McClatchy’s problems date back to 2006, when he bought his much larger rival, Knight Ridder, then the second-largest newspaper chain in the United States, for $ 4.5 billion, plus the alleged $ 2 billion debt. millions. From the time shortly after the merger to the end of 2018, McClatchy’s workforce went from more than 15,000 full-time employees to around 3,300, according to public documents. The current bankruptcy plan requires McClatchy to further downsize until 2022.
The Knight Foundation, a journalistic nonprofit organization that originated with the family whose Knight newspapers merged with Ridder Publications to form Knight Ridder, declined to comment for this article. Reported an endowment of more than $ 2.4 billion in 2019.
Chatham Asset Management, the company that could end up being the winner of McClatchy’s auction, is led by Anthony Melchiorre. In addition to taking control of the American Media supermarket tabloid publisher in 2014, Chatham is a major investor in Postmedia, the publisher of Canadian newspapers such as The National Post, The Montreal Gazette, and The Ottawa Citizen.
Melchiorre, a native of the Chicago area, worked on Wall Street at Goldman Sachs and Morgan Stanley, where he managed his junk bond division. He established his hedge fund in Chatham, NJ, in 2002. Chatham often takes on the debts of struggling companies that still have good cash flow. American Media and McClatchy fit that profile.
For more than two years, the hedge fund has been trying to download publications from the US media, including The Enquirer. In 2018, American Media announced the sale of The Enquirer to the family that founded the Hudson News chain of newspaper and magazine stores. That deal has yet to be closed.
Chatham promoted the sale of The Enquirer and other tabloids after American Media was under federal investigation. President David J. Pecker was said to have assisted Donald J. Trump’s presidential candidacy through a deal struck with Karen McDougal, a Playboy model who said he had an affair with Trump. American Media acquired his story for $ 150,000 and never published it, a practice known as catch and kill.
