Hedge Fund Set to Own McClatchy Oversaw Cuts at Canadian Newspapers

Hedge Fund Set to Own McClatchy Oversaw Cuts at Canadian Newspapers

Since Chatham Asset Management took over Postmedia, Canada's largest newspaper chain, 1,600 employees have been laid off and more than 30 papers shut down.

The headquarters of Chatham Asset Management in Chatham, N.J. The hedge fund has become a major player in the news industry.Credit...Ben Solomon for The New York Times

July 16, 2020Updated 7:00 p.m. ET

In October 2016, a New Jersey hedge fund assumed ownership of Canada's largest newspaper chain with very little fanfare. Few people noticed, including some of the chain's employees.

The fund, Chatham Asset Management, acquired two-thirds of Postmedia, the publisher of The National Post, the Vancouver Sun and several other major Canadian papers, by trading a portion of the money it was owed for the majority ownership stake. The deal happened so quietly that Postmedia's own financial news site described it as a debt restructuring in a report that included a single mention of Chatham as "one of the investors.“

Last week, that kind of financial maneuvering reappeared in another major newspaper deal, when Chatham emerged as the winning bidder in a bankruptcy auction for the McClatchy Company, a chain with 30 media outlets including The Miami Herald, The Kansas City Star and The Sacramento Bee. With roots going