It’s been a hell of a week for Sacramento-based McClatchy Co. The Bee’s parent was battered by a steady barrage of bad news, which began April 25 with the announcement that its first-quarter profit had dropped by 67 percent and ended with the downgrading of its debt holdings to junk-bond status by Standard & Poor’s Ratings Services on April 27. Wall Street investors responded by dragging McClatchy’s stock price below the crucial $30-per-share threshold. Since brushing against the $75-per-share level two years ago, the stock has plummeted 60 percent.
McClatchy is by no means the only daily newspaper chain facing troubles. According to industry sources, overall daily circulation, which has steadily declined for nearly two decades, dropped another 2.5 percent during the past six months. Ad revenue similarly has declined. McClatchy, once insulated from the industry’s ills, has seen its fortune evaporate in the wake of last year’s purchase of Knight Ridder newspapers. Nevertheless, the company’s board of directors rewarded CEO Gary Pruitt with $5.6 million in compensation last year, according to a recent SEC filing.