McClatchy May Begin Selling Stock to Public

McClatchy Newspapers, publisher of the Sacramento Bee and one of the nation’s few remaining privately owned newspaper publishers, said Wednesday that it may sell its stock to the public.

If it came to pass, the sale would end 130 years of family ownership at McClatchy, a company with a tradition of liberal editorial pages and investigative reporting. McClatchy, which owns nine newspapers, indicated that the family would still try to retain financial control even if the company makes a public stock offering.

The McClatchy family made the announcement in a letter to employees, which was designed to head off rumors once the company began investigating the possibility of selling stock.

“Until recently,” the letter said, “it seemed to members of the family that private ownership offered the best hope of achieving” the family goal of “preserving our newspaper’s independence and integrity” in the future.

No Decision Yet

“But now, that is no longer so clearly the case.”

Although no decision has been reached, the letter cited as reasons for concern the recent sales of family-owned newspapers in Louisville, Ky.; Detroit, and Des Moines, Iowa, all coincidentally, to giant Gannett Co. of Washington. Each was sold because of feuding among the family heirs.

The letter said the family is considering a structure for a public company similar to those at the Washington Post and New York Times companies, both of which have so-called “two-tier” stock plans that virtually preclude hostile takeovers from outsiders or dissolution of family control by dissident heirs.

The McClatchy letter was signed by President and Editor C. K. McClatchy, fourth-generation manager of the company; his brother and chairman of the board James B. McClatchy, and Assistant Secretary Betty Lou Maloney, the wife of their late first cousin, Brown Maloney.

Avoiding Estate Taxes

The other three shareholders are Brown Maloney’s three children: Brown Maloney Jr., Molly Evangelista and Sue Stiles.

Newspaper analyst John Morton of the brokerage firm of Lynch Jones & Ryan in Washington said newspaper families most commonly seek public ownership to avoid expensive estate taxes or to forestall family tension, but he had not heard word of either in McClatchy’s case.

Although most of the major newspaper companies were once privately owned, today only a handful remain so, including Hearst, Newhouse Newspapers, Scripps-Howard and Cox Enterprises.