As McClatchy family begins separation from company, it looks to philanthropic support for local news

The McClatchys of Sacramento are separating from the newspaper company they have controlled for 163 years.

The family, however, isn’t completely leaving journalism.

The McClatchy board will be replaced under a new owner, with Kevin McClatchy departing this fall as chairman of the McClatchy Company. The company also announced Chief Executive Craig Forman would leave as McClatchy emerges from its Chapter 11 restructuring under new ownership.

Kevin McClatchy’s exit marks the end of his family’s storied history as the steward of one of America’s most respected newspaper chains.

While a transfer of control has been in the cards for months, their departures and the company’s pending bankruptcy sale to New Jersey hedge fund Chatham Asset Management ends the family’s ownership of the nation’s second-largest local news organization. Kevin McClatchy is a fifth-generation descendant of the company’s founder and one of four cousins on the board of directors.

“The McClatchy family’s time as proprietors spans this nation’s history from the Gold Rush and the Pony Express to the moon landings to the modern mobile internet,” Kevin McClatchy said in a prepared statement. “While it will be humbling to pass the torch, we want to thank our employees, readers, communities and Chatham for recognizing the value of the public-service role of local journalism and supporting its mission.”

Even as ownership changes, the family isn’t giving up on what it views as a public service.

Through the nonprofit James B. McClatchy Foundation, the family has given hundreds of thousands of dollars to organizations such as the Committee to Protect Journalists, a New York-based nonprofit that documents attacks on reporters, and the First Amendment Coalition, the San Rafael organization that works with journalists to pry open government records.

“These last few years, we have these incredible stressors on the newspaper business and democratic processes,” said Susan McClatchy, vice chair of the foundation and widow of James B. McClatchy, a fourth-generation descendant of the founder and a former company board member.

The foundation has recently turned to local journalism issues. It is indirectly funding The Sacramento Bee’s community voices initiative, which improves coverage of overlooked communities, via a fund at the Sacramento Region Community Foundation, as well as a program to expand education coverage at the Fresno Bee. It also has funded Sol Collective, a Sacramento arts nonprofit that’s partnering with The Sacramento Bee to amplify minority voices in the paper.

It has also supported four reporting positions in the Education Lab at The Fresno Bee.

With an eye toward helping English learners, the 27-year-old foundation also makes grants to rural, financially-strapped schools in the Central Valley, the original wellspring of the McClatchys’ newspaper empire.

“The income for the family was from the Valley,” Susan McClatchy said. “The Valley is incredibly important to them.”

Journalism legacy

The company dates back to Feb. 3, 1857, when the first issue of the Daily Bee was published in what is now Old Sacramento. Although McClatchy publishes such newspapers as the Miami Herald and Fort Worth Star-Telegram, its headquarters has remained down the hall from The Sacramento Bee’s newsroom.

The founder, the original James McClatchy, was an Irish-born newspaper correspondent who arrived in Gold Rush-era California in 1849. He was an editor of The Bee’s first edition and became an investor nine years later.

Over time, McClatchy and his descendants would help define the culture and politics of the young city and the entire state.

James McClatchy campaigned against “the giant evil of land monopoly” and other ills confronting Sacramento, and he served as sheriff for a while.

His son, Charles K. (“C.K.”) McClatchy, was a heavyweight at the Capitol, a confidant of Progressive Era Gov. Hiram Johnson, and more than willing to use The Bee’s news coverage to push a variety of causes. Devoted to Sacramento as a “city of trees,” he published front-page “obituaries” about trees that were being sacrificed for development.

“They were boosters, in a time in journalism when that would have been a lot more acceptable,” said Steven Avella, a historian at Marquette University and author of “Charles K. McClatchy and the Golden Era of American Journalism.”

Avella said ceding control to an East Coast investor flies in the face of the family’s history and that early McClatchys such as C.K. were adamant that a newspaper should be locally owned.

“It should sink its roots in the region, and for him the region was the farthest reaches of the Central Valley,” Avella said.

California presence

The family’s imprint on the Valley is considerable, especially in Sacramento. C.K. McClatchy’s daughter Eleanor, who ran the company from the 1930s to the 1960s, helped found the Music Circus theater company and persuaded President John F. Kennedy to re-route I-5 so it spared much of Old Sacramento.

“The city of Sacramento doesn’t have to build a statue to them, they already have a high school,” Avella said. The city’s second-largest high school is named for C.K. McClatchy.

It wasn’t until the 1920s, more than a half century after the first edition of The Bee was published, that the McClatchy organization expanded, first by launching The Fresno Bee and then by purchasing an existing paper in Modesto and renaming it The Modesto Bee.

For a while the company was in the radio and TV business – it founded KOVR-TV in Sacramento – but really started to spread its wings in the 1970s, when it purchased newspapers in Anchorage and Washington state.

The fateful moment in McClatchy history came in 2006.

Gary Pruitt, the second person from outside the family ever to run the company, engineered the purchase of the Knight-Ridder chain, a deal that tripled the size of the company but left McClatchy holding about $3 billion in debt.

The acquisition was completed just as the digital era took off and the newspaper industry went into a free-fall. Fourteen years later, despite earnest efforts to pare down the debt and ramp up the company’s digital operations, the McClatchys are exiting the company that made them a venerated name in American journalism.

“They really have tried,” Susan McClatchy said. “They have been incredible citizens, to try to keep things together.”