Tri-City Herald’s Parent Company McClatchy Declares Bankruptcy
Multiple sources are reporting, and the company itself released a statement Thursday, that the McClatchy Newspaper empire has filed for Chapter 11.
The company owns over 30 newspapers, including the Tri-City Herald. The chain dates back 160 years to the original Sacramento Bee. The move is expected to transfer ownership and control to it's largest shareholder, which is hedge fund Chatham Asset Management, with lesser control going to several other lenders.
According to sources, pension problems were the final tipping point. The $1.4 billion dollar portfolio will be transferred to Pension Benefit Guaranty Corp, an entity of the Federal government.
The pension program was created years ago (1944) and more easily funded when newspapers still were making money and had a lot more cash. But now, with print eroding, the plan weighed down the chain.
14 years ago McClatchey purchased debt-ridden newspaper chain Knight-Ridder for $5 billion dollars, but found their operations falling victim to the same general demise facing traditional print publications (outside of books).
McClatchy's advertising revenue dropped 80% between 2006 and 2018, while their overall circulation (including numbers from the Tri-City Herald) 59%. The explosion of digital news outlets and choices, plus advancements and growth in Radio and TV further pushed newspapers to the backround, especially with the instant news and information ability of the newer medias. Market specific numbers for the Herald were not released.
Some media experts point to newspapers not jumping on the digital opportunities soon enough, many are now trying to play "catch up" by taking much of their content online.
Locally, cost cutting measures seen by the public included the transfer of printing the paper to Yakima in 2012 (The Yakima Herald Republic), as well as deep staff cuts and most recently, no more Saturday edition. In addition, the company sold off the large Herald building (which opened in 2004) on Canal Drive in downtown Kennewick. This occurred in November 2019.
The newspaper is staying there for now, but long term plans are for them to find a smaller facility, especially since much of the 2004 building including the massive printing room, is not longer needed. The Herald used to derive significant revenue by printing other such publications as The Giant Nickel, but those sources have gone to other providers.
The new company officials as well as McClatchy leaders say there will be no layoffs in the forseeable future, their newsrooms will continue to operate in their current capacities. However, observers say many of the smaller operations, such as the Herald, are already cut back about as far as they can be and still operate.
There has been no mention of any significant changes to the TC Herald with the filing.
The Tri-City Herald began in 1947, when Glenn C. Lee and Robert Philip bought the Pasco Herald (which began in 1918). They moved it to Kennewick, expanded it's coverage and services and it became the Tri-City Herald.
In 1979 they sold it to McClatchy. In 1984 it was switched from an evening to a morning newspaper, the Saturday edition was added in 1987. Between 1950 and 1963, the Herald survived a 'war' with the competing Columbia Basin Herald. A group of striking TC Herald workers broke away and founded the rival paper, but it published it's last edition after a 13 year run.
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