They Asked For It
McClatchy family deserves nothing from you
By R.E. Graswich
Media turned weepy in February when the McClatchy Company declared bankruptcy and ended the family’s 163-year run as the ultimate Sacramento newspaper dynasty. The tears were not deserved.
No family made a deeper, longer impact on the city. And no family did more existential harm—using its monopoly to squeeze dollars from local businesses while wrecking labor unions, financing colonial expansions in far-flung markets, minimizing its Sacramento imprint and gutting a vital California media institution. A hedge fund is taking over. It will euthanize the Bee and other McClatchy papers.
The family’s destruction of the Bee leaves Sacramento without a daily journalistic powerhouse to protect readers and question politicians. Obese with inherited wealth and anesthetized by profit, the McClatchy family became impotent decades ago. It squandered a legacy of community service and two-fisted journalism in Sacramento. Bankruptcy is a multi-generational, self-inflicted outcome.
I worked 35 years for The Sacramento Bee, the McClatchy flagship. When I started, the company was still overseen by Eleanor McClatchy and her nephew C.K. From the start, I was indoctrinated with stories about the family’s foresight and generosity—support for local arts, the creation of SMUD, the expansion of UC Davis.
Eleanor sat beside me in the Bee’s third-floor cafeteria at 21st and Q streets. C.K. pedaled his bicycle to work. They were “Sacramento Proud” before pride became a cliché.
That’s ancient history. By the late 1970s, the beneficence was a façade. Eleanor faded away. C.K. spent more time in San Francisco. The family—known for paying top industry wages—revealed its new priorities by forcing a strike in 1978. The goal was to drive out composing-room workers, modernize and cheapen production. Many people lost their jobs.
Ten years later, McClatchy became a publicly traded company. The family maintained control with a dual-class stock scheme that left ordinary stockholders powerless. Profit and expansion were obsessions. The Bee racked up annual profits of 40 percent, driven by extortive ad rates. Local merchants had no alternatives. They had to pay.
The family—now the McClatchy Company—returned almost nothing to Sacramento beyond marketing slogans and a Christmas campaign to help needy folks. The campaign was painless for stockholders. Readers paid with donations.
The McClatchy arrogance peaked as the internet began to prove its ability to transmit news and information. The family fumbled, unable to respond in a sustained, creative, dynamic way.
At a Bee employee meeting around 2002, I asked senior management about Craigslist, which was expanding with free online classified ads. “What percentage of our profit comes from classified?” I asked. The response was “about 48 percent.” Feeling the floor disappear, I asked, “How do we compete with free?” The answer: We’re the Bee. Craigslist isn’t our competition. Within four years, classified profits were gone. Reporters were being laid off.
Around 2004, I asked a senior executive why we didn’t digitize and index our stories from 1857 onward and market a searchable Sacramento website. The answer: We thought about that, but it would cost $250,000. Too expensive. Meantime, bonuses for McClatchy executives were $250,000 at the low end.
One day in 2006, 10 months before I quit, McClatchy CEO Gary Pruitt told me the company was buying the Knight Ridder newspaper chain. Pruitt was pleased with himself. I asked if he was worried that nobody else wanted Knight Ridder. He said no, the deal would make McClatchy one of the most powerful newspaper companies in the country.
McClatchy paid $6.5 billion. The debt broke the company. Pruitt faced zero accountability. The family gave him $3.6 million when he quit in 2012, including $3.1 million in deferred compensation.
Today, the family is trying to abandon its pension obligations—no surprise. When I joined the Bee, the family owned newspapers in Sacramento, Modesto and Fresno, and TV and radio stations in the Central Valley and Reno. Jobs at the Bee were for life. Pensions were golden.
Things should have turned out better. The family could have embraced online search and social media. But search tools were expensive and mysterious. And social media was troublesome, giving readers an independent voice. The company bought more newspapers.
Erasing the McClatchy name from Sacramento won’t repair the family’s mistakes. But why should Sacramento honor a dynasty that stopped caring a half-century ago?
R.E. Graswich can be reached at firstname.lastname@example.org. Follow us on Facebook, Twitter and Instagram: @insidesacramento.