Anchorage Daily News managers on Tuesday announced their intention to eliminate the jobs of a handful of journalists as McClatchy Co., a California-based newspaper chain, continued its strategy of maintaining profit margins by cutting costs. Over the past two years, dozens at the newspaper have been laid off, taken buyouts or left on their own, as what was once Alaska's only statewide newspaper has retreated back to the 49th state's largest city. Insiders say Daily News circulation, down from more than 70,000 to near 50,000 papers a day, is continuing to decline, while cuts in news staff have hampered efforts to take the publication online in a big way. The paper's Juneau bureau has been vacant since the end of the legislative session last year. The paper's staff has been told the Alaska Legislature will be covered this year by a rotation of reporters visiting from Anchorage.
The names of the journalists expected to leave the Daily News in the latest round of cuts are not clear at this time; however, sources say some of the paper's most experienced senior staff are likely to leave.
The Daily News has offered no public outline of the cutbacks. On Tuesday, editor Pat Dougherty posted on his blog the news that Morris Publishing Group, owner of Alaska Magazine and several Alaska newspapers, is now seeking bankruptcy protection, yet made no mention of the cutbacks coming at his own publication.
The Daily News' parent company, McClatchy Co., has trumpeted its ability to maintain profits by cutting costs, especially in newsrooms, at all of its 30 daily newspapers, from Miami to Anchorage. "Profits from McClatchy's continuing operations more than doubled year-on-year from $19 million to $42 million," The Guardian reported in July. McClatchy CEO Gary Pruitt last month reported that advertising revenue at the company's newspapers are "finally, finally, improving," and that all of the chain's newspapers are profitable. Still, new layoffs are coming this month not only in Anchorage but at McClatchy operations elsewhere. Fitch Ratings, a market analyst, on Tuesday praised McClatchy's cost cutting measures, but noted the "belief that McClatchy has an untenable capital structure relative to the prospects for its future cash flow generation. Fitch has believed that absent a refinancing or equity issuance, a default of some sort would be inevitable."
The company remains more than $1 billion in debt from the purchase of the Knight-Ridder newspaper chain in 2006. Some analysts speculate McClatchy could at some point join Morris in bankruptcy court.