JOSHUA BENTON@jbenton reports for NiemanLab
It’s been a very public possibility for months, but this morning it became official: McClatchy, America’s second-largest newspaper chain, is filing for bankruptcy. (You can find the legal filings here.)
Here’s The New York Times:
McClatchy, the publisher that operates The Miami Herald, The Sacramento Bee and other newspapers, filed for bankruptcy protection on Thursday, saying it planned to restructure the debt it has struggled with for years.
In a Chapter 11 filing in New York, the company, which is one of the largest news publishers in the United States, said its 30 newsrooms would continue operating as usual during the case.
The Washington Post:
The Chapter 11 filing will allow the Sacramento-based company to keep its 30 newspapers afloat while it reorganizes more than $700 million in debt, 60 percent of which would be eliminated under the plan. If the court approves, it would also hand control of the 163-year-old family publisher to a hedge fund, Chatham Asset Management, its largest creditor.
The filing foreshadows further cost-cutting and retrenchment for one of the biggest players in local journalism at a time when most American newsrooms already are straining to cover their communities. About 20 percent of all U.S. newspapers have closed since 2004, according to a recent report from PEN America, and the sector has shed 47 percent of its jobs.
And McClatchy’s own Sacramento Bee, the newspaper that started the chain in 1857:
The Chapter 11 filing will allow McClatchy to restructure its debts and, it hopes, shed much of its pension obligations. Under a plan outlined in its filing to a federal bankruptcy court, about 60 percent of its debt would be eliminated as the news organization tries to reposition for a digital future.
The likely new owners, if the court accepts the plan, would be led by hedge fund Chatham Asset Management LLC. They would operate McClatchy as a privately held company. More than 7 million shares of both publicly available and protected family-owned stock would be canceled.
“While this is obviously a sad milestone after 163 years of family control, McClatchy remains a strong operating company and committed to essential local news and information,” said Kevin McClatchy, chairman of the company that has carried his family name since the days of the California Gold Rush. “While we tried hard to avoid this step, there’s no question that the scale of our 75-year-old pension plan — with 10 pensioners for every single active employee — is a reflection of another economic era.”
(It’s oddly comforting that the McClatchy story is by far the best and most detailed of the bunch.)
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