McClatchy Co., America’s second largest local news company, filed for bankruptcy Thursday as part of a strategy to restructure its debts and reposition itself for a more digital future.
If the court accepts their plan, hedge fund Chatham Asset Management LLC would take over and operate McClatchy as a privately held company. Chatham Asset Management also happens to be the principal owner of American Media, the publisher of tabloids including The National Enquirer, the Globe and the National Examiner.
It’s an announcement that hits too close to home. McClatchy owns some of the papers we read every day, such as The (Raleigh) News & Observer, The (Durham) Herald-Sun and The Charlotte Observer.
McClatchy’s filing highlights a larger issue plaguing journalism today: the decline of local news.
Local journalism is dying in plain sight. Over the past 15 years, more than one in five papers in the U.S. has closed, and employment at newspapers dropped by nearly half between 2008 and 2018. Now, according to the Brookings Institute, over 65 million Americans live in counties with only one local newspaper — or none at all.
It’s something that we at The Daily Tar Heel understand more than we’d like to. Many of us are journalism students, and news like this invokes concern about our future post-graduation. Over the past several years, The Daily Tar Heel has been forced to reduce its number of print days, move to a smaller office and operate using less-than-stellar equipment. We value our paper’s independence, but live in constant fear of losing it due to financial struggle.
It’s frustrating that the only viable business model for journalism seems to be investment and ownership by hedge funds and billionaires. Amazon founder Jeff Bezos purchased The Washington Post in 2013, and Mexican billionaire Carlos Slim Helu owns the largest individual stake in The New York Times.
At the same time, the private equity giant Fortress Investment Group manages Gannett, the nation’s largest newspaper chain — owning more than one-sixth of all daily newspapers in the country. Such a media oligopoly threatens the very idea of a free press, as newspapers across America lose their independence to corporate interests.
Yet most Americans have little awareness of the financial challenges facing local newsrooms, according to a 2018 survey from Pew Research Center. A majority of U.S. adults believe their local news media are doing well financially; however, only 14 percent say they have paid for local news themselves in the past year.
