Local publishing giant McClatchy files for bankruptcy

The state of play: Just weeks ago, Congress excluded McClatchy from the newspaper pension relief program, which could have prevented the company from having to seek bankruptcy protection.

• Under the current plan, McClatchy would shed 60% of its debt as it tries to reposition itself for a new digital era.
• The company has more than $700 million in debt, The Washington Post reports.
• The bankruptcy filing will not immediately impact the 30 newsrooms currently operating under the McClatchy umbrella, and the company said it secured $50 million in financing to continue operations.

What they're saying: "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," Kevin McClatchy, the company's chairman, said in a statement.

What's next: If the court accepts the bankruptcy plan, the group of new owners would likely be led by hedge fund Chatham Asset Management, McClatchy's largest creditor.

• Our thought bubble, via Axios' Felix Salmon: This looks very much as though Chatham is simply buying McClatchy, while avoiding the need to take on all of the company's debts.

The bottom line: "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," the Post notes.

Go deeper: Local media falls victim to partisan politics