Pension agency questions actions of McClatchy’s largest lender prior to bankruptcy filing

McClatchy files for bankruptcy protection

McClatchy applied to the Pension Benefit Guaranty Corporation to take over its pension plan, which continued to make payments to most of its pensioners.

The company has more than $700 million in debt, The Washington Post reports.

Yet whatever the reasons for the failure of a company that publishes numerous biggest titles in American journalism, including the Miami Herald, Fort Worth Star Telegram, Charlotte Observer and its hometown Sacramento Bee, there is no doubting the cost: truth and knowledge in an era of rampant fake news and misinformation.

The bankruptcy proceeding would also allow McClatchy to address some $800 million in unfunded pension obligations.

If creditors and the bankruptcy court accepts McClatchy's reorganization plan, Chatham Asset Management, a New Jersey hedge fund with $4.5 billion in assets that already owns a stake in McClatchy, would operate McClatchy as a private company. It is the largest newspaper chain in the U.S. Another large chain, MediaNews, is owned by a hedge fund with a reputation for cutting costs and jobs, Alden Global.

While some national newspapers, like The Wall Street Journal and The New York Times, are adding digital subscribers, helping them navigate advertising declines, many local outlets have had a hard time.

As you may have read in today's story, McClatchy, parent company of the Miami Herald and el Nuevo Herald, has announced a voluntary restructuring under Chapter 11 of the U.S. Bankruptcy Code.

McClatchy said it intends to stay in business and emerge from bankruptcy in the near future.

It remains to be seen, of course, what Chatham's stewardship of McClatchy will look like. We are privileged to serve the 30 communities across the country that together make McClatchy and are ever grateful to all of our stakeholders - subscribers, readers, advertisers, vendors, investors, and employees - who have enabled our legacy to date.

Last year, New York Times executive editor Dean Baquet bleakly predicted the demise of "most local newspapers in America" within five years, except for ones bought by billionaires. Its 2019 revenue is anticipated to slide 12.1% from the previous year.

In an ominous sign for the print newspaper industry, Warren Buffet's Berkshire Hathaway recently unloaded its 31 newspapers to Lee Enterprises for $130 million.

"Operating with new ownership gives McClatchy a fresh start to reinvest in different areas of its enterprise", said John Hyland, Centro's vp of publisher solutions.

The company began with a small newspaper based in Sacramento, California, amid the Gold Rush.

The 163-year-old company was founded in Sacramento, California, and current chairman Kevin McClatchy is the great-grandson of founder James McClatchy.



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