Sunday, July 20, 2008

McClatchy to go private?

Newsosaur speculates that privatization of several newspaper companies including the Herald's parent McClatchy is possible. With the price of MNI shares as low as it is what Newsosaur says definitely makes sense.

8 comments:

Anonymous said...

Small thing, but the word "privatization" is typically used when you're taking about a government service or entity that is sold or taken over by a for profit entity or private investors.

And for the record: going private would probably be the best fucking thing for the Herald.

Henry Louis Gomez said...

Thanks for the clarification.

I guess it would depend on who acquires it. I've seen a couple of private turnarounds like the one at Burger King Corp. that have worked quite well. They acquired the company, fixed what was broken and then took it public successfully.

Joseph said...

Consider...
"Imagine what higher-ups at the (Washington) Post must have thought when focus-group participants declared they wouldn't accept a Washington Post subscription even if it were free. The main reason (and I'm not making this up): They didn't like the idea of old newspapers piling up in their houses."

...and...

"The Post experience merely mirrors the results of a September study (.pdf) by the Online Publishers Association, which found that 18- to 34-year-olds are far more apt to log on to the internet (46 percent) than watch TV (35 percent), read a book (7 percent), turn on a radio (3 percent), read a newspaper (also 3 percent) or flip through a magazine (less than 1 percent)."

http://www.wired.com/culture/lifestyle/news/2004/11/65813)

Going "private" in this situation doesn't appear to me to be a solution for an industry which from all appearances is dying.

Henry Louis Gomez said...

The newspaper business is dying. The news business is not. The newspapers need get in the news business.

Henry Louis Gomez said...

Oh and thanks for the interesting links Joseph.

Edy said...

There's no need for putting the word "private" in quotes, going private also means that shares of a company is no longer available for the public to trade freely...and henry louis gomez is right, the time for the newspaper business to change to a news business is here, what a great opportunity for a private firm to change things up.

Anonymous said...

The newspaper business is dying not because of the internet. It is dying because they started giving their product away for free on the internet.
It befuddles me that news, which is expensive to report on, is routinely given away for free.
Why, pray tell, would you buy the cow, if you can get the milk for free?

Henry Louis Gomez said...

Anonymous, I disagree. Newspapers like the Herald were giving away their product well before the internet. I mean do you really think that newspaper you get at a newstand, from a new dispenser box or from a street vendor costs less than 35 cent asking price? Of course not. Newspapers make their money like other "free" media does, through advertising.

The 35 cents is a token that helps slightly subsidize the newspaper. The fact is if the Herald went paperless tomorrow, they would of course lose a lot of their ad revenue which is currently coming from print but they would also lose the vast majority of their cost structure that's invested in paper, ink, presses, truck, etc. associated with the dead tree edition.