Last February, the McClatchy Company filed for bankruptcy. Under Chapter 11 approval, it would seek a pension restructuring plan for the more than $700 million in debt it has been carrying for years. The news came as some of its local papers struggled to stay afloat.
Chatham Asset Management, the hedge fund that owns the National Enquirer and Canada’s largest newspaper chain, Postmedia, could control all of McClatchy’s mastheads. However, this Friday’s court hearing will focus on whether Chatham Asset and the publisher can finally agree on getting rid of at least 55 percent of their debt to become a new private company.
Director Joshua Benton recalls that the $3.9 billion hedge fund, Chatham Asset, launched a “financial lifeline” to American Media two years before Trump’s presidential promotion and took 80 percent. He says he is worried that the hedge fund will do the same with McClatchy.
The questions that now arise are:
- Who or what will end the crisis in journalism?
- Can companies with a real interest in informing their readers stand firm without the support of a large volume of subscribers — something that newspapers like The NY Times achieved?
- What happens when a shark fund takes over a company with three dozen local titles?
The answers will determine the future of local journalism.