Unlike some others, The Bee and its parent company have a good chance of coming through the storm, not as a clipper ship, but, if it retains the courage of its historic convictions, refitted as a sturdy sloop not so different from what it was a century ago. Our democracy can't remain healthy without the professional reporters and editors and the strong voices that try to make order of the information on which an informed citizenry and healthy communities must depend.
Mistakes were made. In trying to show confidence in the future of the industry, McClatchy caught a huge fish called Knight-Ridder at just the wrong time. But it still has the best leadership in the business.
But, wait a minute. Pruitt was the architect of the Knight Ridder deal, a huge disaster of a deal. In terms of timing, the Knight Ridder deal is certainly one of the worst newspaper deals in our generation, since McClatchy doubled down in print media at the exact time print media was heading downhill. Worse, Pruitt's Folly saddled McClatchy with $2 billion in debt, which threatens to sink the entire company and its 30 daily newspapers.
The massive debt has forced the company to lay off nearly 2,500 employees in the past year. Other factors -- advertising migrating to the internet, a declining economy -- contributed, but the heavy debt meant McClatchy had little flexibility and no room for error. Energy and assets are targeted to keep lenders, not subscribers, happy. Profits from the $190 million Miami Herald land transaction won't be used to give employees raises or upgrade equipment or hire talented journalists -- proceeds will be used to pay down corporate debt. The Fort Worth Star-Telegram has put its historic building up for sale, and you can bet the proceeds will be shipped to corporate to pay lenders.
And don't get me started on Pruitt's shady dealings in February, 2007, when he quietly sold 40,400 shares of McClatchy stock, at a cool $38 a share. Today, MNI is trading at just over $1 a share. Commitment to the company? No, not if actions speak louder than words.
Saying Gary Pruitt is one of the best leaders in the business is like saying the captain of the Exxon Valdez was an excellent sailor "except for that one bad day."
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