• Home
  • About me: Jim Fitzpatrick
  • Contact

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

Feeds:
Posts
Comments
« Bill Barr to the rescue of KC and KCPD
It’s a menage a quatre in the Kylr Yust case, with four law enforcement agencies f****** things up »

New Jersey hedge fund to assume ownership of The Star and 28 other McClatchy papers

July 12, 2020 by jimmycsays

A wise uncle once told me, “Expect the unexpected.”

I’ve witnessed the accuracy of those words more than once, but not today.

With a decision made by the McClatchy Co.’s board of directors, the expected has, indeed, come to pass: The company, with its 29 daily papers (including The Kansas City Star), will soon pass into the custody of the Chatham Asset Management, a hedge fund out of New Jersey.

Chatham, McClatchy’s largest shareholder and biggest creditor, has been sinking its claws more deeply into McClatchy the last several years.

After the U.S. Bankruptcy Court approves the transition, the McClatchy papers will be owned by the same company that owns the National Enquirer. That, in itself, is a fact that should make any self-respecting journalist shriek.

I’ve said before, Chatham is a shadowy company; they don’t even have a website. The company was founded in 2003, and its managing partner is a man named Anthony Melchiorre…I’ve searched the web far and wide and have never found a photo of the guy.

What this tells me is journalists and avid newspaper readers here and in cities like Miami, Fort Worth, Sacramento, Charlotte and Wichita (also with McClatchy papers) should be cringing. The newspaper industry’s angle of descent has just steepened.

News of the pending transfer of ownership came in a press release issued by McClatchy this morning. The bitter, hard-to-swallow lead of the press release said…

“McClatchy announced today that the auction held as a part of its court-supervised sale process has concluded with Chatham Asset Management deemed the successful bid.”

It went on to say…

“The proposed agreement positions McClatchy to exit Chapter 11 protection in the third quarter of 2020, having achieved a resolution and restructuring of the company’s complex legacy debt and pension obligations, while maximizing value for the company’s creditors.”

Let me put that sentence into plain, sterling English: McClatchy’s 2006 purchase of the Knight Ridder chain for $4.5 billion was an abject failure, and the vulture that first sought to capitalize on the mistake will now gorge on the detritus.

So The Star, which was employee owned when I arrived as a general assignment reporter in 1969, will now have its fourth ownership change since 1996.

The blissful era of employee ownership died in 1977, when a newspaper-TV-radio company called Capital Cities Inc. paid $2 for every dollar of employee stock ownership, or a total of $125 million, which seemed like an astounding amount at the time.

The Star prospered under Cap Cities ownership for nearly 20 years, but in 1996 things started going south. That’s when Cap Cities, which had earlier acquired the ABC network, sold to Walt Disney Co., which had no interest in newspapers and put The Star and three other Cap Cities papers up for sale within a year.

Knight Ridder, a longstanding, tradition-rich newspaper company seemingly came to the rescue in 1997. But that didn’t go as expected, and Knight Ridder, under pressure from an unhappy, major shareholder, sold to McClatchy in 2006. (For a variety of reasons, including x-ray vision into the future, I retired on June 30, 2006, exactly three days after McClatchy closed on its $4.5 billion deal.)

So, here we are again. Or, I guess I should say, here again are the current crop of KC Star employees — the 250 or so that remain of a legion that once numbered more than 2,000.

What’s in the future for these employees? Hard to say, but changes at the top and more staff reductions would not surprise me. The hedge fund model is to extract as much cash as possible from businesses they own and reinvest the money elsewhere, at a bigger return on investment.

Ken Doctor, the best industry analyst around, put it this way in a recent New York Times story…

“The truth is, to make a huge profit in the newspaper business, you have to cut, cut, cut, and be willing to see the product get worse year by year. They (the hedge fund operators) will have a number, and they will cut whatever they have to — to meet that number.”

You don’t see anything in that quote about quality journalism because that isn’t part of the equation. It’s just hitting the numbers.

McClatchy, at least, made a pretense of quality journalism, but now that’s gone, and everybody down at 1601 McGee should brace for more unsettling changes.

We’ll see what happens. In the meantime, so long, McClatchy, it wasn’t that nice knowing you.

Share this:

  • Twitter
  • Facebook

Like this:

Like Loading...

