The McClatchy Company – the California-based newspaper chain fondly remembered by some in Alaska as the owners of the Anchorage Daily News for 35 years before the Alice Rogoff-Alaska Dispatch News debacle – this week continued its decline with the announcement of yet more downsizing.
Once a company with dreams of national news dominance, McClatchy has been on the ropes for more than a decade. One of its best business deals of the decade – possibly its best business deal – was convincing Rogoff the ADN was worth $34 million in 2014.
Having paid that exorbitant price, Rogoff proceeded to lose $26 million before she took the newspaper into bankruptcy only three years later. The Binkley company obtained the wreckage for $1 million and quickly changed the name back to the Daily News in an effort to get away from the Rogoff taint.
The newspaper operates today as a shadow of what it was in its heyday, but there is little reason to believe the situation would be any different if McClatchy had stayed the course.
So much has changed since 2006 when McClatchy hit its peak amid dreams of journalistic glory.
It was in March of that year that the company led by CEO Gary Pruitt and vice-president for news Howard Weaver, a former editor of the ADN, oversaw the approximately $4.5 billion purchase of Knight-Ridder Inc., a newspaper chain more than twice the size of McClatchy.
The deal instantly made McClatchy into the second-largest newspaper chain in the country, but left the company saddled with debt. McClatchy began dumping some of its new newspapers and journalists before the ink was dry on the deal, and it was all downhill from there.
The first layoffs at the ADN came in 2008 with more to follow in 2009. Though the newspaper never publicly revealed its finances at the time, its books would reveal to Rogoff that ADN was making about $10 million a year at the time.
The money was badly needed in Sacramento, however, to keep the company afloat. From the time of the Knight-Ridder purchase until today, McClatchy has been walking on a razor’s edge trying to keep profits as high as possible at its most profitable papers to avoid its own Rogoffesque end in bankruptcy court.
The Miami New Times reported today that McClatchy this week sent a letter to all of its employees saying it wants to cut staff by another 450 employees – 10 percent of its work force – via voluntary buyouts.
“Approximately 450 of our colleagues will receive a voluntary early retirement offer today via email,” a copy of the letter obtained by New Times said. “Colleagues who receive an offer will have the opportunity to participate in webinars and consult with representatives of the People team directly, to determine if this opportunity is right for them and their families. We’ve taken this action with intention, deliberation and respect for the contributions these colleagues have made to our company. It is important to us that they are empowered to decide the next steps on their career paths.”
The letter did not say what actions McClatchy planned to take if it didn’t get a 10 percent voluntary reduction. McClatchy has now gone through so many buyouts and layoffs at its many papers that it’s hard to keep track of the number.
Lean, mean, fighting machine
The latest targeted buyout offer provides the company some selectivity in who stays and who goes. McClatchy layoffs have historically been based on seniority.
Those sorts of layoffs have a bad tendency to leave a lot of deadwood in the seats behind the computer screens. And no news organization trying to survive in the digital world has any use for deadwood, except maybe to start a fire to keep the office warm after the heat is turned off because the gas bill has gone unpaid for too long.
Times are tough in the news business.
McClatchy is not the only news organization to announce staff reductions in recent days. BuzzFeed, once the hottest of digital news organization, last week announced it was slashing staff. Vice Media joined McClatchy in announcing cuts this week.
The business is plagued by competition for advertising revenue from Google, Facebook and many non-news sites on the internet, and by competition from citizen-news organization that pop up on their own websites (like this one) or on Facebook and Twitter where almost anyone – or any government entity or non-government organization (NGO) – can begin reporting about almost anything.
In a move to try to cut out some of the competition, some news organizations have been working with Microsoft on a “NewsGuard” filter for the company’s newest Edge browser.
NewsGuard will funnel people toward “trusted” news sites and away from amateur, pseudo, slanted and fake news sites, Cnet reported. The idea is already running into opposition.
Breitbart called the filter an attempt at “financial blacklisting.”
“NewsGuard’s tactic is similar the one used by far-left smear peddlers Sleeping Giants, whose mission is to spread baseless accusations of racism and white supremacy to the advertisers of pro-Trump media outlets in order to put them out of business and silence their voice,” the website charged.
“The effect isn’t merely to silence pro-Trump media. It also ensures advertisers don’t market their products to Trump voters, causing them to rely less and less on consumers in the heartland, and more on progressive consumers who read establishment news sources. The ultimate result: corporations cater their products and ‘corporate values’ even more to the latter, and not at all to the former.”
How this all plays out only time will tell. It could well backfire on traditional, mainstream media.
Almost everyone in the U.S. – right, left, center, liberal, conservative, socialist, capitalist, ad infinitum – wants trusted news, but the trust in media is so broken it’s hard to believe a business like Microsoft working with the mainstream to define trusted is going to help.
A September poll by Gallup and the John S. and James L. Knight Foundation concluded that nine in 10 Republicans now distrust the media. They are likely to be the people most suspicious of “trusted” news certified by mainstream journalists they already distrust. Some might even decide they should decide which news sites to trust rather than be told which news sites to trust.
Not to mention that the timing of NewsGuard couldn’t be much worse, coming as it does in the wake of the Covington affair in Washington, D.C. where mainstream media badly misportrayed the actions of a Native rights activist who confronted a group of Catholic school teenagers.
And trust is not something anyone or anything gets or gives via a rubber stamp or the digital equivalent in the form of a green icon from Microsoft. Trust is something that must be earned, and by and large, the media isn’t working very hard at trying to convince all Americans that it can at least try to be fair to everyone.
“That era’s journalism was hyper-political and deeply biased. But some historians believe that it was also more engaging,” Thompson wrote. “As Gerald J. Baldasty, a professor at the University of Washington, has argued, these newspapers treated readers as a group to engage and galvanize. Perhaps as a result, voting rates soared in the middle of the 19th century to record highs.”
Some days it’s hard to avoid wondering if we aren’t already there.
I wish McClatchy luck in the ongoing struggle to survive. I spent a good part of my journalism career with McClatchy. It was a good company for which to work until the financial stress became serious.
Tough times bring out the best in some people and some organizations. Unfortunately, most people and most organizations aren’t at their best in such circumstances, and the media is now in a time of tough, tough times.