Chatham does not have as much of a hold on the news industry as Alden, but it is getting there. In 2016, the fund took a majority stake in Postmedia, one of Canada’s largest newspaper companies. Since that deal went through, 1,600 Postmedia employees have been laid off, and more than 30 of its publications have been shut down.
Chatham is also the principal owner of American Media Inc., the parent company of The National Enquirer and other supermarket tabloids. The fund has tried to unload The Enquirer. In 2018, American Media announced the sale of The Enquirer, which came under federal scrutiny for its role in the 2016 presidential election, to the family that founded Hudson News, a chain of newspaper and magazine shops. That deal has not closed.
By taking over McClatchy, a consistent winner of prestigious journalism awards, Chatham will acquire 31 news outlets in the United States. In addition to the McClatchy flagship paper, The Bee — which was founded in the wake of the California gold rush — the chain includes The Charlotte Observer, The Kansas City Star and the news agency McClatchyDC.
The mayors of several cities with McClatchy dailies, including Sacramento and Lexington, Ky., filed letters with the bankruptcy court urging civic-minded local ownership. Sree Sreenivasan, a professor of digital innovation at Stony Brook University’s School of Journalism, noted with dismay the absence of bidders who were not part of the finance world.
“It’s a sad moment, because that tells you that people who traditionally might have supported local journalism — including people with local connections, local stakeholders — were not there,” Mr. Sreenivasan said.
The completion of the sale would extend the finance industry’s huge sway over local news coverage. The nation’s largest newspaper chain, Gannett, the publisher of USA Today and some 250 other dailies, owes significant debt to one private equity fund, Apollo Global Management, and is controlled by another private equity fund, Fortress Investment Group, which is owned by the Japanese conglomerate SoftBank.
Alden, in addition to its roughly 200 news outlets, has a 32 percent stake in another major chain, Tribune Publishing. It also owns a large stake in Lee Enterprises, which publishes The Buffalo News and roughly 75 other dailies in 26 states.