McClatchy's Gary Pruitt sounds like a man on a PR campaign to keep his job, not a leader explaining his plan to get his company out of a deep hole.In an interview published Wednesday in the Wall Street Journal, Pruitt said he plans on remaining at the helm of McClatchy Company despite presiding over one of the most stunning declines in modern newspaper history.
The problems facing McClatchy are not a surprise to readers of this blog. From the Wall Street Journal:
But since the beginning of 2006, Mr. Pruitt's company has lost $1.46 billion and seen its stock price plunge 78%, exceeding the carnage at most newspaper companies.
The value of the company has shrunk dramatically.
McClatchy took on $1.9 billion in debt in the deal. To afford the purchase, it quickly sold a dozen of the 32 papers it acquired. As a mark of how far investors have soured on the company, McClatchy -- which in addition to its 31 dailies has about 50 weeklies -- has a stock market value just above $1 billion, about what the New York Times paid for a single paper, the Boston Globe, 14 years ago.
Publicly, the McClatchy family claims they are sticking by Pruitt. "We have the best person in place to get us through some of these turbulent times," Kevin McCarthy is quoted as saying. But if the stock price keeps dropping, Pruitt's job will be in jeopardy.I predicted here that Gary Pruitt will "resign" in 2008 and walk away with a severance package worth tens of millions.
Earlier this month Jon C. Ogg from 24/7 Wall Street said Pruitt should be replaced. My previous posts on Gary Pruitt are here and here and here.
