All tomorrow’s parties have been canceled
Party poopers: How bad are things at the Sacramento Bee? Pretty grim, according to a Bee source who asked not to be named for fear of reprisal. It seems that every year the newspaper throws a party for employees who’ve faithfully served the company for 25 years. Generally, it’s a pretty lavish affair, held at a posh location such as the Hilton, the Sheraton or the Crocker Art Museum.
But that was before Gary Pruitt, CEO of McClatchy Co., which owns the Bee, bet the family farm on acquiring Knight Ridder last year. The company’s stock has plummeted like a gut-shot goose since then, with no bottom in sight. So this year, Bee management proposed holding the party for its most valued and beloved long-term employees in—get this!—the musty old warehouse used to store all those inserts jammed into the Sunday paper every week. As the anonymous employee put it:
“In the warehouse? What the fuck?”
Death spiral: What the fuck, indeed. While Bites continues to believe that McClatchy is one of the most undervalued stocks on the market, Wall Street begs to differ. As this is being written, McClatchy’s price per share has sunk to $22.57, a precipitous drop of nearly 70 percent from its all time high of $74.80, recorded in March 2005. The plunge began in earnest last summer with the purchase of Knight Ridder and has yet to level off.
For a few brief months after the acquisition, McClatchy was the second largest newspaper chain in the country. Then the tax bill came due, and on Christmas day last year, the company unexpectedly announced it was selling its flagship newspaper, the Minneapolis Star Tribune, to Avista Capital Partners, a financial chop-shop more renowned for liquidating assets than running newspapers. The Star Trib is reportedly on its way to becoming a mere skeleton of its former self.
About the only solace for the now No. 3 McClatchy is that it’s by no means alone. As documented by the Silicon Alley Insider Web site at www.alleyinsider.com, advertising revenue for all daily publications continues to decline as former clients pursue options on the Web. And while many news organizations, including McClatchy, have increased their online focus, it may be a case of too little, too late.
“Every day we read about how amazingly fast newspaper Web sites are growing, how newspaper reporters are now blogging like crazy, how newspaper online revenue is soaring, etc.,” the Insider notes. “And all of this is true. The trouble is—it’s barely making a difference.”
Escape clause: Fortunately for high-profile Bee journalists, the revolving door between government agencies and the reporters who cover them remains well-greased. Even the most pugnacious mainstream reporter knows to pull his or her punches when a future government sinecure is at stake. These well-trained rats know that the best time to abandon the ship is while it’s still tied up to the pier.
Consider former Bee Capitol Bureau journalist Gary Delsohn, who covered Gov. Arnold Schwarzenegger before becoming his chief speechwriter last year. Or Pulitzer Prize-winning water issues reporter Tom Philp, who took a job with the Metropolitan Water District in Los Angeles. Or former voice of the downtrodden Mareva Brown, who now works the other end of the bread line as a flak at the state Department of Developmental Services.
It’s an ugly sport, journalism, in which ethics and scruples play a limited role. There are few winners, but this year, you can count the Bee employees celebrating their 25th year with the company among them. After employees threatened to boycott the warehouse party, Bee management relented. The celebration will now be held at the Hilton in October. Hopefully, it won’t be the last.