Sunday, July 12, 2020

Biggest creditor wins bankruptcy auction for McClatchy Co.

Hedge fund Chatham Asset Management won the bankruptcy auction for McClatchy Co. Sunday, McClatchy announced. Chatham is the main creditor of the family-owned firm that is the nation's second largest local-news company, with 30 titles in 14 states.

Margaret Sullivan, media critic for The Washington Post, said on CNN's "Reliable Sources" that Chatham was the better of "two lousy options," the other being Alden Global Capital, which owns MediaNews Group and about a third of Tribune Co.

"Chatham is majority owner of Canada’s largest newspaper chain, Postmedia Network Canada. The hedge fund said, “Chatham is committed to preserving newsroom jobs and independent journalism that serve and inform local communities during this important time.”

Sullivan said, "I find that a little hard to believe because hedge funds have not been the best newspaper owners," but she said that among McClatchy people she had talked with: "There is something of a sense of relief."

Mayors of four cities served by McClatchy wrote the bankruptcy judge last week, asking him to consider the impact of the sales on the communities it serves. In Kentucky, McClatchy's Lexington Herald-Leader,  unlike most other metropolitan newspapers, serves a large rural area: Eastern Kentucky.

“Yes, the newspaper holds our feet to the fire through investigative stories and in-depth coverage,” Lexington Mayor Linda Gorton wrote. “While it’s not always comfortable, it’s always important to challenge the decisions cities make, and to deeply examine the actions of government.”

Noting her city's population of 325,000 "Unlike major media markets, we do not have a large press corps." The Herald-Leader has three journalists in Eastern Kentucky, two of them funded  by Report for America. Gorton is a Republican, but her office is nonpartisan.

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