Business of News

McClatchy upgrades CEO’s housing stipend to $35K a month amid buyouts

February 5, 2019

BuzzFeed, HuffPo, Gannett, Vice. This has already been a ruthless year for layoffs in digital journalism. On Friday morning, McClatchy President and CEO Craig Forman emailed employees to let them know 450 staffers across the enterprise, all aged 55 and over, would be offered early retirement.

In his email on Friday, Forman attributed this latest reduction in staff to “the culmination of the enormous progress McClatchy has already made in our transition to a digital future,” but the response among reporters didn’t match his optimism. “McClatchy laid off a bunch of folks including me back in 2018,” reporter Christian Boschult tweeted as the news broke. “Hopefully the folks who don’t take buyouts aren’t let go.”

“We hope that offering early voluntary retirement and shifting to a functional organization will create enough savings in operating expenses to avoid layoffs,” says spokesperson Jeanne Segal. “That is our intention.” McClatchy “turned the digital corner,” she says, with online ad sales surpassing 43.8 percent of total ad revenue.

In 2017,  Forman’s take-home pay from McClatchy was $1.7 million, excluding restricted stock. His newest contract with the company, dated January 25, 2019, includes a base pay of $1 million, a bonus of $1 million, and an additional $35,000 monthly stipend. According to Segal, this stipend will be used to pay for Forman’s travel, housing, office, and security expenses. This monthly stipend alone, which is up from $5,000 in his previous contract, could fund several reporters’ salaries every year.

“The CEO’s compensation is set by the board of directors using public consultants and comparable,” Forman tells CJR over the phone.

ICYMI: Headlines editors probably wish they could take back

Sign up for CJR's daily email

When local papers lay off staff, studies show that subscriptions drop and digital views decline, Mary Ellen Klas, capital bureau chief for McClatchy’s Miami Herald, says. Klas, also a Nieman Fellow, is studying the impact of the decline in local news resources.

“I know McClatchy is committed to local journalism,” Klas says, “but when I see them enticing the most experienced people in newsrooms to leave, it’s another bang of this death knell.”

McClatchy owns 30 media properties in 14 states, including the Miami Herald, the Charlotte Observer, and The Kansas City Star. The bulk of McClatchy’s revenue has always come from its print papers, and by shrinking those, the possibility for profitable growth diminishes.

“These decisions about layoffs lead me to question,” Klas says, “What other choices do you have? What sacrifices are others making at the highest parts of the chain? To me local journalism is public service. I don’t think we should expect that anyone profits. Profit is what drives our market economy, I get it, but we’re now in an existential crisis.”

ICYMI: Over the weekend, an obscure site’s explosive scoop dominated headlines

Amanda Darrach is a contributor to CJR and a visiting scholar at the University of St Andrews School of International Relations. Follow her on Twitter @thedarrach.