The Sacarmento Bee is one of the many local newspapers owned and operated by McClatchy. Photo: Justin Sullivan/Getty Images

McClatchy announced Thursday that it voluntarily filed for bankruptcy to allow the company to restructure its debt and pension obligations.

Why it matters: The bankruptcy ends family control of one of the largest newspaper publishers in the country. It will also hand the company to creditors, who "have expressed support for independent journalism," McClatchy DC writes.

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.

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