The McClatchy Company, owner of over 30 newsrooms across the United States including the Bellingham Herald, filed for Chapter 11 bankruptcy on Feb. 13.
Citing difficulties with its ability to meet pension obligations, McClatchy plans to go through a period of major internal restructuring in order to address its debt, according to their website. Chapter 11 bankruptcy is the shifting of debts, businesses affairs and assets.
The decision is a result of the company attempting to restructure its debt reliefs and shed its pension plan obligations with the help of the Pension Benefit Guaranty Corporation, a federal agency that would guarantee pension benefits for those who qualify under McClatchy’s employee plans. The company hopes to emerge from bankruptcy within 60 days, according to McClatchy DC.
The move would amount to the McClatchy family losing control of the company, which is America’s second largest local news company. According to the Washington Post, McClatchy had been struggling with debt since its $4.5 billion acquisition of the news media company, Knight Ridder, in 2006.
Jeanne Segal, McClatchy’s public relations and communications director, said the filing will have no immediate impact on the operation of the newsrooms it owns across the United States. The company has procured $50 million in order to continue the operation of its newsrooms.
“McClatchy and all 30 of our local newsrooms, including the Bellingham Herald, will continue to operate as usual throughout the process with the same unwavering commitment to delivering strong, independent journalism essential to our local communities,” Segal said.
Ron Judd, a staff writer at the Seattle Times and former instructor at Western, said that McClatchy’s business model did little to support local news.
“McClatchy’s running this big ad campaign about supporting local news,” Judd said. “The problem is a lot of these changes they say supports local news, then you give them your money and it doesn’t support local news at all. There’s no return on that dollar you’re investing. It’s going to McClatchy’s operations somewhere else.”
Citing pressure from a variety of factors including shifts in consumer behavior, business models and advertising revenues, the company’s closure follows a general decline in print media throughout the past 15 years. According to Jack Keith, former staff editor for the McClatchy-owned Tacoma News Tribune and current instructor at Western, this is consistent with general trends found in the newspaper industry.
“There has definitely been a shift to online coverage of news, and that has decreased subscribers and advertising in print media,” Keith said. “But online ads are not providing enough revenue to solve all of the problems for news organizations, so we can see the contraction of employees and print newspapers throughout the nation.”
Local daily newspapers have seen a sharp decline in the past 15 years, with the United States losing 1,800 papers since 2004. The Bellingham Herald, Keith said, has been victim to this downsizing.
“Yes, many papers across the nation have closed in recent years, and the local paper, the Bellingham Herald, has cut its staff back to fewer than 10 reporters, editors and photographers,” Keith said. “By comparison, when I was the editor of the Herald back in the 1980s and early ’90s, we had about 30 staffers in the newsroom.”
Judd said that the Herald’s downsizing has done a serious disservice to the health of Bellingham’s community news.
“There are a lot of places in the country that don’t have a newspaper or a news organization at all, and those are called ‘news deserts,’” Judd said. “In some ways, I think it’s almost worse to have an appearance of an effective news organization in a place because the public assumes someone is watching over all this stuff.”
McClatchy’s control over their newsrooms determines a variety of factors, including their staff size and frequency of output, according to Keith.
“It can impact the number of reporters and editors a news staff can use, as well as the number of days it publishes each week,” Keith said. “Many newspapers are reducing size and cutting back from a daily schedule to fewer days. The Bellingham Herald, a McClatchy paper, went to six days a week last summer.”