Yesterday MarketWatch.com reported :
Standard & Poor's on Friday lowered its corporate credit rating on McClatchy Co. (MNI ) to B+ from BB- on lower revenue. The rating outlook is negative.McClatchy's the parent company of the liberal/leftist Raleigh News & Observer whose biased, racially inflammatory and in significant instances false reporting launched the Duke hoax before the now disbarred prosecutor and N&O anonymous sourse Mike Nifong began speaking publicly about the case.
"The downgrade reflects meaningful declines in revenue and EBITDA in McClatchy's newspaper publishing business and the likelihood for further declines over the intermediate term," said Emile Courtney, an S&P credit analyst, in a statement.
At market close yesterday McClatchy traded at 5.09, down almost 90% since March 2006 when it traded in the mid-40s.
Yesterday's S&P downgrade won't surprise those of you who’ve been following McClatchy’s sharp stock and operating revenue declines which some observers say will force MNI to seek bankruptcy protection before the year’s end.
On the thread of McClatchy stock: then and now are a number of very informative comments. Here are parts of two of them.
Archer 05 share's from news reports:
McClatchy sells its stake in ShopLocal.com at a loss
McClatchy's stake in ShopLocal was valued at $11.13 million--sold to Gannett for $7.875 million.
This sale makes sense if McClatchy decided ShopLocal would not be a profit center.
But if the sale was a desperation move in response to McClatchy's crushing debt, that is a VERY BAD SIGN!
No justice, no peace provides this:
As of 3/31 Ariel Investments LLC owned approximately 18% of the outstanding shares. According to the Ariel semi-annual report their $217,503,439 investment had lost $164,406,829. If they still hold the shares they have lost another $25,000,000.
Yesterday's N&O ran a story which began - - -
A News & Observer subscriber is suing the newspaper for cutting staff and the size of the paper.
Keith Hempstead, a Durham lawyer, filed the suit last month in Wake Superior Court. He says he renewed his subscription in May just before the paper announced on June 16 the layoffs of 70 staff members and cuts in news pages.
The paper, he says, is now not worth what he signed up for and therefore the cuts breached the paper's contract with him.
"Plaintiff alleges fraud in that the newspaper announced changes in the coverage after procuring renewals from Plaintiff and other subscribers," Hempstead says in the complaint.
In a phone interview today, Hempstead, 42, said he could cancel his subscription but filed the suit to make a point.
"I wanted to get the newspaper's attention and the news industry's attention," said Hempstead, who is a former reporter at the Fayetteville Observer, adding that he loves The News & Observer. ...
John Drescher, executive editor of The News & Observer, said he's glad that Hempstead is a loyal reader and that the N&O has meant so much to him.
"We've had some really good papers recently, and they're worth more than the 36 cents a day that Mr. Hempstead is paying us," Drescher said.
"In fact, he owes me money," Drescher continued. "So when he gets a lawyer, he can work with my lawyer and figure out how much he's going to pay me for the excellent coverage he's been getting recently." ...
The entire N&O story is here.
My comments on it:
Drescher certainly sounds upbeat about the N&O. But you have to ask whether he's just engaging in - to put it nicely - a little PR work.
The N&O is covering fewer stories and, while some stories still represent satisfactory journalism, I hear most current and former N&O journalists are saying the overall quality of the paper's reporting is declining almost as fast as staff moral at 215 S. McDowell St.
The suit was first reported on July 2 by Courthouse News Service. On July 3 McClatchy Watch posted in detail on it.
One of those details: Hempstead filed his suit as a class action, something the N&O didn't report.
We can all understand why the N&O wouldn't want its readers to know Hemstead's suit was a class action one.
But readers should have been told anyway.
And why did the N&O wait almost 10 days before it reported the story?
More on McClatchy and the N&O tomorrow.
Hat tips to the commenters mentioned in the post and to AC, Ed in NY, and Locomotive Breath.