New Jersey-based hedge fund Chatham Asset Management placed the winning bid Sunday for the McClatchy media company, a historically family-owned newspaper chain comprised of more than two-dozen major dailies around the country, including the News & Observer. 

McClatchy is the second-largest newspaper chain in the nation. Its publications include flagship paper The Sacramento Bee, major regional newspapers like The Miami Herald and the Kansas City Star, and several North Carolina newspapers, including the News & Observer, the Herald Sun, and the Charlotte Observer. In February, the company filed for bankruptcy, ceding control after 163 years of being family-owned.

McClatchy’s financial troubles date back to its 2006 purchase of rival newspaper chain Knight Ridder, which saddled the company with billions in debt. Since the merger, McClatchy has reduced its workforce by almost eighty percent. 

Alden Global Capital, a company owned by Duke Alum Heath Freeman, also expressed interest in purchasing McClatchy. Alden, which Vanity Fair has described as the “grim reaper of American newspapers,” has maintained a pattern of buying local newspapers and gutting its newsrooms. In 2018, The Denver Post famously instituted a revolt against Alden after the hedge fund whittled the Pulitzer Prize-winning newsroom down to the bone. 

So while the Chatham acquisition may not be the worst scenario, it does mean McClatchy will go from family to financier ownership. Chatham is expected to gain majority ownership and go private in the third quarter of the financial year. 

Chatham owns numerous tabloid glossies, most notably The National Enquirer. The hedge fund also owns the American News Company that, through acquisitions, has come to control about 70% of magazine distribution channels throughout the country. That consolidation means roughly a third of the nation’s newspapers will be controlled by financial institutions, according to the Wall Street Journal. The hedge fund owns roughly $4 billion in assets. 

Chatham issued a statement that the company is “committed to preserving newsroom jobs and independent journalism that serve and inform local communities during this important time.”

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Sarah Edwards is culture editor of the INDY, covering cultural institutions and the arts in the Triangle. She joined the staff in 2019 and assumed her current role in 2020.