As of May 2018, the newspaper segment of the larger U.S. print industry has doubled in probability of bankruptcy risk since the Great Depression. Of the American brands performing well, The New York Times Company is among the best with a strong FRISK® score of "8." Performing the worst is The McClatchy Company out of Sacramento, California with a FRISK® score of "1." This means that there is a 9.99-50% probability of their bankruptcy in the upcoming 12 months.
CreditRiskMonitor’s 96% accurate* FRISK® score is formulated to assess bankruptcy risk in public companies within a 12-month window. The FRISK® score incorporates critical risk indicators including crowdsourced click patterns of credit professionals and other subscribers. The FRISK® score is reported on a scale of "1" to "10," with "1" being the riskiest.
In 2018, some figures have improved while others continue to falter, which ultimately leaves McClatchy in a sustained state of financial distress. At the end of the first quarter of 2018, the company reported $688 million in total debt. Though an improvement, the debt load has made up more than 100% of the capital structure for the last three quarters because shareholder equity has fallen into negative territory. Tangible net worth is still deeply in the red at negative $1.16 billion – worse than it was at the period end Dec. 31, 2017.
The company hasn’t been able to solve its leverage problem or pull itself up from its FRISK® score of "1." As we can see, McClatchy has elevated bankruptcy risk. The New York Times, on the other hand, is a robust brand that has been able to withstand the decline of the newspaper market and strengthen performance by growing with digital subscriptions.
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