Kansas City Star parent company McClatchy has filed for bankruptcy.
The company is the second-largest owner of local newspapers in the country. McClatchy operates 29 daily newspapers in fourteen states and has an average weekday circulation of 1.6 million and Sunday circulation of 2.4 million.
McClatchy Co. filed for Chapter 11 bankruptcy on Thursday, which, if accepted by the court, will allow the company to restructure and eliminate some of its debt before handing leadership over to creditors. The new ownership will go to hedge fund Catham Asset LLC, which plans to privatize the company.
The Star was previously owned by Knight Ridder which was purchased by McClatchy in 2006. The company found it difficult to pay for its $199 million printing plant that opened the same year. It had been criticized for receiving TIFs from the City of Kansas City. In 2019 McClatchy completed the sale and leaseback of its modern glass headquarters and printing plant. According to the Kansas City Business Journal, “The company said it sold the glass-faced building for $30.1 million, and agreed to lease it back for 15 years at a rate of $2.8 million annually.”
McClatchy and the Star have been criticized for liberal bias in the past. Many of the newspapers it gobbled up over the past decade have taken a decidedly “progressive” turn against wishes of long time readers. Across the board, subscriptions failed and advertising dried up as conservative readers abandoned the papers and turned to the internet for news.
According to the website mediabiasfactcheck.com, the company’s Washington DC-based news service regularly leans left with biased headlines. The news service is the source for much of the Kansas City Star’s national news. The site’s study published the following description of the company’s reporting:
“In review, McClatchyDC covers Washington DC and national politics through the use of McClatchy reporters. A review of articles shows that many headlines contain moderately loaded langauge that tends to favor the left such as these: California Republicans fear even bigger trouble ahead for their wounded party and Trump administration wants huge limits on food stamps — even though Congress said ‘no’. All stories published use proper hyperlinked sourcing to credible media and/or Government information. McClatchyDC does not have an actual editorial page, however they do have an editorial cartoon page that almost always paints President Trump and the GOP in a negative light.”
The bankruptcy puts the future of print news in even more doubt.
“While this is obviously a sad milestone after 163 years of family control, McClatchy remains a strong operating company and committed to essential local news and information,” Kevin McClatchy, chairman of the company, said. “While we tried hard to avoid this step, there’s no question that the scale of our 75-year-old pension plan — with 10 pensioners for every single active employee — is a reflection of another economic era.”
Some of McClatchy’s newspapers include the Miami Herald, the Charlotte Observer, the Fort Worth Star-Telegram, and the Sacramento Bee. The company has obtained the funding necessary to keep the operation standing as it goes through bankruptcy.
From 2016-2018, McClatchy’s ad revenue fell by 80% while its daily print circulation dropped by more than 50%.
This year the Star, as well as all of McClatchy’s daily papers, stopped being daily after they dropped their Saturday editions.
–Dwight Widaman | Metro Voice