McClatchy to Declare Bankruptcy?

Just some scuttlebutt from a gathering of current and former company execs a few months ago.

The most depressing thing about the never-ending Tribune bankruptcy were all the disputes about executive bonuses. When it started we figured the judge would scold the execs and put them in their place ("how dare you claim you're entitled to this after running the company into the ground yada yada yada") --- instead, he sided with them just about every time.

 

Courts are pay to win.

 

At the end of the third quarter, McClatchy reported: "509,400 total paid digital customer relationships". McClatchy does not have a big enough digital base to go 100% electronic.

 

Entirely? Damn.

 

If you work in a position where your paycheck is more than 50% relied upon by print newspapers, you have only yourself to blame for not finding a new job pronto.

 

I want to retire pronto. Just running out the clock for 33 months.

Two bankrupt companies on my resume is plenty.

 

That is very true.

 

I have a few questions.
1.)

I have a few questions. If Chatham is the new owner, what happens? Does McClatchy with all its Gannett-like mannerisms still run the show? Or does Chatham start to run the news organization. Do you think that company will have layoffs? Is Chatham blood thirsty, wanting to bleed all the papers of all their funds which means firing up to 50 percent of the content producers?
We know what happens when Gatehouse takes over. What should the McClatchy employees expect in coming months?

 

Guess what else Chatham owns?
Hedge Fund Behind Trump’s Favorite Tabloid To Own McClatchy

 

Right now 65 employees are producing print products for 28 newspapers, basically throwing shit on pages as fast as they can. The next layoffs from this side will be when they just shut it down completely.

 

I was reading the latest 10-Q of McClatchy. Total digital advertising revenue declined 14.7% in the first three quarters of fiscal year 2019.

So digital is not going to be the answer. McClatchy will generate about 70 million dollars of EBIDTA in FY2019 this year on revenues of about 700 million. Revenues in the first three quarters declined about 12%. So if revenues fall 10% in FY2020 that will eat up the EBITDA.

Which means that cuts will continue (if possible, at some point there are just not enough people to put out the product). But McClatchy owns 30 papers. Some are less profitable than others. I think that some of these papers are about to go negative cash flow if revenues continue to decline.

I don't think Chatham is going to carry a paper with negative cash flow. When a paper goes negative cash flow at McClatchy I would expect it to be sold to a neighboring paper just as Youngstown and Durham were.

 

There was just a story four days ago about the likelihood of the largest papers being sold.

Who Will Buy McClatchy’s Largest Newspapers?