What's going to happen to McClatchy?

McClatchy is about the largest newspaper chain in America not either in the hands of vulture capitalists nor race-to-the-bottom grifters like Craphouse. (That's my name for Gatehouse, which is the tail that wags the dog in its merger with Gannett in what is publicly called the "new Gannett.")

That said, it had to file Chapter 11 earlier this year, and as part of that, today is the deadline for bids on what is currently much more than a "carcass."

Yesterday, Ken Doctor offered his take on what might happen. He listed four categories of potential buyers, either for the entire body or for individual newspapers. 

Let’s categorize the likeliest bidders:

• The Insider 
• The Savior 
• The Financial Engineer 
• The Roller-Upper

He then takes a look at each.

"Insider" is Chatham Asset Management, the vulture capitalist who owns a slice, but no more than a slice. (Alden, owner of Dead Fucking Media/Media Snooze, would be another.)

Update, July 6: Those are two of the three bidders, Doctor reports, and also says the third is a non-starter. So, vulture capitalists 1, knights in shining armor 0.

Update 2, July 9: More ugh. McClatchy reports Alden is very interested — interested enough to challenge Chatham's bid and get the auction delayed. Update 3, early July 10: Judge did review the challenge, and has now rejected it. Sale is back on.

Update, July 12: Chatham won the auction and is buying the whole schmeer. It could still part it out, of course.

Update, July 17: This all said, Chatham's post-2016 actions as owner of Postmedia make it look potentially like little more than lesser evilism vs Alden.

"Savior" would be primarily nonprofit ownership. Ken says he's heard rumors that interested buyers would be interested in applying the nonprofit model to the entire beast. I'm skeptical, and will get to that more in a minute.

"Financial Engineer" is a vulture capitalist, but Ken says it's likely NOT one of the companies already bigfooting the newspaper landscape.

"Roller-Upper"? Either CrapHouse or vulture capitalist Alden and head boy Heath Freeman.

Here's a string of Tweets I had on all of this.

McClatchy is a newspaper chain still worth saving from the vulture capitalists. Boy, it would be nice if Ken Doctor's sources are right and some "savior" bought it. 1/x https://t.co/cg1Erys0jo

— Fuck Jesse Ventura and fuck Primo Nutbar 🚩🌻 (@AFCC_Esq) June 30, 2020

That's the lead-in to all of this, of course. And it WOULD be nice. McC has had solid reporting, has a good DC bureau, and there, it often thinks slightly outside the bipartisan foreign policy establishment box.

OK, next?

Nonprofit newspapers aren't ideal, re McClatchy. Here in Texas, the Texas Tribune has pulled punches on issues of importance to some of its sponsors, like when environmentalism runs into O-I-L. (It will deny that, but I've got receipts.)  2/x

— Fuck Jesse Ventura and fuck Primo Nutbar 🚩🌻 (@AFCC_Esq) June 30, 2020

And related:

And, COVID has punched a hole in event money (which has ethics issues and has been abandoned by most profit-based papers and mags), so the idea of ramping up events across a chain like McClatchy certainly wouldn't fly. 3/x

— Fuck Jesse Ventura and fuck Primo Nutbar 🚩🌻 (@AFCC_Esq) June 30, 2020

That's why, contra Ken's sources, (Jon Allsop of CJR also discusses the issue) I really don't see a single buyer for the whole company as a nonprofit organization shop. (I'm not sure I see a single buyer for the whole schmeer, or at least a single non-flipping buyer, but that's another story.)

What I do see as a possible, part 1:

Because of all of that, I think it's unlikely a buyer would emerge to take the entire McClatchy chain nonprofit. I could see its whole set of Cal papers going that way .@mediagazer and .@kdoctor. Too bad it sold Monterey and San Jose. 4/x

— Fuck Jesse Ventura and fuck Primo Nutbar 🚩🌻 (@AFCC_Esq) June 30, 2020

And part 2:

As for the non-Cal McClatchy papers? Miami Herald and the Spanish-language paper could get a community buyer for sure. The rest? Would an Alden finance a Craphouse/New Gannett buy of them just to get a foot in that door? 5/x

— Fuck Jesse Ventura and fuck Primo Nutbar 🚩🌻 (@AFCC_Esq) June 30, 2020

So, there you go.

On the whole group of Cal papers, it's possible that maybe a nonprofit reaches a deal with Alden, as it via Dead Fucking Media is now the owner of Monterey and San Jose. It could be another current newspaper group which could then try making the Cal papers a nonprofit org as a subsidiary of some sort.

We shall see. And, we have now seen.

If Ken's sources are right about Chatham's relative reservoir of goodwill, it's possible they try some sort of spinoff of at least part of the properties. Maybe what I said about the California group going together as a nonprofit org happens. Per the Knight Foundation seriously considering, then deciding not to be, the white knight, and being in Miami, maybe it bites on just taking the Herald.

That said, per Ken, the old Knight-Ridder execs' pension lawsuit could slow everything down a bit. Update: Federal judge has delayed ruling on whether their suit can proceed until he sees the bids. That story, reflecting typically good and honest internal self-reporting, notes that a winner is supposed to be unveiled July 15, IF the company crossed a July 14 threshold allowing a "distressed termination" of its pension plans, not just limited to the old KR execs' pensions.