The McClatchy Company

The McClatchy Company
Public
Traded as NYSE: MNI
Industry Publishing
Founded February 3, 1857
Founder James McClatchy
Headquarters Sacramento, California
Key people
 Kevin McClatchy
(Chairman)
Craig Forman
(President and CEO)
Products Newspapers
Revenue Decrease US$977 million (2016)[1]
Increase US$22.5 million (2016)
Increase −US$34.1 million (2016)
Number of employees
 5,600 full and part-time (2015)
Website mcclatchy.com

The McClatchy Company is a publicly traded American publishing company based in Sacramento, California. It operates 29 daily newspapers in 14 states and has an average weekday circulation of 1.6 million and Sunday circulation of 2.4 million.[1] In 2006, it purchased Knight Ridder, which at the time was the second-largest newspaper company in the United States (Gannett was and remains the largest). In addition to its daily newspapers, McClatchy also operates several websites and community papers, as well as a news agency, McClatchyDC, focused on political news from the U.S. capital.

History

The company originated with The Sacramento Bee, which was first published on February 3, 1857, after the California Gold Rush. James McClatchy took over as editor of the Bee within a week.

For most of its history, the company was focused on the newspaper business in California's Sacramento Valley and San Joaquin Valley. It acquired its first out-of-state newspapers in 1979 and, through numerous subsequent acquisitions, has grown into a nationwide company in the U.S. In its first moves outside its home state, McClatchy bought the Anchorage Daily News in Anchorage, Alaska, and the Tri-City Herald in Kennewick, Washington.

McClatchy acquired then-ABC-affiliate KOVR from Metromedia in 1963. The company's own Modesto Bee reported the sale of the station.[2] It was sold to The Outlet Company in 1978 and today exists as a CBS owned-and-operated station.

In 1990, McClatchy acquired three dailies in South Carolina: The Herald in Rock Hill, The Island Packet in Hilton Head, and The Beaufort Gazette of Beaufort. In 1995, it acquired The News & Observer of Raleigh, North Carolina, and in 1998, it bought the Star Tribune of Minneapolis.

In January 2004, McClatchy bought the Merced Sun-Star of Merced, and five affiliated non-dailies in California's San Joaquin Valley.

The company's biggest acquisition occurred on June 27, 2006 when McClatchy purchased Knight Ridder. Because McClatchy was so much smaller than Knight Ridder at the time, one observer equated the deal as "a dolphin swallowing a small whale."[3] The purchase price of $40 and 0.5118 shares of McClatchy Class A stock per share was valued in total at about $4 billion in cash and stock. The company also assumed $2 billion in debt. This purchase added 20 newspapers to the company stable and the immediate sale (over the next five weeks) of 12 publications including the St. Paul Pioneer Press, San Jose Mercury News and The Philadelphia Inquirer. Those sales were completed on Aug. 2, 2006

In July 2008, McClatchy sold the company's digital advertising network, "Real Cities" to a Chicago-based marketing firm named Centro. The "Real Cities" network was liquidated by Centro the following month.

The Minneapolis-St. Paul Star Tribune, acquired in 1998 and sold in 2007 to private-equity firm Avista Capital Partners for $555 million, had the highest circulation of all McClatchy newspapers.

The company also owns a portfolio of digital assets, including 15.0% of CareerBuilder, LLC, which operates CareerBuilder.com; 25.6% of Classified Ventures, LLC, a company that offers classified websites, such as the auto website Cars.com; and 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com. McClatchy also owns 49.5% of the voting stock and 70.6% of the nonvoting stock of The Seattle Times Company.[1]

In January 2017, former Yahoo! and Earthlink executive Craig Forman was appointed as its new president and chief executive officer (CEO). Forman, who is 55 years old, and a private investor and current McClatchy board member succeeds Patrick Talamantes, who was CEO for four years.[4]

Company infrastructure

As of 2015, McClatchy had approximately 5,600 full and part-time employees (equating to approximately 5,100 full-time equivalent employees).[1] The company has two classes of stock, allowing the founding McClatchy family to retain control. In the Knight Ridder purchase, for example, McClatchy shareholders did not need to act in approving the purchase because the family had already voted their shares in favor.

Editor and Publisher reported in October 2006 that McClatchy revenue ending August 2006 was down over one percent from August 2005. Between the announced purchase of Knight Ridder in March 2006 and late 2009, the stock value of McClatchy (MNI) declined significantly.[5] On December 18, 2008, McClatchy common stock fell below $1 per share. The market capitalization of the company fell below $100 million, down over 98% since the purchase of Knight Ridder in early 2006.[6] In 2010-2011, the stock had recovered off of its low, but is still down over 90% from the peak.

