Mayor to bankruptcy judge: South Florida benefits if Miami Herald is locally owned

As a decision nears in federal bankruptcy court on the future ownership of the Miami Herald, Miami Mayor Francis Suarez has asked a judge to consider the public interest — and the vital role of local journalism — when weighing the fate of the Herald’s parent company.

The Miami Herald and el Nuevo Herald are among 30 local newsrooms owned by McClatchy, which filed for Chapter 11 bankruptcy protection in February, weighed down by the twin burdens of legacy pension obligations and debt payments associated with the purchase of the Herald’s former owner, Knight Ridder. After months of proceedings, the company expects to receive purchase bids in an auction scheduled for July 8.

“I would strongly urge the bankruptcy court to consider what’s best for our community and Florida when weighing the competing bids for the Miami Herald and the rest of the McClatchy newspapers,” Suarez wrote in a June 20 letter to Judge Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York. “We seek to ensure that the Miami Herald and McClatchy’s other papers emerge from the process with owners who are locally rooted and locally invested in our community, motivated primarily by a desire to serve the broader public interest, not the narrow bottom line.”

The letter was placed in the court file Thursday.

Suarez cited his firsthand experience with the Herald’s accountability journalism and the newsroom’s coverage of the coronavirus pandemic as examples of how “integral it is to keeping the public informed.”

Suarez touted the Herald’s investigative reporting, which is part of what has earned 22 Pulitzer prizes in the Herald’s 117-year history. Its 2018-2019 series “Perversion of Justice,” about financier Jeffrey Epstein’s extraordinarily lenient plea agreement for sex crimes against minors, was cited by federal prosecutors who brought new charges against Epstein in 2019. The Epstein coverage also resulted in Alexander Acosta, then the U.S. labor secretary, to resign over his role in facilitating Epstein’s deal during his time as U.S. attorney for the Southern District of Florida.

Suarez’s appeal echoed efforts by Sacramento Mayor Darrell Steinberg, who pledged earlier this month to convene a virtual conference to help raise local funds to support the Sacramento Bee, another of McClatchy’s 30 newsrooms.

Suarez called on the mayors and leaders in other McClatchy markets to similarly urge that Wiles consider the public interest of each community in making a decision.

“The Miami Herald and its Spanish-language brother, el Nuevo Herald, remain essential to a community that has become the global ‘capital’ of the Americas and beyond,” Suarez wrote.

The original plan under bankruptcy was for New Jersey hedge fund Chatham Asset Management, the company’s largest lender, to assume majority ownership. But as COVID-19 weakened the economy and hampered face-to-face negotiations, the judge approved McClatchy’s request for a second track, opening the door for potential buyers to bid for the company. McClatchy indicated that roughly 20 potential bidders had asked to examine the books, and binding bids are due Wednesday before the potential auction July 8. McClatchy is scheduled to present a buyer and sale plan to Wiles for approval July 24.

While the Herald, like other news organizations, has suffered years of cuts and a steep decline in print circulation, Suarez wrote that “a diverse cohort of young, promising journalists” has helped contribute to record digital readership.

He noted that the Herald, like some other newsrooms across the country, has increasingly turned to philanthropic support to make up for some of the decline in print subscriptions and advertising.

Suarez wrote that these philanthropic organizations “are standing by to work with a new owner to increase that investment.”

The Herald faces “an existential threat” with new ownership looming, Suarez wrote.

“It needs to be bolstered and rebuilt, not stripped and sold for whatever profit it can still produce.”

This story was originally published June 26, 2020 at 12:23 PM.