{"id":45991,"date":"2020-02-13T10:48:37","date_gmt":"2020-02-13T15:48:37","guid":{"rendered":"https:\/\/thelehighacresgazette.com\/news\/?p=45991"},"modified":"2020-02-13T10:48:37","modified_gmt":"2020-02-13T15:48:37","slug":"another-sign-of-the-growing-financial-crisis-in-print-journalism","status":"publish","type":"post","link":"https:\/\/thelehighacresgazette.com\/news\/2020\/02\/another-sign-of-the-growing-financial-crisis-in-print-journalism\/","title":{"rendered":"Another sign of the growing financial crisis in print journalism"},"content":{"rendered":"\n

In another sign of the growing financial crisis in print\njournalism, McClatchy (MNI<\/a>),\nthe owner or 30 US newspapers, has filed for bankruptcy protection.<\/p>\n\n\n\n

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The company, whose newspapers include the Miami Herald, The\nKansas City Star, The Sacramento Bee, The Charlotte Observer, The News &\nObserver in Raleigh, North Carolina, and the Fort Worth Star-Telegram in Texas,\nsays it plans to stay in business and emerge from bankruptcy in the next few\nmonths.<\/p>\n\n\n\n

McClatchy is the nation’s second largest publisher of local\nnewspapers behind only Gannett, the publisher of USA Today and hundreds of\nlocal newspapers. Gannett has had its own problems and was recently acquired<\/a> by New Media Investment Group.<\/p>\n\n\n\n

McClatchy and some of the newspaper companies it has\nacquired over the years, including Knight-Ridder, have a long had a higher\nreputation than Gannett for quality news reporting. It recently won two\nPulitzer Prizes and many other awards, most recently for the Miami\nHerald’s coverage of the Jeffrey Epstein scandal<\/a>.<\/p>\n\n\n\n

Despite that reputation for quality, it has been cutting\nstaff in response to falling revenue and mounting losses. Company filings show\nMcClatchy had 3,500 full-time and part-time employees as of December 31, 2018,\nthe most recent figure available. Five years earlier it reported just over\ntwice as many employees. The company’s press release said it has reduced its\noperating expenses by $186.9 million, or 23.3%, in the last three years alone,\nbut it wasn’t enough.<\/p>\n\n\n\n

The company reported a net loss of $364 million in the first\nnine months of 2019, up from a loss of $52 million in the year-earlier period.\nRevenue in the first three quarters of 2019 fell by 11%, or nearly $68 million,\nwith a decline in revenue from both advertisers and readers.<\/p>\n\n\n\n

Much of the larger loss was due to a write-down in the\nassets of the company, as well as restructuring expenses and severance charges.\nBut even without those charges and other special items, the company would have\nreported a net loss of $34.2 million in the first nine months of the year.<\/p>\n\n\n\n

The job cuts at McClatchy have become the norm for the\ntroubled newspaper industry, which has seen increased competition from online\noutlets for both readers and advertising dollars.<\/p>\n\n\n\n

Labor Department data show that jobs at newspapers have\nfallen every year since 1998, a net loss of nearly 300,000 jobs during that\nperiod. That represents a nearly 70% drop in employment.<\/p>\n\n\n\n

The company said it will use bankruptcy process to reduce\n“legacy debt and pension obligations.” It said it will be working\nwith the federal Pension Benefit Guaranty Corporation, the agency that\nguarantees pension payments to beneficiaries of bankrupt companies, the same\nway the Federal Deposit Insurance Corp. insures bank deposits to banking\ncustomers. The company said it believes there will be no cut in retirement\nbenefits to its plan participants as the PBGC takes control of the plans.<\/p>\n\n\n\n

“While this is obviously a sad milestone after 163\nyears of family control, McClatchy remains a strong operating company and\ncommitted to essential local news and information,” said company chairman\nKevin McClatchy, the great-great grandson of the company’s founder, in a statement\nin a story by the company’s Washington bureau<\/a>. “While we\ntried hard to avoid this step, there’s no question that the scale of our\n75-year-old pension plan — with 10 pensioners for every single active employee\n— is a reflection of another economic era.”<\/p>\n\n\n\n

The company’s press release said the bankruptcy should be\nable to help transform more quickly to a digital news company. It said it\nremains committed to quality local news.<\/p>\n\n\n\n

“When local media suffers in the face of industry\nchallenges, communities suffer: polarization grows, civic connections\nfray,” said CEO Craig Forman. “In this important moment for\nindependent local journalism in the public interest, a reorganized capital\nstructure will enable McClatchy to continue to pursue our strategy of digital\ntransformation and continue to produce strong local journalism essential to the\ncommunities we serve.”<\/p>\n\n\n\n

Shares of McClatchy (MNI<\/a>) were\nnot trading early Thursday following the news. Shareholders are likely to have\nthe value of their holdings wiped out. Share price had already declined 88% in\nthe last 12 months through Wednesday’s close at 75 cents.<\/p>\n","protected":false},"excerpt":{"rendered":"

In another sign of the growing financial crisis in print journalism, McClatchy (MNI), the owner or 30 US newspapers, has filed for bankruptcy protection. The company, whose newspapers include the Miami Herald,… <\/p>\n","protected":false},"author":8,"featured_media":46005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[128],"tags":[],"_links":{"self":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts\/45991"}],"collection":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/comments?post=45991"}],"version-history":[{"count":0,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts\/45991\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/media\/46005"}],"wp:attachment":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/media?parent=45991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/categories?post=45991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/tags?post=45991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}