McClatchy Co. may look feeble now, but its chief executive believes the newspaper publisher will emerge from the recession in better shape than most investors believe.
"I like to think of the McClatchy of the future as an athlete: fit and trim, yet muscular where we need to be," Gary Pruitt told the handful of shareholders who showed up Wednesday for the Sacramento-based company's annual meeting. McClatchy directors and executives outnumbered shareholders.
Like many other newspaper publishers, McClatchy has been struggling with a sharp drop in its main source of revenue — advertising.
To cope, the publisher of The Miami Herald, The Sacramento Bee and 28 other daily newspapers has trimmed its work force by one-third, or more than 4,000 jobs, in the past year while shedding other expenses, including the dividend that it had been paying shareholders.
Despite the cuts, analysts have been questioning whether the 152-year-old company will survive. Those doubts have left its stock less expensive than an edition of The Sacramento Bee, on sale for 75 cents in a vending machine a block away from the annual meeting. McClatchy shares dipped a penny to 63 cents Wednesday.
With its shares trading below $1 for the past four months, McClatchy is in danger of losing its listing on the New York Stock Exchange.
McClatchy is being dogged by worries that it might not be able to live up to its financial commitments to lenders — a scenario that could prompt the company to seek bankruptcy protection. That route has been pursued by seven other newspaper publishers since December.
McClatchy has about $2 billion in debt, mostly stemming from its 2006 acquisition of Knight Ridder. Already last fall McClatchy had to negotiate with its lenders for more flexibility, which came at the price of higher interest rates and requirements for more collateral.
Pruitt, though, has steadfastly maintained McClatchy will remain in compliance with the lending requirements, enabling the company to rebound once the economy does. He predicted the company will have a "long and prosperous" future and no one challenged that assertion Wednesday. When offered an opportunity, no shareholders asked Pruitt any questions.
How about some numbers, Gary? No word that Pruitt offered any evidence to base his outlook on. The people who actually study the evidence say MNI's stock value is essentially worthless.
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13 comments:
Since there is no open thread someone please explain why neither this blog or Tony or John Landsberg or the anti-Rhonda blog have written about the Star's hyposcrisy this week.
The Star publishes several paragraphs in Tuesday's actual newspaper about the arrest of a KCTV reporter. The arrest happened Friday night/Saturday morning so actually pretty fast reporting for the Star.
But a columnist gets busted and the former executive editor does not see fit to make sure the same several paragraphs gets written about his wife who he busted out of the paddy wagon? And initially the Star management is not sure it is a story once the news breaks until blogs shame them. And it's a lie to say she was retired then. She was still a columnist on January 2 because a column was expected for the Jan. 4 paper. Her retirement came after her DUI arrest. Not before.
I'm sure McClatchy can become profitable by hawking more Obamababoon merchandise.
Because that's the only way to save the newspaper industry.
"I like to think of the McClatchy of the future as an athlete: fit and trim, yet muscular where we need to be," Gary Pruitt told the handful of shareholders who showed up Wednesday for the Sacramento-based company's annual meeting. McClatchy directors and executives outnumbered shareholders.
Translation:
"I like to think of Xanax as a cure for reality." $2 Billion debt. $50 Million market cap. NYSE delisting.
Life is always easier as an ostrich.
Gary Pruitt is smoking crack.
Good point about the Channel 5 reporter and The Star's hypocrisy.
I think Lokeman is due back in court this month. Surely the Red Star will report the outcome to her drunken driving adventure. Driving on three tires is not easy, and her statement, “When did that happen?” is priceless. What a crock of racist BS she wrote, and the only proper outcome is that she stays retired, IMO.
Pruitt deserves a little something for his chutzpah. I think a shareholder should have thrown a shoe at him. Then, all the journals could have laughed, and written how he doesn't understand the little people. Then they could heap on some hatred with demeaning cartoons. How fun?
The Channel 5 gal and 3 Wheel Lokeman both have the same attorney. Thus far he has worked wonders on Lokeman's case getting a decision that certainly appears to fly in the face of the DUI statutes. But then again, I don't think it costs a bunch for a KCMO judge.
I know some employees at the Sac Bee that fell for this "all is well, the future looks good" crap and invested all their 401ks in MNI stock. They where not the most sophisticated investors and even as the stick fell trusted the Company line BS and lost it all.
They will gain some back by claiming capital losses at tax time.
This sounds like the same speeches that the GM and Chrysler CEOs were spouting about a year or so ago.
It is not possible to invest in McClatchy stock through the 401k. You can certainly buy shares through the employee stock purchase plan, but not one (as far as I know) of the 401k funds owns McClatchy stock. Even if they did it would be blended with lot of other stocks not all McClatchy. So your story of knowing some sac bee employees doesn't hold water.
12:00AM: Your right it was the Employee Stock Purchase Plan. Instead of the 401k they bought stock at a discount every pay period. Still they put all their eggs in that basket and lost it all.
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