Related

Posted in Uncategorized | 9 Comments

9 Responses

  1. on July 12, 2020 at 3:25 pm Rick Nichols

    What has gone on with McClatchy over the past 14 years by way of Spin Central reminds me of what people were saying about the Vietnam War back in the ’60s and ’70s – “Will the last soldier to leave Vietnam please turn out the light at the end of the tunnel?” No, Mom is so saddened by what has happened at 1729 Grand Boulevard in recent years that she doesn’t want to be driven anywhere near that building ever again because the memories of what used to be The Star are so painful for her.


    • on July 12, 2020 at 4:18 pm jimmycsays

      Rick, I didn’t know it was that bad for, Peg…But I know how she feels. When I see the renderings of what the place is supposed to look like after this expected renovation is finished, I can’t help but grit my teeth. And when I go by there and see the scaffolding around the building — and no fountain — I wonder if it will ever end up being a vibrant structure again.

      I don’t wish developer Vince Bryant any ill will, but how that magnificent building has gone from powerhouse to whatever Crossroads sideshow it may become is depressing. It will take a lot of ooohs and aaahs and “you-oughta-see-it-nows” to get me back in there again.


    • on July 13, 2020 at 2:09 pm Michael Grimaldi

      What galls me is that when It came time for David Glass to sell the Royals, several KC gazzilionaires ponied up a reported $1 billion, but when the town’s newspaper is on the ropes and probably could be had for some fraction of the reported $300 million Chatham is paying, there is nothing. Nada. Zilch. What is the problem with the deep pockets in this town?


  2. on July 12, 2020 at 7:17 pm Bill Tammeus

    You and I retired on exactly the same day, Jim.


    • on July 12, 2020 at 9:36 pm jimmycsays

      I didn’t know that, Bill…But I’m sure you’ll agree it was a great day to retire.


  3. on July 13, 2020 at 2:10 pm Jean Buchanan

    Sad, sad, sad.


  4. on July 13, 2020 at 3:50 pm John Altevogt

    I was hoping the bankruptcy judge would have an option for breaking the package apart to maximize the value. Perhaps the hedge fund will attempt something similar.


  5. on July 14, 2020 at 7:27 pm Rick Nichols

    I read the story in The Star about the sale of McClatchy to Chatham Asset and had to laugh when I read the part about how this hedge fund is supposedly committed to preserving newsroom jobs and independent journalism and I had to laugh … with great disgust. Same old corporate lies people have had to listen to for many years now.


  6. on July 14, 2020 at 9:50 pm Edward E Scott

    “Never’s just the echo of forever
    Lonesome as the love that might have been
    Just let me go on loving and believing
    ‘Till it’s over

    Please don’t tell me how the story ends”

    K.K.



Comments are closed.

  • Pages

    • About me: Jim Fitzpatrick
    • Contact
  • Archives

    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    • December 2016
    • November 2016
    • October 2016
    • September 2016
    • August 2016
    • July 2016
    • June 2016
    • May 2016
    • April 2016
    • March 2016
    • February 2016
    • January 2016
    • December 2015
    • November 2015
    • October 2015
    • September 2015
    • August 2015
    • July 2015
    • June 2015
    • May 2015
    • April 2015
    • March 2015
    • February 2015
    • January 2015
    • December 2014
    • November 2014
    • October 2014
    • September 2014
    • August 2014
    • July 2014
    • June 2014
    • May 2014
    • April 2014
    • March 2014
    • February 2014
    • January 2014
    • December 2013
    • November 2013
    • October 2013
    • September 2013
    • August 2013
    • July 2013
    • June 2013
    • May 2013
    • April 2013
    • March 2013
    • February 2013
    • January 2013
    • December 2012
    • November 2012
    • May 2012
    • April 2012
    • March 2012
    • February 2012
    • January 2012
    • December 2011
    • November 2011
    • October 2011
    • September 2011
    • August 2011
    • July 2011
    • June 2011
    • May 2011
    • April 2011
    • March 2011
    • February 2011
    • January 2011
    • December 2010
    • November 2010
    • October 2010
    • September 2010
    • August 2010
    • July 2010
    • June 2010
    • May 2010
    • April 2010
    • March 2010
  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 563 other subscribers

Blog at WordPress.com.

WPThemes.


  • Follow Following
    • JimmyCsays: At the juncture of journalism and daily life in KC
    • Join 563 other followers
    • Already have a WordPress.com account? Log in now.
    • JimmyCsays: At the juncture of journalism and daily life in KC
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Copy shortlink
    • Report this content
    • View post in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...
 

    %d bloggers like this: