There are many scenarios for the fate of the local news group, the country’s second-largest. McClatchy’s biggest creditor, the hedge fund Chatham Asset Management, has submitted an offer worth around $300 million, setting a floor for bids. Interest from other prospective buyers for the company, which filed for bankruptcy protection in February, reportedly waned as the pandemic sunk the advertising market. Victory for a financial buyer could raise fears of more job cuts at already-struggling local papers.
• “We’re confident we will have a robust process,” McClatchy’s lead bankruptcy lawyer said.
Who else is in the mix? There are some intriguing possibilities, either in the auction or as part of a post-sale restructuring that could split off specific titles.
• Billionaire benefactors: Mayors of cities with McClatchy papers, like Miami and Sacramento, are pushing for local owners “motivated primarily by a desire to serve the broader public interest, not the narrow bottom line,” as Miami’s mayor, Francis Suarez, put it. That could be easiest for a wealthy person with money to spare and interest in a local media platform (for whatever reason) — think Sheldon Adelson and The Las Vegas Review-Journal, Jeff Bezos and The Washington Post, John Henry and The Boston Globe, or Patrick Soon-Shiong and The Los Angeles Times.
• Nonprofit saviors: Nieman Lab suggests that a “savior” bidder could buy the chain, or some newspapers owned by it, and turn them into nonprofit enterprises. In 2006, McClatchy bought Knight Ridder, the rival chain founded by the family behind the Knight Foundation, which uses its $2.4 billion endowment to support a wide variety of journalistic causes. We’d note that the foundation has shown interest in some of the procedural aspects of McClatchy’s bankruptcy.
The week ahead
⚖️ The U.S. Supreme Court may issue rulings this week on eight cases, including the release of President Trump’s tax returns, birth control in employer-sponsored health care plans and robocalls to cellphones. The court’s extended virtual session has pushed its work into July for the first time in more than 20 years.
🇺🇸🇲🇽 In his first foreign trip as Mexico’s president, Andrés Manuel López Obrador travels to Washington — on a commercial flight — to meet Mr. Trump at the White House on Wednesday. The two plan to celebrate the new North American trade deal, which took effect last week; Prime Minister Justin Trudeau of Canada hasn’t yet decided whether he will attend.
🇬🇧🇨🇦 Speaking of Canada, on Wednesday the finance chiefs of Canada and Britain will discuss the impact of the coronavirus-driven downturn. In Ottawa, Finance Minister Bill Morneau will present the first official post-pandemic projection of Canada’s federal deficit to the country’s Parliament. In London, Britain’s chancellor, Rishi Sunak, will unveil the latest outlook for the British economy, along with potential policy changes to taxes and furlough payments.