McClatchy Newspapers Likely To Get Hedge Fund Owner

Reuters photo

In keeping with a trend that has placed hundreds of American news outlets in the hands of the finance industry, the McClatchy Company and its 30 newspapers are likely to end up the property of a hedge fund, The NY Times reports.

The publisher of The Miami Herald, The Charlotte Observer and The Kansas City Star filed for Chapter 11 bankruptcy protection in February, after more than a decade of layoffs and plummeting revenue. Bids for McClatchy were due last week, with an auction supervised by U.S. Bankruptcy Court in Manhattan to start on Wednesday.

The company, which is led by the family scion Kevin S. McClatchy and Craig Forman, a former Wall Street Journal reporter and Yahoo executive, is scheduled to inform the court of the winner by July 15.

A likely outcome is that McClatchy, one of the country’s largest newspaper chains and a consistent winner of prestigious journalism awards, will be owned by a New Jersey hedge fund, Chatham Asset Management. Under the deal, McClatchy, a publicly traded company, would go private.

Chatham, which is the principal owner of American Media, the parent company of The National Enquirer, became a large McClatchy shareholder and assumed much of the company’s debt in 2018. In April, McClatchy said Chatham had made a bid to take over the company. Other bidders could emerge at auction time.

“We have continued to engage with a number of parties over the past few weeks and are encouraged to see the interest expressed in McClatchy,” a company spokeswoman said.

Although cutbacks have become all but unavoidable in the ailing newspaper industry, many journalists and civic leaders are rooting for McClatchy to end up with benevolent ownership that will not lead to further cost cuts.