Chatham Hedge Fund Has the Winning Bid for McClatchy Newspapers

Chatham Hedge Fund Has the Winning Bid for McClatchy Newspapers

Chatham Hedge Fund Has the Winning Bid for McClatchy Newspapers

Chatham Hedge Fund Has the Winning Bid for McClatchy Newspapers

In recent months, Postmedia closed approximately 15 community publications and laid off 120 employees in response to the Covid-19 pandemic, The Toronto Star reported.

Chatham was the favorite in the McClatchy auction, but the New York hedge fund Alden Global Capital expressed strong interest last week, when a lawyer representing the firm said at a bankruptcy hearing that Alden was prepared to “top” any other bid.

Alden controls roughly 200 outlets through its newspaper chain, MediaNews Group. With a strategy that led to deep layoffs at The Denver Post and other publications, it has made money in an ailing business while angering journalists and press advocates who accuse the firm of diminishing local news publications and doing a disservice to the communities they cover.

In the fall, Alden took a 32 percent stake in Tribune Publishing, the owner of The Chicago Tribune and several other major papers. Earlier this month, Alden secured a third seat out of seven on the Tribune Publishing board as it seemed to inch closer to taking control of that company.

The finance industry is also a key component of the largest American newspaper chain, Gannett, which publishes USA Today, The Arizona Republic and 250 other dailies. The new, supersize version of Gannett resulted from a merger last year between Gannett and the parent of GateHouse Media. The deal was partly financed by one private equity fund, Apollo Global Management, and Gannett is now controlled by another private equity fund, Fortress Investment Group, which is owned by the Japanese conglomerate SoftBank.

Journalists employed by McClatchy, as well as the mayors in Lexington, Ky.; Sacramento; and Miami — three cities served by McClatchy papers — pushed for local, civic-minded ownership of the chain.

“Even with the cuts it has endured over the past 15 years, The Bee remains the most significant source of original reporting and enterprise in our community,” Sacramento’s mayor, Darrell Steinberg, wrote in a May letter to the bankruptcy court. “It needs to be bolstered and rebuilt, not milked for whatever profit it can still produce.”


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