McClatchy files for bankruptcy protection
The publisher of the Miami Herald, The Kansas City Star and dozens of other newspapers across the country has filed for bankruptcy protection in the US Bankruptcy Court for the Southern District of New York.
The newspaper industry has been devastated by changing technology that has sent the vast majority of people online in search of news. While McClatchy and others have pushed digital operations aggressively, advertising dollars have continued to flow toward Internet giants like Facebook and Google.
McClatchy Company’s 30 newsrooms, including The Charlotte Observer, The News & Observer in Raleigh, and The Star-Telegram in Fort Worth, will continue to operate as usual as the publisher reorganises under Chapter 11 bankruptcy protection.
The publisher’s origins date to 1857 when it first began publishing a four-page paper in Sacramento, California, following the California Gold Rush. That paper became The Sacramento Bee.
McClatchy has received US$50 million in financing from Encina Business Credit that will enable it to maintain current operations for the company, which is still based in Sacramento.
“When local media suffers in the face of industry challenges, communities suffer: polarisation grows, civic connections fray and borrowing costs rise for local governments,” said CEO Craig Forman. “We are moving with speed and focus to benefit all our stakeholders and our communities.”
McClatchy expects fourth-quarter revenues of US$183.9 million, down 14 per cent from a year earlier. Its 2019 revenue is anticipated to be down 12.1 per cent from the previous year. That would mean that the publisher’s revenue would have slid for six consecutive years.
The company expects to pull its listing from the New York Stock Exchange and go private.