Are The Sacramento Bee and its parent company, McClatchy, teetering on the edge of bankruptcy, as Bloomberg News reported last week? Even if bankruptcy reduces McClatchy’s massive debt, will The Bee have to lay off even more staff and reduce publication?
While McClatchy’s decline began in 2006 with the ill-fated purchase of the Knight-Ridder newspaper chain, and was made worse by the ongoing loss of advertising dollars to Facebook and Google, the ton of bricks that prompted the bankruptcy speculation was the announcement that the IRS had turned down McClatchy’s request to delay a $124 million payment to its pension fund.
Wall Street responded by sending McClatchy stock, already depressed, into a tailspin. It opened Monday at less than 38 cents per share. This means that McClatchy’s 30 newspapers have a market value of roughly $3 million, the cost of a large home in San Francisco.
Having sold off many of its buildings and barely making an operating profit, McClatchy’s ability to make the pension fund payment seems unlikely. Late last week, Bee reporter Dale Kasler wrote a story summing up the various options that McClatchy is facing, including the possibility of being taken over by Chatham Asset Management, its biggest lender and shareholder and one of the hedge funds that now own the biggest newspaper chains in the country. These hedge funds have consistently shown more interest in their bottom line than in the news operations. It seems likely that McClatchy, after bankruptcy reorganization, will continue on a downward spiral.
Over my 30 years in Sacramento, I have not had a good relationship with The Bee’s managers. They have very sharp elbows, and tried repeatedly to put us out of business, particularly in our first years here.
But I am saddened by recent developments. I feel like an athlete heartbroken to see a competitor go down with a serious injury. Our differences with The Bee are minor compared to what we have in common.
I believe in journalism.
According to Penelope Muse Abernathy, a professor of journalism and digital media economics at the University of North Carolina, “Economists call public service journalism a ’public good’ because the information conveyed through news stories helps guide decision-making in our society. A 2011 report by the Federal Communications Commission found that local newspapers are the best medium to provide the sort of public service journalism that shines a light on the major issues confronting communities and gives residents the information they need to solve their problems. But, in many communities today, there is simply not enough digital or print revenue to pay for the public service journalism that local newspapers have historically provided.”
There are many professionals who disseminate information, such as attorneys, public information officers and public relations specialists. These professionals, however, make the case for whoever happens to be their current client. Journalists, on the other hand, are trying to get the story right and uncover the facts, even when there may be powerful people trying to keep the truth hidden.
Because of an independent press, we learned about Wells Fargo creating fraudulent accounts, police officers shooting unarmed black men, Kevin Johnson’s misuse of city resources and about sexual harassment at the county jail. An independent press protects our democracy, exposing lies, scandals, corruption and misspending of public dollars.
And today there are numerous individuals, organizations and even governments putting out false statements. Without an independent press, people, organizations and foreign governments could spread false or fabricated information without penalty.
Never has an independent press been so necessary. Yet never has it been so threatened.
More than one-fifth of all newspapers in the U.S. have closed down in the last 15 years. Those that remain have downsized dramatically, cutting staff, print pages and publishing days. Digital advertising, while great for Google and Facebook, has not helped newspapers.
As opposed to The Bee, we have been able to maintain our circulation and readership, now nearly matching The Bee’s weekday print circulation on the day we publish. If The Bee continues to lose 20% of print subscribers each year, then we will soon be the dominant print news source in Sacramento.
But things are not rosy at SN&R, either. We, too, have been impacted by the decline in retail advertising, and recently we lost much of our marijuana advertising when the dispensaries consolidated after legalization. To keep our papers alive, we refinanced our Chico building, and my wife and I put more of our savings into the paper.
Yet our road to sustainability is only a few thousand dollars per week. A small portion of The Bee’s advertising revenue would make our paper sustainable.
Thirty one years ago, my wife and I moved down from Chico to launch SN&R. We did so with the belief that our paper could make a real difference in Sacramento by speaking truth to power, giving voice to the voiceless, putting a spotlight on the arts. I am very proud of SN&R’s 30-year history.
Our survival is only possible because of our readers, our advertisers and so many dedicated staff members who worked so hard for little pay. Sacramento needs an independent press. And we need your support.
We are strongly committed to closing the gap and keeping SN&R publishing. Please support our advertisers. If you own a business, let us bring you customers. If you can, please contribute to our Independent Journalism Fund.
And thank you for reading.