Pruitt: "Too early to tell" if buying KR was right; McClatchy has $2.1B debt

2muchcoffeeman · Sep 22, 2008

http://www.sacbee.com/103/story/1251597.html

Like practically every chain, McClatchy is struggling with a media revolution. Its newspapers, where it still makes most of its money, are losing ground to the Internet, though its combined newspaper-online readership is growing. But because of the insanely competitive nature of the Web, McClatchy's own Web sites can't grow their revenues quickly enough to make up the difference, even as their audiences grow.

To make matter worse, McClatchy is deeply in debt due to its $4 billion takeover of Knight Ridder Inc. in 2006, a deal that Pruitt now describes in much more sobering terms than before.

In an interview last week, Pruitt said it's "too early to tell" whether McClatchy made the right move in buying Knight Ridder. He believes the acquisition will eventually work out, but said the debt load – now $2.1 billion – has put McClatchy in an uncomfortable spot. Investors are nervous. McClatchy's stock has fallen almost 90 percent since the purchase was completed.
Click to expand...

Pruitt said McClatchy has a growth strategy that's actually working – marrying newspapers and the Internet to dominate the audience in each of its local markets. The weak economy, however, has obscured the progress.

"Audiences are growing, our online revenues are growing, (but) it's being masked or overwhelmed by the current conditions," he said.

The economy overtook Pruitt's plans to downsize the company gradually. He had been reducing head count through attrition and voluntary buyouts for a couple of years, and in January he OK'd a five-year plan to cut staffing some more, from 14,000 to about 10,000.

Then the bottom fell out. The rate of decline in advertising doubled. By August, sales were off 16.7 percent for the year. Profitability fell in half. Although Pruitt said McClatchy isn't in any danger of defaulting on its debt, the downturn began eating into its margin for error.

The cost cutting was stepped up.

"It ended up being a five-month plan," Pruitt said.

In June, McClatchy announced it would eliminate 1,400 jobs, many through the company's first-ever mass layoffs. Last week, the ax fell on another 1,150 jobs. Staffing will fall to 10,500 by the end of 2008. McClatchy also imposed a one-year wage freeze.
Click to expand...

More layoffs to come over the next three months --- Merry Fucking Christmas! You don't have a job anymore!

sportschick · Sep 22, 2008

He can go fuck himself. That is all.

Log in or Sign up

Pruitt: "Too early to tell" if buying KR was right; McClatchy has $2.1B debt

2muchcoffeeman Well-Known Member

sportschick Active Member

Share This Page

Log in or Sign up

Pruitt: "Too early to tell" if buying KR was right; McClatchy has $2.1B debt

2muchcoffeeman Well-Known Member

sportschick Active Member

Share This Page

Useful Searches