Economy

Wichita Eagle parent company files for bankruptcy

Wichita Eagle parent company files for bankruptcy”

The so-called "managed bankruptcy", Franklin said, gives McClatchy a chance to keep the lights on and significantly reduce its debt load brought on by pension payments promised in the days of yore, as newspapers are left competing for digital ad dollars primarily soaked up by social and search.

McClatchy, the publisher of the Miami Herald, The Kansas City Star and dozens of other newspapers, has filed for bankruptcy protection as it struggles to pay off debt while revenue shrinks because more readers and advertisers are going online.

"McClatchy's plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders", said Craig Forman, president and CEO.

McClatchy owns 30 newsrooms in 14 states.

McClatchy, the second-largest newspaper group in the United States, is filing for bankruptcy.

The company, which oversees 30 local newsrooms, will continue to operate as usual while the company restructures under Chapter 11 bankruptcy protection, the Associated Press reported.

The plan would be led by hedge fund Chatham Asset Management LLC if the court accepts the filing.

While some national newspapers, like The Wall Street Journal and The New York Times, are adding digital subscribers, helping them navigate advertising declines, many local outlets have had a hard time.

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"As a result of the transaction, the Debtors went from owing a little over $344,000,000 of secured debt to over $670,000,000 of secured debt", the PBGC filing said, adding that the move put repaying Chatham ahead of McClatchy's pension obligations.

Dan Kennedy, a journalism professor at Northeastern University who follows the sector, said McClatchy's woes follow "the narrative that we've seen with corporate chain ownership" by accumulating debt that kept it from investing in future technologies.

McClatchy's spokeswoman said the company had no comment. Its 2019 revenue is anticipated to slide 12.1% from the previous year.

Last year, New York Times executive editor Dean Baquet bleakly predicted the demise of "most local newspapers in America" within five years, except for ones bought by billionaires.

McClatchy was founded in Sacramento in 1857 during the California gold rush and the namesake McClatchy family has had a continuous ownership role since then.

As well as the Herald's expose about Epstein's pedophile ring, McClatchy reporters have broken several big stories in recent years, including a share in the 2017 Pulitzer Prize for exposing the Panama Papers scandal.

Under the Chapter 11 plan, the company said first-lien debt holders holding $218 million in debt will be exchanged for new, first-lien notes of a substantially reduced principal with a 10 percent interest rate.



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