In yet another sign that the print news industry is headed toward extinction, the McClatchy Company -- the second-largest local newspaper business in the nation -- has filed for Chapter 11 bankruptcy protection.
As part of its announcement on Thursday, the 163-year-old company and owner of such newspapers as the Miami Herald, the Kansas City Star, the Sacramento Bee and 24 other publications in 14 states, stated that its bankruptcy plan would erase 60 percent of its debt while moving the company toward “a digital future.”
The company's biggest acquisition -- and the source of its financial struggles -- was another major newspaper chain, Knight-Ridder newspapers, in 2006, shortly before the financial crisis of 2008. That's the newspaper chain Rob Reiner celebrated in his anti-Bush movie Shock and Awe for its crusading journalism against the rationale for war in Iraq.
Joe Concha of The Hill newspaper stated:
If a bankruptcy court accepts the Chapter 11 plan, the company would likely be led by hedge fund Chatham Asset Management LLC. McClatchy, a publicly traded company, would become a private company as a result....
The local newspaper industry has been plagued by layoffs in the digital era, with several struggling publications sold to hedge fund-led entities in recent years.
The announcement did not come as a surprise, the reporter indicated, since McClatchy “had begun suspending some pension payments to former executives in January, opting to apply to the Pension Benefit Guaranty Corporation to assume control of its pension plan.”
Craig Forman, president and CEO of the business, declared online: “When local media suffers in the face of industry challenges, communities suffer, polarization grows, civic connections fray and borrowing costs rise for local governments.”
Newspaper industry leaders have been sounding the alarm as the traditional sources of newspaper revenue -- especially classified advertising -- dried up, and people began getting most of their news online, especially from social media.
New York Times Executive Editor Dean Baquet made the ominous prediction that "I think most local newspapers in America are going to die in the next five years, except for the ones that have been bought by a local billionaire."
"I think that everybody who cares about news — myself included, and all of you — should take this on as an issue," he added. "Because we’re going to wake up one day and there are going to be entire states with no journalism or with little tiny pockets of journalism."
Journalists tend to see their own product as the most important product people need -- or at least the most important product that democracy needs. The bottom line suggests that most people don't agree.