The McClatchy Company, burdened by debt and a steep slide in newspaper advertising, wants to sell one of its most prized properties, The Miami Herald, according to people briefed on the company’s plans.The problem for McClatchy is this: smart investors won't buy the Miami Herald now, because the value is dropping like a rock and they can get it alot cheaper later on.
McClatchy, the nation’s third-largest newspaper chain, has approached potential buyers for The Herald, said these people, who asked for anonymity because they were not authorized to discuss the issue. But they said they knew of no serious offers for the paper, reflecting the evaporation of major investors’ interest in buying newspapers.
The company refused to discuss the matter. Elaine Lintecum, the treasurer, said, “We do not comment on market rumors.”
The Herald is one of the largest of McClatchy’s 30 daily papers, with daily circulation of 210,000, and arguably the most prestigious, having won 19 Pulitzer Prizes. But it is not clear what kind of bids it might fetch, if any; with newspaper profits shrinking fast, the economy contracting and credit tight, many newspapers have been on the block for months without selling.
The people briefed on the company’s plans say The Herald generates a very slim operating margin and that the most attractive part of any deal could be its prime waterfront real estate. But the Florida real estate market is in deep recession — one of the reasons for the struggles of the paper, which used to benefit from heavy real estate advertising.
The bid to sell The Herald continues the fallout from McClatchy’s $4.5 billion purchase in 2006 of Knight Ridder, the newspaper chain that had owned the Miami paper. Largely as a result of that deal, one of the biggest in the industry’s history, the company has about $2 billion in debt, payments on which eat up much of its cash flow.
Some Wall Street analysts warned at the time that McClatchy, based in Sacramento, had overpaid, but even they did not expect the steep decline in newspaper advertising that began months later and has accelerated this year.
The drop has been most pronounced in Florida and California, states where McClatchy has a major presence. Through the first 10 months of this year, the company’s ad revenue fell 14.7 percent in other parts of the country, and 22.5 percent in California and Florida.
McClatchy reported third-quarter income of $4.2 million on $451.6 million in revenue. The company’s stock price, which topped $75 a share in 2005, closed on Friday at $2.20.
UPDATED: Mark Potts has a run-down of other newspapers for sale.
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16 comments:
...Hawk the Herald, Gary saaays
..Hurry 'fore we lose our ess,
...Pay us quick and stop the sliiiiide,
... Maybe I can save my hide.
...Not written by Charles Wesley.
Pruitt's lousy management has driven this once-great newspaper into the dirt, and probably no one will want to pick it up now. They have managed to piss off everyone across all political stands. The local Cuban community has been boycotting the Herald because of its liberal pro-Castro views, but now even Miami's well-heeled liberals are pissed off by the lack of any substantial news in it. Latin American bureaus have been cutback, and its foreign edition once the voice for Central America has been curtailed. It is in a truly horrible condition. But I gather the Herald is just like other MNI properties that have been stripped of experienced staff and now publish silly trend stories and rumors.
Hey, check this out a little more and I think you will find more than the Herald is up for sale for any buyers. MNI is in deep trouble, and now looking for deep pockets to bail it out before it collapses.
It's hard since so many have lost their jobs to feel sorry for anybody else. The employees yes but I cheer for the day that McClatchy management might lose something.
I love it! NY Times has to report news about McClatchy.
Because McClatchy papers are busy writing to first graders they can't help out an 82 year old cancer paitent for $86.00 .
That's nothing. McClatchy employees have to go to McClatchy Watch just to find out what is going on in their own offices.
Isn't that right Part Time Sales Girl?
The problem for McClatchy is this: smart investors won't buy the Miami Herald now, because the value is dropping like a rock and they can get it alot cheaper later on.
I'm not so sure there will be a "later on." Alan Mutter gives the Rocky Mountain News only 90 days to live. Quite a few major metro newspapers won't make it to Thanksgiving '09.
Walter Abbott
Hey Can we have the list of whats for sale at McClatchy again? Let me see....Miami, KC Star. Closed down Modesto. Lost The Star Tribune. Boy, I feel better about long term employment with McClatchy.
