Wall Street Journal: McClatchy was just days away from a default notice

Business writer Dale Kasler from the Sacramento Bee gave a glimpse into a furious response from McClatchy over a headline in the WSJ that McClatchy found objectionable. Kasler wrote this late Friday:

The Wall Street Journal flashed a headline on its Web site this afternoon saying the agreement will keep McClatchy "from defaulting on its debt." But McClatchy Treasurer Elaine Lintecum said the headline was wrong. "We were not defaulting," she said. The Journal took down the headline after McClatchy complained.

Really now. But when you read the actual WSJ article you see the headline isn't the issue -- it's the facts inside the article. Get this:

McClatchy Co. won concessions from banks that spared the newspaper company from a threat of default on its debt.

The publisher of the Sacramento Bee and Miami Herald said Friday its banks agreed to loosen restrictions on the company's level of debt compared to cash flow, and its ratio of interest payments to cash flow.

Analysts had said McClatchy needed to secure the changes by Sept. 30, or the company risked a technical default on its debt. A default notice could trigger a bankruptcy-court filing.

Days from default and a potential bankruptcy filing?! I haven't seen anything indicating things were that serious.

Dale's piece made it sound like the WSJ changed the headline and conceded McClatchy wasn't on the verge of default. But, when you read the actual article you realize the WSJ is literally claiming McClatchy was on the verge; a default notice could have come by September 30. But most Bee readers won't read the WSJ article because Dale didn't link to it. Hide the bad news and Bee subscribers won't notice.

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