Kansas City Star employees and readers should be watching closely the next few days or weeks to see what happens with regard to its corporate owner, the McClatchy Co.
Common sense says there’s no way McClatchy, which owns 29 daily papers, could buy the larger (in financial terms) Tribune Publishing Co., which owns the Chicago Tribune and several other papers, and yet I keep seeing reports that McClatchy is in the hunt.
Just yesterday, Keith J. Kelly of the New York Post reported that McClatchy executives were “visiting some of the papers involved in a potential sale.”
Kelly quoted an anonymous source as saying “if it (a deal) doesn’t happen this week, it may not happen at all.”
…I tell you, those of you who still have two good knees (not me) should get down on them and pray that McClatchy doesn’t get control of Tribune.
McClatchy is a certifiable disaster as a journalistic enterprise and has been since it paid $4.5 BILLION for the Knight Ridder chain in 2006. That was at the precise time the newspaper industry was starting down what has turned out to be an amazingly steep slope.
I’d like to call on Congress — before it goes on Christmas break — to quickly pass a bill prohibiting any company with an $800 million debt from buying another company.
Not just that…McClatchy also has cut thousands of jobs at its papers and has reduced its print editions to shells of what they used to be.
And yet, if Keith Kelly is correct, this dolphin of a newspaper chain has its little jaws open and is chasing another whale.
It’s not clear if a wealthy individual or a hedge fund — or some other entity – is backing McClatchy’s bid, but it certainly can’t swing such a deal on its own. To me, it’s far-fetched from every possible vantage point.
More likely, from my way of thinking, is that Tribune ends up in the hands of a team of two men who have teamed up on a competing bid.
Heading that team are Will Wyatt, a former hedge fund manager, and Jeremy Halbreich, chairman of a fast-growing, private company that owns papers in Texas, Ohio, Indiana and West Virginia. Halbreich’s main claim to fame is resuscitating the Chicago Sun-Times several years ago.
Keith Kelly reported a couple of weeks ago that the Wyatt-Halbreich team had the financial backing of Texas billionaire H. Ross Perot. If that’s the case, Wyatt and Halbreich would seem to be holding a very strong hand.
According to Kelly’s New York Post story of Tuesday, Wyatt and Halbreich would be employing a “buy to bust it up” strategy, that is, selling off most of Tribune’s papers but keeping the Chicago Tribune as flagship.
On the other hand, I assume McClatchy would be buying with an eye to hold onto the new properties.
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From The Star’s standpoint, not much good can come out of this particular deal, however it turns out.
If Wyatt and Halbreich emerge the winners, McClatchy regroups and continues trying to cut its way to profitability.
If McClatchy somehow pulls the deal off, it extends its failing print-to-digital strategy to another dozen or so papers.
Either way, it continues stumbling and fumbling along.
The best scenario, in my view, is bankruptcy, with a “bust up” that frees 29 daily papers from the grasp of company that has been tanking for a dozen years.
It’s hard to imagine how any other course could be worse than continued ownership by McClatchy. So I say, death to McClatchy, liberty to its newspapers.
JimmyCsays: At the juncture of journalism and daily life in KC 
This was apparently written before you found out about the new deal with McClatchy sending design and copy editing to North Carolina. Agree, Star would be much better off without McClatchy looting its profits to pay for their blunders.
https://www.bizjournals.com/wichita/news/2018/12/11/wichita-eagle-parent-will-centralize-design-copy.html?ana=e_ae_set1&s=article_du&ed=2018-12-11&u=Q%2FPk1um0t5c8utAnOinXZQ0109db0b&t=1544666738&j=85484661
Yes, I saw that, John. Just another step down the road of retrenchment. I’m glad to hear you agree about McClatchy dragging The Star down.
Good analysis, Jim. In the event of a McClatchy bankruptcy and bust-up, it would be great if someone in the Kansas City area bought the Star. WHO WANTS TO STEP UP TO THE PLATE?
That’s the question, Julius…We need one of our deep-pocketed readers — very deep pocketed — to start toying with the idea.
i don’t think the pockets need to be that deep :) Seriously, what capitalist would want to buy a shrinking, irrelevant, money losing adult daycare?
KC Bullwinkle, I agree that the Star is shrinking. But it is not irrelevant, and there are still great journalists there doing great work. It’s true that no one would buy it with the idea that they were going to make a lot of money by doing so. The intent of such a purchase would be public service. I can’t say that that is likely to happen – maybe it never will. But it’s possible.
There is a group waiting in the wings for a solo sale of The Star (and perhaps The Eagle), but I don’t think you’re going to like the new owners.
If it’s a four-letter name starting with “K” and ending with “H,” you’re right…
But then I’d have plenty of fodder for future posts.
It’s not.
I always wonder why people think a turn a quick turn to the right would “save” The Star. People that I know that are of the conservative persuasion despise The Star and practically all print media. “Fish wrap” is one of their favorite expressions. They have now been conditioned the past 20-30 years to get their point of view fed constantly for pretty much nothing from Fox News, AM talk radio, and internet related sites. I don’t see why a new owner going right would gather many, if any, those people to pay to become readers, and in the process, alienate and lose the readers that have continued to subscribe to The Star. Buying it and running it into the ground does not seem like a sound business plan.
Conservative media also has a lock step problem. Look at what is happening to the National Review. They are not constantly kissing Trump’s behind and it looks like the conservative money behind it is ready to bail out. If the conservative way is coming to the point that everyone needs to be playing the same tune in a lock step manner, not everyone in conservative media is needed, is a danger to all conservative media, and becomes an echo chamber.
I realize many of these become vanity projects in the conservative community. It is one thing to drop $40-50 million a year in losses to be a conservative paper in Washington DC to be a “counter” to the Washington Post. Does it make any sense for someone to do the same in Kansas City? Even if the losses were in the $10-20 million a year range, over time that adds up to big time money.
Also post-election analysis is showing that the vast majority of the Republican base has now become old white evangelicals. Newspapers already have the issue in that too much of their readership base is in this age group. If you want to have a chance to have your enterprise continue 10-20-30 years down the line, you can not afford ignore a younger and larger group (your future audience) that studies show leans more Democratic, are more educated, and most importantly of all, has the income to pay for media and attract advertisers.
I believe you’re referring to The Weekly Standard, Bill. If you’ve ever seen National Review’s office you would see that it is already a very low budget operation. Weekly Standard, a Never Trump operation is owned by a company that is unabashedly pro Trump. They own the newspaper you reference and are creating a magazine associated with that paper that will eliminate the need for the stand-alone operation.
And you’re analysis is pretty spot on. The problem would not only be with The Star’s current subscriber base, but also with its staff. Despite Berg’s promise to make The Star more centrist, Fanin’s new hires in reporting are predominantly left-oriented and the new editorial board, if possible, is more offensive than the previous crew to those on the right. So, in essence, a conservative buyer would get little more than the blue sky (like that’s worth much) associated with The Star’s name and would have to rebuild a new organization virtually from scratch.
Better to start a conservative (or better yet, a ruthlessly obejective) version of the Shawnee Mission Post.
This just in from Bloomberg — “Tribune Publishing rejects McClatchy takeover offer.”
https://www.stltoday.com/business/local/tribune-publishing-rejects-mcclatchy-takeover-offer/article_20997b12-284e-5347-b75d-00dff9db0236.html?fbclid=IwAR0nz0SfetSNMM3qE6wRSooHwq8-Syrp8_04uJ_A_JbuP2iSPjbJ1nl2jUw