McClatchy

Draconian hedge fund makes move to purchase McClatchy

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Putting the Raleigh N&O and Char-O in a precarious position:

The refinancing of the company made Chatham — the principal owner of American Media Inc., the publisher of the National Enquirer supermarket tabloid — the largest debt holder in McClatchy.

Enter Alden Global Capital, a New York hedge fund that has become a major force in the newspaper business. In a surprise move on Wednesday, Alden filed an emergency motion in a U.S. Bankruptcy Court asking Judge Michael E. Wiles to stop Chatham from attempting to buy McClatchy through a credit bid, a transaction that would allow it to put the company debt it had assumed toward the purchase price.

Full disclosure: I don't know diddly about how bankruptcy courts operate, and I hope I never become learned on the subject. But I also believe in "learning from the mistakes of others," and Alden should be the last company allowed to control NC's flagship newspapers:

Does Gannett merger signal the death of local journalism?

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Being a little fish in a big pond usually means you get eaten:

The deal would combine the country’s two largest newspaper chains, with more than 260 daily papers, and hundreds more websites and community and weekly papers in 47 states. The new company, to be called Gannett even though New Media is the acquirer, would have a daily print circulation of 8.7 million, dwarfing the next largest chain, McClatchy, with daily circulation of 1.7 million. McClatchy owns The News & Observer of Raleigh and The Charlotte Observer.

The companies say the advantages of size and reach will attract more digital advertisers and save expenses by eliminating operations deemed redundant or expendable, helping to offset a two-decade slide in revenue from print advertising and subscriptions, which has imperiled the industry.

Bolding mine, because I'm pretty sure that's the exact same wording Berkshire Hathaway used just before cutting the Greensboro News & Record staff down to a skeleton crew. Admittedly, it's real easy for people like me to grouse about the erosion of investigative journalism, since I don't have to solve the financial problems that brought this about. But I am currently subscribing (paying) for 4 different news outlets, so I'm kinda doing my part. Needless to say, the journalists' unions are not happy about this:

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