JimmyCsays: At the juncture of journalism and daily life in KC

Those of us with ties to The Star and the world of journalism in general tend to wring our hands and grit our teeth when there’s a new round of layoffs at The Star or a new quarterly report from its owner, the McClatchy Co.

For sure, it’s a terrible situation. One scenario that could save The Star from future degredation would be if a local, wealthy individual bought the paper from McClatchy (assuming McClatchy would part with its most profitable property) and gave The Star a fresh start.

The Washington Post was fortunate enough to experience such a change several years ago, when Amazon founder Jeff Bezos, although not local, bought The Washington Post from the Graham family for $250 million. Turns out it was a steal. Bezos invested heavily in the paper, and then along came President Donald Trump, and the fortunes of the Post and The New York Times spiked spectacularly.

That’s not likely to happen here, unfortunately. More probable is McClatchy selling all 29 of its papers to another national chain, one not gasping under the weight of a $710 million debt. I would bet the McClatchy crew in Sacramento would welcome a “white knight” that would come in, disperse the dark cloud hanging over corporate headquarters and send the top executives running to the bank with their golden-parachute checks.

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With that, here’s a look at two chains that, in my opinion, would continue shaving away at The Star financially and substantively.

Gannett

Gannett, the largest newspaper chain in the nation, is the most likely procurer of McClatchy. Don’t be surprised if you see a headline within the next year or two saying something like, “McClatchy agrees to be bought by Gannett for $xxx million.”

(McClatchy paid $4.5 billion — and assumed $2 billion in debt — for KnightRidder’s 30 papers in 2006, but the sale price for all McClatchy holdings would now be less than $1 billion.)

Gannett’s holdings include a national paper, USA Today, and dozens of local ones, including The Courier-Journal in Lousville, KY; The Arizona Republic in Phoenix; the Indianapolis Star; The Cincinnati Enquirer; The Tennessean in Nashville; The Des Moines Register; the Detroit Free Press; and the Milwaukee Journal.

All of Gannett’s papers are a mess. Stripped down and gutted. Like McClatchy, Gannett has ordered many rounds of layoffs and has replaced a significant percentage of its papers’ veteran journalists with low-paid young people. In addition, most are all of its papers have two to four pages of generic content produced at Gannett headquarters in Virginia, outside Washington D.C. The generic content helps bulk up the papers, but it’s pablum.

Another thing: the Gannett papers’ websites are the most irritating in the land. Fighting off the pop-up ads and promos makes you feel like you’re in a nest of hissing snakes. Go, for example, to The Courier-Journal’s website and try dealing with its Rattlers and Copperheads.

Like a snake, Gannett is always lurking in the tall grass, looking for opportunities to ensnare failing newspapers or chains. Its latest major acquisition came in 2016 when it bought out Journal Media Group Inc. and its 15 daily newspapers, including the Milwaukee Sentinel, the Evansville (IN) Courier & Press; the Knoxville News Sentinel; The Commercial Appeal in Memphis; the Naples Daily News; and the Corpus Christi Caller-Times.

Later in 2016, it made a run at the former Tribune Publishing papers (now known as Tronc), including The Chicago Tribune and The Los Angeles Times, but pulled back after recording disappointing earning reports for the second and third quarters of 2016.

Gannett has debt of about $355 million, compared to McClatchy’s more than $700 million, but it is in an acquisitive mode partly because it has a market capitalization (total dollar market value of its outstanding stock shares) more than 15 times that of McClatchy — $1.3 billion vs. $75 million.

…The next to last thing I would want to see is Gannett buy out McClatchy, but keep a lookout for that headline I predicted.

Alden Global Capital

The last thing I’d want to see is McClatchy getting bought by Alden Global Capital, which is…a fuckin’ hedge fund!

The Washington Post’s media columnist, Margaret Sullivan, called Alden “one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism.”

Alden’s hostages — I mean properties — include The Denver Post, the St. Paul Pioneer Press (which was briefly a McClatchy paper); The Mercury News of San Jose; and The Orange County Register.

Alden got into the newspaper business in 2010 when it bought Digital First Media after that company’s parent company, MediaNews Group, declared bankruptcy. MediaNews was founded and fueled by William Dean Singleton, another newspaper strip-miner who, at age 66, has been largely sidelined by multiple sclerosis.

The Columbia Journalism Review said that in May a group of Alden shareholders filed a lawsuit alleging that Alden “had sucked money out of the newspapers it owns in order to make risky investments in Greek sovereign debt and a troubled pharmaceutical chain, among other areas.”

Among other things, Alden is alleged to have diverted $158 million into a southeastern U.S. pharmacy chain called Fred’s.

The journalism review quoted news industry analyst Ken Doctor as saying the suit “provides unusual visibility into the nest of secretive vultures.” (Gannett has its snakes, Alden its vultures.)

The same article quoted a columnist for the Minneapolis Star-Tribune as saying Alden “has for years treated one of the biggest media companies in the country like a big ATM.”

On Tuesday of this week, anger at Alden boiled over in Denver, where current and former Denver Post staff members participated in protests against Alden’s cost-cutting and its alleged attempts to influence editorial policy. The protests occurred at the Denver Post production facility in Denver and Alden Capital’s headquarters in New York City.

This is what news of more layoffs at the Denver Post looked like earlier this year when staff members got the word.

Earlier this year, 30 employees were laid off at the Post. One report said the announcement of the layoffs was greeted with “sobs, gasps, expletives.”

Naturally enough, Alden, with offices far away in New York City, wasn’t offering any explanation. Sullivan, The Washington Post columnist, wrote that when she tried to talk to someone at Alden headquarters, she was told no one was there to speak to the news media. “When I asked to be connected to managing director Heath Freeman’s office,” she said, “the receptionist hung up on me.”

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So, while McClatchy looks bad, keep those two outfits in mind when you think about an ownership change at The Star…Gannett and Alden Globe Capital. Whoa.