Layoffs across the McClatchy newspaper chain in late September, affecting more than 90 staffers at 17 publications, have sparked discussions about the future stability of regional news outlets. These reductions included essential beat reporters at various papers, such as one covering city hall for The Miami Herald and another focused on Tacoma and Pierce County for The (Tacoma) News Tribune. Other newspapers in the region, including those in Olympia, Bellingham, and Tri-Cities, were also affected.
The layoffs suggest that Chatham Asset Management, the private equity firm that acquired McClatchy in 2020, may be preparing to sell or dismantle the company. This theory was proposed by Brier Dudley, who noted the significant reduction in journalistic staff. McClatchy leadership declined to comment publicly on the reasons for these newsroom cutbacks.
While McClatchy has expressed enthusiasm for artificial intelligence, the reporting suggests that AI cannot fully replace the work of experienced journalists, particularly in providing content that justifies subscription costs. The ongoing challenges highlight a critical juncture for communities served by these publications.
Looking ahead, potential buyers for McClatchy papers may not offer significant improvements in newsroom staffing or local coverage. Alden Global Capital, a Wall Street firm known for severe cost-cutting at its approximately 160 papers, is one such entity. Another is Lee Enterprises, an Iowa-based chain controlled by Florida billionaire David Hoffmann. While Hoffmann has expressed a desire to save local news and avoid layoffs, Lee Enterprises itself implemented layoffs affecting editors and copy editors in late August and September, even within its already sparsely staffed newsrooms.
An alternative possibility is that McClatchy could be broken up and sold for parts. This scenario could create opportunities for local investors and community groups to acquire and restore their newspapers. Such efforts often involve collaboration with organizations dedicated to preserving local journalism by purchasing and stabilizing newspaper groups.
A notable example of this model occurred in Georgia in July, when The Macon Telegraph and Columbus Ledger-Enquirer, both former McClatchy dailies, were acquired by the Georgia Trust for Local News. This trust, a subsidiary of the Colorado-based National Trust for Local News, worked with local foundations and residents who provided funding for the acquisitions and subsequent investments.
Cynthia DuBose, executive director of the Georgia trust, highlighted the importance of The Macon Telegraph as a "vital community asset" for Middle Georgia, emphasizing the commitment to invigorate and strengthen it through enhanced community engagement and quality local news. The trust operates similarly to for-profit publishers in centralizing administration to reduce costs, aiming for financial sustainability without the demands for immediate returns that investment funds often require. Tom Wiley, national CEO of the National Trust for Local News, described their funding as "patient capital" provided by philanthropy.
Wiley expressed interest in acquiring additional McClatchy papers, noting the success of their "hub-and-spoke model" in Maine and now in Georgia. He believes newspapers can still be a viable business, not solely dependent on charity, with the "magic sauce" being local talent, good operations, and patient capital that recognizes their civic value.
This perspective views newspapers as civic institutions that contribute to an informed electorate, quality of life, and common information across various community aspects, from arts to high school sports. Foundations in Georgia recognized this civic value, which led to their investment in the former McClatchy papers.
McClatchy, founded during the Gold Rush era in Sacramento, grew into a national chain, acquiring Knight Ridder in 2006. The company declared bankruptcy and was purchased by Chatham Asset Management in 2020. Since then, McClatchy has merged with other Chatham ventures and now describes itself as an "omni-commerce sales, distribution and logistics, marketing and media company." Despite these shifts, journalists have continued their work amid shrinking newsrooms, with ownership prioritizing omni-commerce.
Brown McClatchy Maloney, a descendant of the founder, shared that the family now has no involvement in the newspaper business they ran for five generations and that the layoffs "pains me in a big way." He suggested that a transition of these institutions to local community ownership could represent the ultimate form of community service. Communities in regions served by McClatchy papers, including those around Federal Way, may want to consider their options should opportunities for local ownership arise.
