Page 25 - ARUBA TODAY

BUSINESS Friday 14 February 2020
A25

Newspaper chain McClatchy files for bankruptcy protection

By TALI ARBEL and The newspaper industry phia Inquirer and Philadel- said half its revenue now McClatchy said "substan-
MICHELLE CHAPMAN has been deeply hurt by phia Daily News emerged comes from advertising, tially all" of the plan's par-
AP Business Writers changing technology that from bankruptcy protec- and half from circulation. ticipants and beneficiaries
NEW YORK (AP) — Mc- has sent the vast majority tion in 2010, Chicago Tri- The company said that for should get their entitled
Clatchy, the publisher of of people online in search bune and The Baltimore 2019, ad revenue fell 19%, benefits.
the Miami Herald, The Kan- of news. Media compa- Sun publisher Tribune Co. while circulation revenue McClatchy plans to pull its
sas City Star and dozens of nies have tried to shift on- in 2012 and GateHouse in dropped 5%. McClatchy listing from the New York
other newspapers, has filed line, with varying degrees 2013. has struggled to pay mon- Stock Exchange as a pub-
for bankruptcy protection of success, as their print ad McClatchy's bankruptcy fil- ey owed to its pension fund licly traded company. Cha-
as it struggles to pay off revenue and circulation ing "rings an alarm bell for and has been in negotia- tham Asset will be the new
debt while revenue shrinks declined. Complicating local news," Poynter media tions with the Pension Ben- majority owner. Chatham
because more readers and matters, internet compa- business analyst Rick Ed-
advertisers are going on- nies Facebook and Google monds said. "McClatchy's
line. receive most online ad dol- problems are very typical
McClatchy said Thursday lars. for those of local news-
that its 30 newspapers will While some national news- papers," he said, as the
continue to operate nor- papers, like The Wall Street industry deals with an old
mally as it reorganizes un- Journal and The New York business model that's dete-
der Chapter 11 bankruptcy Times, are adding digital riorating faster than digital
protection, helped by $50 subscribers, helping them and other new revenues
million in financing from En- navigate advertising de- are increasing.
cina Business Credit. clines, many local outlets McClatchy's 2006 purchase
The company hopes to have had a difficult time. of the Knight-Ridder news-
emerge from bankruptcy That has led to a string of paper chain for $4.5 bil-
protection in a few months consolidation, much of it lion added to McClatchy's
as a private company, with involving investment firms, debt and contributed to its
majority ownership by a deepening concerns financial woes as the indus-
hedge fund that's currently about declining quality as try's decline accelerated in
McClatchy's largest share- newsrooms shrink and pa- subsequent years.
holder and debtholder, pers close. Though financial results
Chatham Asset Manage- Gannett, the USA Today aren't yet final, the com-
ment. That would end 163 publisher, was bought last pany estimates that 2019
years of family control. year by GateHouse, a revenue fell 12.1% from
It's also looking to unload chain managed by private the previous year, its sixth
its pension obligations to equity firm Fortress, in a deal consecutive annual de-
a federal corporation that helped by a high-interest, cline. McClatchy said its
guarantees pensions, so $1.8 billion loan from an- digital-only subscriptions This Oct. 14, 2009 file photo, shows copies of the McClatchy Co.
that employees would get other financial firm, Apollo. have grown almost 50% to owned Miami Herald newspaper in Miami. McClatchy Co., the
publisher of the Miami Herald, The Kansas City Star and dozens
the benefits they were en- It is the largest newspaper 200,000 over the past year. of other newspapers across the country is filing for bankruptcy
titled to. chain in the U.S. Another But that growth hasn't protection.
McClatchy did not an- large chain, MediaNews, made up for the loss of ad- Associated Press
nounce any layoffs and is owned by a hedge fund vertising revenue that once
tried to reassure employ- with a reputation for cut- flowed to its print newspa- efit Guaranty Corporation, also is the majority share-
ees, saying that while "we ting costs and jobs, Alden pers. a federal guarantor of pen- holder of Canadian news-
are always looking at op- Global. In court documents, Mc- sions, to assume control. paper chain Postmedia
portunities to improve op- Newspaper companies Clatchy said 40% of its rev- In Thursday's filing with U.S. and owns National Enquirer
erational efficiencies," the have been through a string enue now comes from digi- Bankruptcy Court in New publisher American Media
Chapter 11 process is "not of Chapter 11 reorganiza- tal sources. It said it is trying York, it is seeking permission Inc. American Media is in
geared around cost take- tions in recent years. The to shift away from being to appoint that corpora- the process of selling the
outs." publisher of The Philadel- so reliant on advertising. It tion as the plan's trustee. Enquirer.q