That's great that you're keeping people informed, but it's really bad form to copy the entire text of another site's article and paste it on your own blog. Doing that helps eat away at the livelihood of journalists.
6:51 This way you get a truthful report. More than you would ever get from McClachy.
Call The KC Star Reader's Rep. Derek Donovan and complain. Oh, you can't it wasn't published in a McClathcy paper. Too0 Bad! Oh, call him anyway but he probably hasn't caught up with what's going on yet. He still doesn't even know most of the entire Advertising Division is gone. Work being done in India.
Over at Herald Watch:
Via [McClatchy Watch] we learn that the New York Times is reporting that the Miami Herald may be for sale.
http://heraldwatch.blogspot.com/
Don't you find it disgusting that any news concerning McClatchy has to come from some oher source such as Blogs, Tv, any other media except McClatchy. Then the source goes to McClatchy to onfirm the story you alsways get. We don't confirm or talk about____________.
The Miami Herald "Once a respected publication"? Certainly not for the overwhelming majority of Cuban exiles during the last half century. Here's what their racist columnist Jack Kofoed was publishing in 1965
http://www.latinamericanstudies.org/
exile/Kofoed-10-5-65.jpg
and
http://www.latinamericanstudies.org/
exile/Kofoed-11-10-65.jpg
Kofoed's insults against Cuban exiles were continuous for more than a decade until his untimely death.
http://www.latinamericanstudies.org/
exile/Kofoed-1-3-76.jpg
He was supplanted by others like the obnoxious Jim DeFede, who the Cuban dictatorship defended after he was fired for violating journalistic ethical standards. DeFede has not written for another newspaper ever since.
http://www.latinamericanstudies.org/
exile/defede-mafia.htm
The Herald's anti-Cuban exile racism is entrenched in their editorial room with editors like Tom Fiedler
http://www.latinamericanstudies.org/
fiedler.htm
The Herald has also employed self-loathing Cuban Americans like reporter Oscar Corral, who recently took an early retirement package after pleading guilty to soliciting teenage prostitution
http://www.latinamericanstudies.org/
corral.htm
Columnist Ana Veciana Suarez continues working there after being a convicted perjurer and admitted liar
http://www.latinamericanstudies.org/
exile/veciana-perjury.htm
Marifeli Perez-Stable, a member of the Miami Herald's Editorial Board of Contributors, continues collaborating with the paper after being accused by two Cuban intelligence defectors and U.S. counterintelligence officer Chris Simmons of having worked as a salaried spy of the Cuban dictatorship.
http://www.latinamericanstudies.org/
espionage/marifeli.htm
The Miami Herald has stonewalled thoroughly investigating these serious allegations, especially when Perez-Stable has refused to address them.
In consequence, the Miami Herald has lost most of its credibility.
From Broward-Palm Beach New Times:
NY Times: Miami Herald Up For Sale
Sat Dec 06, 2008 at 07:30:53 AM
MIAMI-HERALD-large.jpg
Bidders welcome
The debt-ridden McClatchy Company is trying to unload the Miami Herald, reports the New York Times. So far, it hasn't found any buyers, though.
This is huge news, but its not being reported on the Herald home page (or the Sun-Sentinel's -- though it had a brief in this morning's print edition).
This could get very interesting (and painful). Any buyer would almost surely separate the newspaper from the waterfront property at One Herald Plaza, which would mean a serious shakeout at the newspaper. The positive side: The newspaper would be freed from the sinking ship that is McClatchy.
This could also be the first step in the South Florida superpaper theory. Any buyer might wait in the wings for a similar opportunity to snap up the Sun-Sentinel and/or Palm Beach Post on the cheap, a distinct possibility if the economy doesn't recover in the first half of 2009.
Mostly, it just shows how desperate McClatchy really is. The company bought Knight Ridder for $4.5 billion in 2006, near the climax of the credit bubble. Talk about buying high and selling low. When I reported on the superpaper theory six weeks ago, I asked Herald Publisher Anders Gyllenhaal if he believed his newspaper would be sold soon. "That's not something we're worried about," he told me.
Well, maybe now is the time.
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