Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
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.