Brought to you by Dinosaur Media Deathwatch ®The McClatchy Co. announced another round of job cuts Tuesday and said it was slicing its shareholder dividend in half. Sacramento-based McClatchy, parent company of The Fresno Bee and 29 other daily newspapers, said it was cutting its work force by another 10%, or 1,150 full-time positions, as part of an effort to cut expenses by $100 million a year.
The Fresno Bee will lose 40 workers in the McClatchy expense-cutting effort, publisher Ray Steele Jr. announced in a letter to employees Tuesday. Of those, 35 -- including 11 in the newsroom -- accepted buyouts. Five -- including one in the newsroom -- were laid off. The 9% staff cut, following the layoff of 44 workers in June, leaves The Fresno Bee with about 520 employees
McClatchy's announcement followed an earlier spell of layoffs in June that reduced staffing at all of its newspapers by an average of 10%.
The announcement reflects the company's inability to halt a steep slide in profits and revenue. The company said Tuesday that its August revenue fell 15.7% from a year earlier, to $142.8 million. Advertising sales were down 17.8%.
Die, monster, die!
McClatchy officials said the August figures marked something of an improvement over July, when revenue fell 16.4%. "August advertising activity turned out to be stronger than recent months," Chief Financial Officer Pat Talamantes said in a press release. He added that online advertising was "a bright spot," with a 7.4% gain in sales.
With print revenue still dropping, the company said it had to keep cutting costs. Coupled with the June layoffs, a companywide wage freeze and other moves, McClatchy expects to save about $200 million a year in operating expenses, Treasurer Elaine Lintecum said. Cutting the dividend in half, to 9 cents a share, will save the company an additional $7.4 million or so each quarter. That translates into annual savings of $29.6 million.
The move wasn't a surprise; Gary Pruitt, chairman and chief executive, signaled in July that the company was going to re-evaluate its dividend policies. Still, McClatchy had never reduced its dividend in its 20 years as a public company.
Shareholders seemed to accept the news. John Miller of Ariel Investments, a Chicago money-management firm that owns 27% of McClatchy's "public" shares, said it makes sense to plow more money into dealing with the $2 billion in debt left from the 2006 takeover of Knight Ridder Inc.
McClatchy, like other newspaper publishers, has been struggling with a weak economy and the exodus of business to the Internet and other media. McClatchy's troubles are probably worse than most because of its heavy concentration of newspapers in hard-hit California and Florida, where revenues have fallen more than 20% this year.
McClatchy's profits have dropped in half this year and total revenue is down 15%. The company's stock price has dropped 85% in the past 12 months and closed Tuesday at $3.40, up 2 cents, on the New York Stock Exchange.
For all the good dirt on the nakedly pro-insurgent McClatchy gang and their disgraceful coverage of Iraq, including the detestable pissant Bobby Calvan, see McClatchy Watch or search Rantburg for "McClatchy," including this gratifying screed by yours truly.