McClatchy
The McClatchy Company, commonly referred to as simply McClatchy, is an American publishing company incorporated under Delaware's General Corporation Law. Formerly based in Sacramento, California, U.S., the publication is now a subsidiary of Chatham Asset Management, headquartered in Chatham Borough, New Jersey. 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.
For other uses, see McClatchy (disambiguation).Company type
February 3, 1857
26 Main Street
Chatham Borough, NJ 07928
U.S.
- Kevin McClatchy
(Chairman) - Tony Hunter
(President and CEO)
2,800 full and part-time (2019)[1]
In February 2020, McClatchy filed for Chapter 11 bankruptcy protection. In August 2020, a bankruptcy court approved a bid by hedge fund Chatham Asset Management to acquire McClatchy.
History[edit]
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 also 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 its 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]
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 current 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 will stay on at the newly established Charlotte Publishing Company.[17]
Criticism[edit]
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]
