To executives of McClatchy, Thursday’s bankruptcy of the second largest newspaper chain in the US is the fault of its pensioners, who outnumber current employees by a margin of 10 to one.
To industry analysts of the troubled newspaper sector it was simple economics, the inevitable consequence of a company expanding its empire through accumulated debt at the same time its customer base was shrinking.
Yet whatever the reasons for the failure of a company that publishes many of the biggest titles in American journalism, including the Miami Herald, Fort Worth Star Telegram, Charlotte Observer and its hometown Sacramento Bee, there is no doubting the cost: truth and knowledge in an era of rampant fake news and misinformation.
“It’s a big, big loss for American democracy,” said Nicholas Lemann, the dean emeritus of the Columbia school of journalism.
“It’s not just the super incredible home run Jeffrey Epstein story by the Miami Herald that’s gone, it’s the day-to-day coverage of the mayor, the governor, the major companies, you know just being there to make the people who run the place know they’re being watched.”
Initially, at least, McClatchy insists there will be no changes or cutbacks in its 30 newsrooms across 14 states, despite net losses of $364m in the first nine months of 2019.
In announcing the “sad milestone” of its filing for Chapter 11 protection, the company founded during the California gold rush promised to emerge stronger and “committed to essential local news and information” through a beefed up digital presence, according to the chairman Kevin McClatchy.
Yet some analysts predict the break-up of the company will follow, while others are certain the reorganization and elimination of McClatchy’s $700m debt and astronomical pension obligations will signal new rounds of belt-tightening, barely a decade after it splashed out $4.5bn to buy the rival Knight Ridder chain.
Pew Research reported last summer that newsroom employees in the US dropped 47% from 2008 to 2018, and at the Miami Herald declining print revenues and dwindling circulation saw 70 more jobs cut last month as the newspaper shuttered its printing presses to merge with a local rival.
“I’ve always been a fan of McClatchy and that’s from someone who’s no fan of big-chain newspapers,” said Christopher Ali, a professor in the University of Virginia’s department of media studies. “They seem to have understood for years the importance of local news.
“[But] when a large chain says we’re going to emerge from bankruptcy stronger and more digital, these are red flags. In this case digital is just a placeholder for wire or national content and I wouldn’t be surprised to see investment going to McClatchy’s centralized news production system.”
Newsroom employees at the Miami Herald promised an “unwavering commitment to strong local journalism” on Thursday in the wake of their parent company’s bankruptcy and likely sale to a hedge fund, Chatham Asset Management.
In communities where the newspaper closes we have depressed voter turnout. That’s been documented. The implications here for politics are a less informed citizenryChristopher Ali
“When our journalism and our livelihoods are threatened by the decisions from our corporate owners our communities suffer,” One Herald Guild, the newly recognized union chapter of Herald newsroom employees, said in a tweeted statement.
“We are committed to defending our newsroom’s priorities regardless of ownership.”
Lemann, however, who examines the future of the US regional press in an article entitled Can Journalism be Saved? in the current New York Review of Books, expects the “systematic decline” to continue.
“It’s not because of how they cover or don’t cover national news, it’s not because of what the president says about them, it’s because Google and Facebook and Craigslist have taken all their advertising away,” he said.
“I don’t think the future is digital. I don’t see an answer for the salvation of American newspapers through market mechanisms. I wish it weren’t so but that’s what I’m seeing. If you go digital you still can’t compete for advertising with Google and Facebook.”
As well as the Herald’s expose about Epstein’s pedophile ring, McClatchy reporters have broken several big stories in recent years, including a share in the 2017 Pulitzer Prize for exposing the Panama Papers scandal.
Ali fears that such powerful journalism could be lost following McClatchy’s bankruptcy, with political implications for the 2020 presidential election and beyond.
“We know from empirical research that reading the local newspaper makes you a better voter, it makes you more inclined to vote, it makes you more involved in politics and civic life,” he said.
“In communities where the newspaper closes we have depressed voter turnout. That’s been documented. So the implications here for politics are a less informed citizenry, which is something we should all be worried about, Republicans, Democrats and independents.”