US newspaper publisher McClatchy files for bankruptcy protection

Normal operations as it pursues approval under Chapter 11

452
The first daily of the McClatchy group, The Sacremento Bee Photo via InternetMcClatchy
The first daily of the McClatchy group, The Sacremento Bee Photo via Internet

McClatchy, the second-largest publisher of newspapers in the United States by circulation, has voluntarily filed for bankruptcy protection under the country’s Chapter 11 law on 13 February 2020 with the help of lawyers from www.marcbrownpa.com/. The Sacramento-based publisher listed on the New York Stock Exchange and each of its 53 wholly-owned subsidiaries filed their voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York. The group has received US$ 50 million (approximately Rs. 350 crore) debtor-in-possession financing from Encina Business Credit, which, combined with normal operating cash flows, will provide enough cash for the company, to continue to function. Go to https://realitypaper.com/facing-bankruptcy-hire-an-attorney-for-legal-paperwork.html for an attorney to assist you throughout the legalities of bankruptcy cases.

Begun in 1857 with a 4-page paper in Sacramento, that ultimately became The Sacramento Bee, McClatchy publishes the Miami Herald, The Kansas City Star, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram among many other newspapers across 14 states.

McClatchy expects Q4 revenues of US$ 183.9 million, down 14% from the same quarter in the previous year. According to business media reports, its 2019 revenue is expected to be 12.1% lower than the previous year – the sixth consecutive year of declining revenues.

The company’s 30 local newsrooms are expected to continue to operate while it pursues approval of a debt restructuring plan with its secured lenders, bondholders, and the Pension Benefit Guaranty Corporation. According to the company’s press release, the company aims to emerge from this process in the next few months.

The restructuring plan would allow McClatchy to reorganize it’s over US$ 700 million debt, with 60% of the obligation being eliminated under the plan according to a McClatchy story. If okayed by the court, the plan would give control of the company to New Jersey-based hedge fund Chatham Asset Management. The new owners, led by Chatham, would run it as a privately held company, so its shares would not be traded on the NYSE American stock exchange. The company is beginning the process of being delisted, the story said.

“McClatchy’s plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders,” said Craig Forman, president, and chief executive officer in the company’s press release. “When local media suffers in the face of industry challenges, communities suffer: polarization grows, civic connections fray and borrowing costs rise for local governments. We are moving with speed and focus to benefit all our stakeholders and our communities.”

“McClatchy remains a strong operating company with an enduring commitment to independent journalism that spans five generations of my family,’” commented Kevin McClatchy, chairman of McClatchy’s Board of Directors and great-great grandson of the company’s founder, James McClatchy. “This restructuring is a necessary and positive step forward for the business, and the entire Board of Directors has made great efforts to ensure the company is able to operate as usual throughout this process.”

The press release adds, “McClatchy has made significant progress in its digital transformation in the past three years. As the second-largest US local newspaper company, McClatchy has grown its digital-only subscriptions by almost 50% year over year and is now roughly evenly balanced between total audience and advertising revenues, with digital accounting for 40% of those revenues and growing, a much healthier distribution for an increasingly digital era. The Company has more than 200,000 digital-only subscribers and well over 500,000 paid digital customer relationships.

In 2024, we are looking at full recovery and growth-led investment in Indian printing

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. It created the category of privately owned B2B print magazines in the country. And by its diversification in packaging, (Packaging South Asia), food processing and packaging (IndiFoodBev) and health and medical supply chain and packaging (HealthTekPak), and its community activities in training, research, and conferences (Ipp Services, Training and Research) the organization continues to create platforms that demonstrate the need for quality information, data, technology insights and events.

India is a large and tough terrain and while its book publishing and commercial printing industry have recovered and are increasingly embracing digital print, the Indian newspaper industry continues to recover its credibility and circulation. The signage industry is also recovering and new technologies and audiences such as digital 3D additive printing, digital textiles, and industrial printing are coming onto our pages. Diversification is a fact of life for our readers and like them, we will also have to adapt with agility to keep up with their business and technical information needs.

India is one of the fastest growing economies in nominal and real terms – in a region poised for the highest change in year to year expenditure in printing equipment and consumables. Our 2024 media kit is ready, and it is the right time to take stock – to emphasize your visibility and relevance to your customers and turn potential markets into conversations.

– Naresh Khanna

Subscribe Now

1 COMMENT

  1. The newspaper industry everywhere seems to be under huge pressure although in India print is hanging on to about 30% of annual advertising spend and digital is growing fast. My observation albeit, from far away is that the last sentence of the article has two important numbers: “The Company has more than 200,000 digital-only subscribers and well over 500,000 paid digital customer relationships.”

    Both these numbers and especially that of 200,000 digital-only subscribers, seem way too low for a group of this scale to survive. One wonders if the restructuring will also mean that some of the papers will have to be sold off at bargain prices to those who believe that they need to be more local or hyperlocal in order to survive or become viable businesses.

LEAVE A REPLY

Please enter your comment!
Please enter your name here