Sunday, December 07, 2008

Is the Raleigh News & Observer for sale?

A NY Times’ report says Raleigh News & Observer’s parent McClatchy Company:

"… burdened by debt and a steep slide in newspaper advertising, wants to sell one of its most prized properties, The Miami Herald, according to people briefed on the company's plans."
The NYT’s story has some people asking: “What about the Raleigh N&O? Is 'the ol' red rooster' on the block, too?”

The best answer I can give is this:
There’s been no official public announcement the N&O’s for sale.

Neither N&O publisher Orage Quarles nor McClatchy CEO Gary Pruitt has said the paper's for sale.

For the past few years I’ve asked people about McClatchy’s and the N&O’s prospects in the face of declining circulations and ad revenues.

Adding to those declines are McClatchy’s costs servicing its $2 billion in debt, with that debt service made more costly by the “junk” rating of McClatchy’s bonds.

McClatchy’s top executives and senior editors at the N&O profess to be very positive about the company’s and the N&O’s futures.
That said, a fair distillate of what I’ve heard from intelligent people knowledgeable about McClatchy and the N&O is this:
The masthead of just about every American newspaper should include: No reasonable offer refused. But hurry.
McClatchy needs cash now; and lots of it.

A person who wanted to be described only as “just fairly intelligent and with no insider information about McClatchy” said:
"Given McClatchy’s desperate need for money and the declining value of newspapers, you have to believe McClatchy would jump at any offer for the N&O that provided quick cash.

"But that’s true for all McClatchy’s papers. It’s fire sale time in Sacramento."
I think that person makes a lot of sense.

What do you think?

The entire NYT story's here.

Thanks go to each of you who’ve passed on the NYT story and other stories reporting the Miami Herald is for sale


Anonymous said...

Are there any potential investors/buyers in North Carolina who would produce a nonpartisan newspaper and bring some ideological diversity to the left-liberal newsroom? Revenue isn't the N&O's biggest problem.

Anonymous said...

McC is unlikely to unload the N&O. It's still reasonably profitable and they need the cash flow for debt service.

The company is far more likely to dump papers in more economically troubled areas, such as Florida and California that are a bigger drag on the bottom line.

JWM said...

Anon @ 12:15,

There's been some talk of such a paper but at this time, as far as I know, the talk is still very speculative.

One of the biggest problems for anyone thinking of getting into the print newspaper business is its now hard to make a profit and, other things being equal, will likely be even harder down the road.

To Anon @ 9:59,

I agree McClatchy is far more willing "to dump papers in more economically troubled areas."

But its need for cash is great - some would even say desperate - so it may have no choice but to sell any property there's a buyer for, rather then just the ones it wants to unload.

I was reading last evening the Tribune is taking steps that suggest its preparing to declare bankruptcy.

People far more familiar with McClatchy's situation than I say it too may soon have to consider bankruptcy if its not already doing so.

Thank you both for commenting.


Anonymous said...

I'm in the news business.

John's right on every point.

Anonymous said...

John is usually correct. Could a group operate a competitive newspaper as a nonprofit? The liberal St. Petersburg Times is run through the Poynter Foundation. Could a competitor to the N&O be run through a conservative/libertarian think tank or foundation?