NEW YORK (AP) – Hedge fund Chatham Asset Management is considering buying newspaper publisher McClatchy from bankruptcy, ending 163 years of family control.
The companies did not set a price on the deal in an announcement on Sunday. The deal has yet to be approved by a bankruptcy judge; a hearing is scheduled for July 24.
McClatchy is one of the largest newspaper companies in the United States. It owns 30 newspapers, including the Miami Herald, the Charlotte Observer, and the Sacramento Bee. He filed for bankruptcy over heavy indebtedness resulting from his $ 4.5 billion purchase of the Knight-Ridder newspaper chain in 2006, just as the newspaper industry was booming. slump.
Chatham was McClatchy’s largest shareholder and debt holder. He beat an offer from Alden Global Capital, another hedge fund that has played a leading role in the US newspaper industry.
Chatham’s other media holdings include Canadian newspaper chain Postmedia and National Enquirer publisher American Media Inc. But industry expert Ken Doctor noted that it doesn’t make financial sense to combine them. with McClatchy to cut costs, as newspaper negotiators like to do. . And Alden Global Capital’s emergence as a bidder has given rise to speculation Chatham is trying to combine McClatchy with Alden’s holdings or with another large newspaper company, like Gannett, which owns The Providence Journal.
As national newspapers such as the Wall Street Journal and The New York Times add digital subscribers to help them cope with declining advertising, many local outlets have been going through a rough patch. This has contributed to a string of bankruptcies and consolidations, mostly involving investment firms, which has heightened concerns about declining quality as newsrooms shrink and newspapers close.
The coronavirus pandemic has exacerbated the decline in advertising revenue and prompted holidays, pay cuts, layoffs and more newspaper closings.
Several mayors of towns where McClatchy has a paper have written to bankruptcy court, asking the judge to consider the civic value of the paper.
“We want our newspaper to emerge from this bankruptcy with owners willing to invest in our community and bring us the best of journalism,” Lexington, Ky. Mayor Linda Gorton said of the Lexington Herald-Leader.
McClatchy’s origins date back to 1857, when he began publishing a four-page article in Sacramento, California, following the California Gold Rush. The company remains based in Sacramento.