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

My $891.23-per-month McClatchy pension appears to be hanging by something between a thread and three-pound-test fishing line.

I’ve been predicting for months that the company, which owns 29 daily papers, including The Star, has nowhere to go but down and out.

The company finally admitted as much yesterday when it announced its third-quarter financial results.

The single biggest piece of news was not that the company lost $305 million between July 1 and September 30 (that was deceiving because it consisted mostly of a  required markdown of assets) but that its pension plan was underfunded by $535 million.

Of pressing concern, a $120 million pension funding payment is due in the spring.

Under the heading “pension matters and potential restructuring,” McClatchy ominously said in a news release, “The company and its advisors are exploring all available options to address these liquidity pressures.”

The steps the company has recently taken include hiring financial and legal advisers to explore options. The Poynter Institute for Media Studies quickly published a story saying such language typically means one thing: The company is “exploring the possibility of a sale.”

McClatchy has more than 24,000 pensioners, and it has begun discussions with the federal Pension Benefit Guaranty Corporation (PBGC) and its largest debt holder, a hedge fund called Chatham Asset Management, regarding a possible “restructuring.”

“Should the PBGC and the company reach such a solution,” the McClatchy release said, “the assets and obligations of the qualified plan would be assumed by the PBGC, which would continue to pay the company’s pensioners their benefits. The company believes, under current regulations, such a solution would not have an adverse impact on qualified pension benefits for substantially all of its retirees.”

That’s the rosiest outlook. On the other hand…

“There can be no assurance that the ongoing discussions with PBGC, its debt holder, and other parties will result in any restructuring transaction, that the company will obtain any required stakeholder consent to consummate a restructuring transaction, or that the restructuring transaction will occur on a timely basis or at all.”

Or at all.

The likeliest scenario, according to the Poynter story, is that Chatham, McClatchy’s largest stockholder as well as its biggest lender, will move in and take over the company. Chatham already has a controlling interest in a large Canadian chain, and it is the parent company of the National Enquirer. (The fact that McClatchy and The Star are in the grip of the company that employs that greaseball David Pecker is hard to swallow.)

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My hope is that if Chatham becomes the owner of McClatchy, whose stock is publicly traded, it will consider selling off at least some of the 29 papers to local owners. I’ve had my fingers crossed for a couple of years that might happen with The Star, but the fact is it’s unlikely, because most of the hedge funds that have moved in on newspaper chains have done so to suck out the revenue and invest it in other, non-newspaper assets that earn significant returns.

That strategy, as I’ve said before, is euphemistically called “harvesting market position.” (When I hear that term, I can’t help think of a thresher crawling through a field and churning up newspapers.)

A lot of harvesting is taking place in the newspaper business these days. Only a handful of major metropolitan dailies are doing well, and two of them, The New York Times and The Washington Post, have converted themselves into national newspapers. The Times, by far the most successful paper in the country, has been working at that conversion for at least two decades; The Post has made great strides in that direction since Jeff Bezos, founder of Amazon, purchased it in 2013.

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Back to my pension…I worked at The Star for 36 years, and I’ve drawn that $891.23 a month since retiring in June 2006. While it’s a fairly piddling amount considering the number of years I put in, I’ve always been proud and pleased to get that automatic-deposit notification at the end of each month.

You can buy a lot of lunches on $891 a month, and I guess I might have to cut back if the pension goes away or is significantly reduced. One of the groups I lunch with periodically includes former Star reporters Julius Karash and Mike Rice and our politically conservative buddy John Altevogt. (Like Julius says, “It’s always good to know what the other side is thinking.”)

Last night, Altevogt sent the three of us an email in which he said, “Looks like we may have to pick up the tab for Fitz next time around, until he can get a gig as a Walmart greeter.”

The only problem is Walmart is getting rid of its greeters faster than newspaper chains are getting rid of reporters, photographers and editors.

Ah, well, on we go…onward and upward.