The final accounting of a financially brutal 2016 for newspaper organizations begins this week with the first earnings reports for the year. But McClatchy jumped ahead of the story Wednesday, unexpectedly replacing CEO Pat Talamantes with board member Craig I. Forman.
Talamantes spent four years leading the company, and before that was McClatchy's chief financial officer for more than a decade. Forman joined McClatchy's board three years ago and has more than 20 years experience as a digital media operating executive and investor.
The contrasting backgrounds pretty much tell the story. The McClatchy board appears to have grown disappointed with revenue declines and operating losses, which worsened in the second half of 2016. At the same time, it wants to move faster on digital transformation of the news and editorial sides of its 29 papers.
Forman said as much in a brief interview with the hometown Sacramento Bee:
We’ve already transitioned in many respects to the foundations of (a) digital future. My goal here is collaborating in accelerating that transformation. ... The thing we have to work on is our pace."
Forman will be on the road this week introducing himself at various McClatchy properties, Elaine Lintecum, vice president of finance and chief financial officer said in an email. He will give a fuller account of where McClatchy is headed in its fourth quarter earnings announcement on Feb. 9.
A plus for Forman is substantial time as a working journalist before turning to management. He joined The Wall Street Journal right after finishing college and law school with stints as a foreign correspondent, bureau chief and later as an executive in Dow Jones' financial information subsidiary before departing for Silicon Valley in 1995.
Jim Friedlich, the first executive director of Philadelphia's nonprofit Institute for Journalism, praised Forman's business and journalism chops in a phone interview.
"He's a very bright, decent, multidimensional guy," said Friedlich, who's known and worked with Forman for more than 30 years. "He has a background of deep journalistic experience and integrity and tremendous digital business acumen. That's the combination needed right now."
Forman's long resume includes work on a pre-Google search engine and Yahoo News in the company's heyday. More recently, he was director of consumer product for Earthlink. He, Friedlich and former Wall Street Journal publisher Gordon Crovitz invested together in a number of digital startups, including Business Insider and Skift. And he worked with Friedlich's media consulting company as a specialist in international ventures and mobile.
During Talamantes' tenure, McClatchy made steady progress on paying down the debt assumed in the 2006 acquisition of Knight Ridder, and the company led several industry collaborations in selling digital. But it racked up a net loss of nearly $40 million in the first nine months of 2016 and was hit as industry print advertising losses grew to 15 to 20 percent in the third quarter.
Media executives I've spoken with say the same level of losses will turn up in fourth quarter reports, driven by the problems of Macy's and other retailers and intense competition for digital ad dollars from Facebook and Google.
First of the public companies reporting will be The New York Times and Lee Enterprises this Thursday.