Woes Continue For Sacramento Bee as McClatchy Sells Building To Reduce Debt, Bolster Cash Position

September 8, 2017 |

In another sign of the struggles of converting to digital media from print, the McClatchy Company (MNI) have sold their corporate headquarters. The facility located in Sacramento's Midtown area at 21st and Q streets also serves as the offices of their flagship publication, the Sacramento Bee.

The sales of the 65-year old structure to Irvine, Calif.-based Shopoff Realty Investments was announced yesterday. The net sales price of the 10.9-acre office and printing facility was $56.5 million with MNI entering a 15-year triple net lease to remain in the offices.

"This property represents another strategic asset acquisition for our firm, which has the potential to provide steady cash flow," Shopoff Realty Investments CEO William Shopoff said in a press release regarding the sale. "With longstanding roots in the neighborhood, we are pleased that McClatchy and The Sacramento Bee have made a commitment to remain in the building and continue providing quality news to local residents."

According to a story by Sacramento Bee reporter Mark Glover, McClatchy will use the proceeds from the sale of this and other properties in their portfolio reduce long-term debt, which currently stands at about $713 million and bolsters cash on hand to $127 million. McClatchy's debt ballooned following the 2006 acquisition of rival media conglomerate Knight Ridder for approximately $4 billion in stock and cash. 

Separately, the company announced its stock would no longer be traded on the New York Stock Exchange, but would now be traded on the smaller American Stock Exchange. In May 2016, with its shares trading around just above $1, which put it at risk of being de-listed from the NYSE, the company instituted a 1 for 10 reverse stock split.

At the time, the share price went from about $1.06 to $10.60. Following the reverse split, the price rose as high as $19.34 in July 2016, but are now trading at $7.78, or a 78¢ pre-reverse price.