1. I got into a discussion this afternoon with a local, talking about the state of the Olympian and whether it would be worthy of support if it changed its corporate structure to a non-profit. Here’s the original argument:
I don’t disagree about local news being produced by non-profits. Great idea.
The Olympian is the only professional organization covering the news in the city I love. Let’s just not call them names while they’re doing it is all I’m saying.
Also, I think we’re missing a lot of nuance on the current state of the Olympian’s corporate owners, the McClatchy company. I’ve been reading a lot about them lately, so I wanted to write down what I’ve learned.
2. I’m not sure how many of us realize how quickly the fate of the Olympian could turn. And turn so quickly and quietly that we’d have no reason to notice. Right now, the paper’s parent company is in the process of trying to negotiate a deal on $124 million in pensions it is due to pay. After spending the better part of the last decade paying down $4 billion in debt it took on to buy up Knight Ridder (of which the Olympian was part), McClatchy seems to face this one additional hurdle to start making forward progress.
While this is happening, the stock price of the company tanked, going now for only pennies per share. That gives the managers of the company very little room to move as they try to chart a path forward. The immediate risk from my point of view had been just that McClatchy would declare bankruptcy. Maybe, I thought, they would just shut the Olympian down, maybe just fold it directly into the Tacoma News Tribune.
But there is a fate worse than death. And a fate that because McClatchy almost killed itself buying our paper (along with dozens other) we’ve avoided as the company tries to get itself back on its feet. Hedge funds, like the one described here, are ripping through the carcasses of struggling newspapers, feeding investments with the goodwill of subscribers:
It is no secret that the newspaper business is in decline. So it’s hardly surprising that Freeman would feel the need to shrink the head count at his newspapers, just as almost every other newspaper owner has had to do for years.
But what sets Freeman apart is that he seems to have a rather unique view of a newspaper’s purpose. In this view, his papers are intended not so much to inform the public or hold officialdom to account, but to supply cash for Freeman to use elsewhere. His layoffs aren’t just painful. They are savage.
…
Last year, Digital First Media’s chief executive, Steve Rossi, sent a company-wide email saying that the company was “solidly profitable,” and that “advertising revenue has been significantly better” than competitors. Yet the layoffs have not let up. Just last week, Alden Global imposed another round of layoffs, including a third of the staff at the Denver Post. As recently as 2009, Denver had two competing newspapers; it is now down to 66 journalists in one demoralized newsroom.
And, this is a fate we’re avoiding in Olympia because our newspaper was luckily bought by a company that is still interested in being a newspaper company.
Meanwhile, in August, the New Media Investment Group announced that it was buying Gannett Co. and combining it with its GateHouse Media subsidiary, which instantly created the largest newspaper chain in the country. New Media is controlled by Fortress Investment Group, and its approach is not terribly different from Alden Global’s. People are starting to call papers owned by hedge funds “ghost papers” — defined by the New York Times as “thin versions of once robust publications put out by bare-bones staffs.”
Although they’ve had their share of layoffs, McClatchy’s 30 media properties… are not ghost papers. A little more than a year ago, Julie K. Brown, a journalist at the Miami Herald, published an extraordinary expose of the convicted sex offender Jeffrey Epstein; that series sparked an outcry that led to Epstein’s arrest in July. In October, the well-regarded McClatchy Washington bureau documented a disturbing rise in the rate of cancer treatments at Veterans Affairs hospitals. And just a few weeks ago, the Kansas City Star published a powerful examination of Missouri’s public defender system
I’ve pulled a lot of quotes from Bloomberg’s coverage of McClatchy, but Joe Norcero’s “McClatchy Goes Digital to Ward Off ‘Ghost Papers’” article is a good discussion as any of McClatchy’s current situation. The most telling part of the article to me is where I learned that the actual McClatchy family hasn’t taken a dividend in a decade. This is not a company that is trying to squeeze blood from a stone.
3. The Sacramento News and Review is an alt-weekly that does a great job skewering the Sacramento Bee, the McClatchy mother paper. But even they point to the Bee as an irreplaceable local asset. Whenever I feel sad about the state of local papers, I remind myself that people of goodwill exist by reading Eric Johnson’s “Support the Bee Anyway” and “Save the Bee.”
For the record, I’m all for the non-profit, locally controlled Olympian. I’m all for the web-based non-profit locally owned web-based, podcast heavy local news organization. I’m all for all of that.
But this is a bus stop, not UberX. I need to pay the fare for the bus that gets me closest to my destination. So I support the Olympian anyway.
