Will The Bee Survive?

TheBackStory

The mayor recommends the following excellent story in the Valley Citizen

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Steve Ringhoff: “Will the Bee Survive”?

Not that long ago, The Modesto Bee arrived  with an audible “thump.” Now, the paper, unwrapped, would simply flutter on down like a large leaf.

Monday last it was 12 pages, Friday it was 18, not counting “Scene.”

We were spoiled. For many years, The Bee was a much bigger and better paper than a city our size deserved. Now, long-time readers wonder if it’s worth the price, even though no one with a phone pays the rack rate.

We got the benefit of being part of the family-owned and operated McClatchy chain, but some bad timing, bad luck and a touch of hubris now has The Modesto Bee tethered to a dying behemoth.

The McClatchy Company is now the second largest chain by circulation in the country, but it is burdened with overwhelming debt and swimming with the Wall Street sharks. Credit default swaps are in play—remember them?

Up Front: This article argues FOR a local NEWSPAPER in Modesto. It could be The Bee, it could be a startup, but it must be a newspaper. It must be something printed, ink on paper, not in some “cloud” somewhere. It must be something vetted, trusted, accountable, and holding others to account in a permanent form. It must be something not easily dismissed or buried in the chaos of the internet. Its form projects its function.

This is not a “get off my lawn” rant of an old guy, even if written by one. This is something of a “chicken little” piece,  that reference  further dating me. The printed edition of The Modesto Bee may be circling the drain, as are some or all of the 30 papers owned by The McClatchy Company.

McClatchy’s latest annual report  (March 7, 2019, SEC 104) detailed about $735,000,000 in long term debt and dramatically decreased print advertising revenues and print circulation. It has unfunded or underfund pension obligations in the tens of millions.

McClatchy is owned, in part, and in debt to, the same family of hedge funds that owns American Media Inc. (AMI), majority owner of the National Enquirer. The manager of the funds, Anthony Melchiorre, and David Pecker, who runs the Enquirer, dine with President Donald J. Trump. Neither is a “plus one” at those dinners.

One Wall Street commentator speculated that the loan made last year by the hedge funds to McClatchy was a “loan to own” and that ultimately McClatchy might be rolled up into an entity with The National Enquirer.

One Wall Street risk commentator gives McClatchy as high as a 50/50 chance of bankruptcy within a year.

Today, the expressed hope for the future existence of McClatchy lies in digital news production. Most, if not all daily newspaper newsrooms across the country—Modesto included—display large video screens detailing for the reporters and editors in real time the stories that are driving the online traffic, getting the most hits.

McClatchy, in its press releases and in its filings with the Security and Exchange Commission talks about transforming or transitioning to a digital format.

From a business perspective it makes sense. Your reporters gather the news and there are no production or distribution expenses.  The problem arises when the print edition disappears or becomes what is being called a “ghost paper.”

The long term question is whether the digital revenue will sustain a robust news gathering force.

This is not intended to disparage the newsroom crew of Editor Brian Clark at The Bee. Those guys are paddling as fast as they can but their parent boat is shipping water. Their staff numbers are diminished; their editing functions “outsourced,” and their focus is being pushed to the digital, “online edition.”

The Bee’s newsroom staff is a shadow of what it was before a combination of factors sparked the first round of cutbacks, layoffs, consolidations and golden handshakes like the one given just recently to Mike Dunbar, the longtime editorial page editor. It follows similar handshakes given in the recent past to Ron Agostini, Nan Austin and columnist Jeff Jardine. Eons of institutional memory vanished with their departures. If we are generous with the count, the current newsroom staff is a few less than 20. It once was 80, with half again as many part-times, stringers, etc.

We will come back to the present in a bit.

McClatchy family ownership of a newspaper dates back to before 1884 with the Sacramento Bee. In 1922 McClatchy launched the Fresno Bee. In 1927 McClatchy bought the News-Herald in Modesto and six years later renamed it The Modesto Bee.