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Kansas Liberty: 29 June 2008
Struggling newspaper publisher's bonds 'are deemed deepest in junk territory'
Kansas City Star publisher's stock hits all-time low
Stock in the McClatchy Company, publisher of the Kansas City Star and the Wichita Eagle, plummeted last week along with the rest of the stock market. By the time Wall Street closed on Friday, McClatchy shares were just over $7, having already broken an all-time low.
The company has seen its value shrink rapidly due to a decline in readers and ad revenues. Last week, the two papers lost more than 130 workers after McClatchy announced a round of lay-offs.
McClatchy CEO Gary Pruitt said last week that he didn't know how far the publisher's fortunes might fall. "I can't tell you where the bottom is," he told Reuters.
Pruitt said he expected online revenues to increase even as the company's newspapers continued to stumble, but, he added, web revenues "will not equal print revenue in the foreseeable future."
Meanwhile, trade publication Editor and Publisher reported that the company has broken one other record, too.
"In one of the worst periods for credit downgrades since Moody's Ratings Services began issuing speculative grade level (SGL) ratings in 2002," the magazine reported, "The McClatchy Co. is among the three biggest debtors across all businesses whose bonds are deemed deepest in junk territory, the ratings firm said Tuesday."
The Star publisher is currently $2.39 billion in debt, the magazine reported.
Some conservatives have noted that as the Star's editorials have grown increasingly shrill, the paper has lost thousands of readers. Once, the paper reached more than a quarter-million people in the metro area. Now its circulation is down to just over 150,000. The paper recently announced it was cutting its delivery area, so further circulation declines are expected.
The Eagle's circulation has now fallen below 100,000. Daily circulation is around 89,000 copies.
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