Twilight of the Clods: McClatchy VP Goes Berserk
The McClatchy publishing company is more and more beginning to resemble an isolated bunker in the final stages of Götterdämmerung as ugly reality, such as their 99% stock price plunge, closes in on both fronts. Inside the bunker a leader is screaming madly, conjuring up phantom armies to ward off the unpleasant facts facing his company. However, in this case their ranting leader in the bunker isn't McClatchy CEO Gary Pruitt who is probably already quietly contemplating his permanent exile with his surfboard off the coast of Satellite Beach but Howard Weaver (photo), the outgoing VP of News at that company. So what set off this latest outburst in the closing act of the Twilight of the Clods? According to McClatchy Watch, it was a Web post by Jeff Jarvis at the Buzz Machine commenting on the fiscal woes of the newspaper industry including McClatchy:
McClatchy shares hit 60 cents yesterday. As I write this, it’s up to a big 78 cents. Bubble! Gatehouse hit 4 cents (and I’d still short them given their current attitude); market cap: $2.3 million. See Alan Mutter’s excellent analysis of how debt did in papers. I’d say it’s more than that: It was misplaced optimism in the form and in the incumbents. If these papers had instead taken on debt to innovate and create or to buy innovates (a la the New York Times buying About), that might have been productive. Instead, they bought newspapers, which was only an indication of how snug their blinders were.
And here is how McClatchy Watch characterized the response from the McClatchy VP:
...retiring McClatchy VP Howard Weaver unloaded on Jarvis with a profanity-laced Christmas Day missive. I have to say, the arrogance, anger, and idiocy in Weaver's post are astonishing for a newspaper executive.
Check out Weaver's rant from the McClatchy bunker and I think you will agree with the above characterization of it:
I get so f---ing tired of correcting you, Jeff. Has it *ever* occurred to you to do some reporting — like asking questions of those involved — before pronouncing such apocalyptic conclusions?
It’s perhaps more than interesting that you so frequently refer to blinders; I’ve never read an analyst who is so consistently, persistently wrong about basic facts.
Yes, the stock price sucks. As you know (or should) that reflects Wall Streets’ analysis of our prospects. And we all know those are some smart guys who always get it right, huh? To cite stock price as a definitive measure of performance is as bad a sin as those who ran their companies mainly to maximize stock price.
This much is clear: When McClatchy demonstrates, as it will, that it is coming out of the the downturn/transformation challenge whole, that price will rise again.
Yes, debt is tough to manage when revenues fall. No shit. But I guess you refer to Alan Mutter’s analysis as “excellent” simply because it confirms your beliefs. It’s anything but excellent. It’s very thin soup, persuasive only to people who know less about these issues than he does.
...Your post is entitled “No hope.” Bullshit. McClatchy remains a strongly profitable company (you can look it up at the SEC). It’s never missed a payment and isn’t about to. Lehman Bros failed; GM is failing; even in the same economic climate, McClatchy is not. There is much hope.
Online sales and revenues continue to grow at double-digit rates. Our percentage of revenue from online leads the industry (excluding, perhaps, the national papers) and continues to grow. Perhaps more importantly, the company is so much more efficient now than two years ago (to the tune of some $350 million in reduced expenses) that it doesn’t have to return to anything like historic margins or revenues to be successful.
Yes, Howard, McClatchy is doing so incredibly well. And now I'll adjust your restraining straps and leave the butterfly net in your room for you to play with.
(Photo credit: McClatchy Watch)