In 2016, McClatchy approved a 1 for 10 reverse stock split that boosted the price of its shares to over $11.[7]

McClatchy has an Internet subsidiary, McClatchy Interactive (formerly known as Nando Media), which provides business support and material for Internet media (part of the News & Observer purchase). Other operations include Newsprint Ventures Inc., a consortium that operates the Ponderay newsprint mill near Spokane, Washington.

McClatchy also inherited a partnership with the Tribune Company in the news service Knight Ridder-Tribune Information Services, now McClatchy-Tribune Information Services (MCT), when it acquired Knight Ridder.[8] In 2014, Tribune bought out McClatchy's share of the company and its headquarters moved to Chicago.[9]

McClatchyDC

McClatchyDC is a news agency that distributes original reporting based out of McClatchy's Washington, D.C. bureau, which was acquired from Knight Ridder. It is the largest client of the McClatchy-Tribune Information Services.[9]

In 2008, McClatchy's bureau chief in D.C., John Walcott, was the first recipient of the I. F. Stone Medal for Journalistic Independence, awarded by the Nieman Foundation for Journalism.[10][11] In accepting the award, Walcott commented on McClatchy's reporting during the period preceding the Iraq War:

Why, in a nutshell, was our reporting different from so much other reporting? One important reason was that we sought out the dissidents, and we listened to them, instead of serving as stenographers to high-ranking [Bush administration] officials and Iraqi exiles.[11]

McClatchy journalists have also won nine Pulitzer prizes in their 159-year history.[12]

Criticism

On August 4, 2013, McClatchy Newspapers, citing anonymous sources, reported on conversations between Ayman al-Zawahri, who succeeded Osama bin Laden as the head of Al Qaeda, and Nasser al-Wuhayshi, the head of the Yemen-based Al Qaeda in the Arabian Peninsula, discussing an alleged imminent terrorist attack. Two days previously, The New York Times had agreed to withhold the identities of the Al Qaeda leaders after US intelligence officials claimed the information could jeopardize their operations. Government analysts and officials interviewed by the Times said the impact of this disclosure caused more immediate damage to American counterterrorism efforts than the thousands of classified documents disclosed by Edward Snowden due to a sharp drop in the terrorists’ use of a major communications channel that the authorities were monitoring.[13] Subsequently, officials have been searching for new ways to monitor communications among Al Qaeda's leaders and operatives.[13]

Dailies

Note: (*)—Indicates newspaper acquired in 2006 Knight Ridder purchase.

Dailies acquired in Knight Ridder purchase, then sold

See also

References

  1. 1 2 3 4 2016 McClatchy Form 10-K Annual Report
  2. ↑ "Google News Archives: The Modesto Bee- October 4th, 1963". Google News Archivials. McClatchy/ Google. Retrieved 3 June 2012.
  3. ↑ "Newspaper Chain Agrees to a Sale for $4.5 Billion", The New York Times
  4. ↑ News, ABC. "Craig Forman New CEO of McClatchy Co.". ABC News. Retrieved 2017-01-26.
  5. ↑ "MNI: Basic Chart for MCCLATCHY CO HLD – Yahoo! Finance". Finance.yahoo.com. Retrieved 2009-11-11.
  6. ↑ "MNI Interactive Stock Chart - Yahoo! Inc. Stock - Yahoo! Finance". Retrieved 30 May 2015.
  7. ↑ McClatchy Company (MNI) Board Approves Reverse Stock Split, Expanded Buyback Authorization 18 May 2016. Retrieved 1 August 2016.
  8. ↑ Seelye, Katharine Q.; Andrew Ross Sorkin (2006-03-12). "Knight Ridder Newspaper Chain Agrees to Sale" (Fee). The New York Times.
  9. 1 2 Beaujon, Andrew (May 8, 2014). "Tribune buys out McClatchy’s stake in MCT newswire". Poynter. Retrieved June 2, 2017.
  10. ↑ Grinapol, Corinne (April 7, 2016). "Reuters Adds John Walcott as Foreign Affairs and National Security Editor". AdWeek. Retrieved June 2, 2017.
  11. 1 2 Walcott, John (October 9, 2008). "John Walcott: Truth is not subjective". Acceptance speech. McClatchy Newspapers. Retrieved 2008-10-13.
  12. ↑ "Pulitzer Prizes". McClatchy.com.
  13. 1 2 Schmitt, Eric; Schmidt, Michael S. (September 29, 2013). "Qaeda Plot Leak Has Undermined U.S. Intelligence". The New York Times.
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