers across the United States, including the Kansas City Star and the Miami Herald.
The likely new owners would be led by hedge fund Chatham Asset Management LLC, operating McClatchy as a privately held company. The plan would cancel more than 7 million shares of both publicly available and protected, family-owned stock.
"While this is obviously a sad milestone after 163 years of family control, McClatchy remains a strong operating company and committed to essential local news and information," said Kevin McClatchy, who serves as chairman.
Digital-only subscriptions have increased by almost 50% year-over-year, McClatchy said, but the company expects fourth-quarter revenues to decline from about 14% from a year prior and annual revenues to decline by 12.1% from 2018. These revenue projections would result in a sixth consecutive year of revenue loss for McClatchy, which saw its advertising revenue fall by 80 percent from 2006 to 2018.
“As a supportive investor in McClatchy since 2009, Chatham is committed to preserving independent journalism and newsroom jobs. We look forward to working with the company in the best interests of all stakeholders,” Chatham said.