McClatchy, the second largest chain of local newspapers in the United States, filed for bankruptcy Thursday.
The company has struggled in recent years to meet pension demands, including $124 million in pension funding due in 2020. In November, McClatchy asked its creditors to restructure its debt, marked down the value of its chain of newspapers by nearly $300 million and reported a 12.4% decrease in revenue compared to the previous year.
The Chapter 11 filing will let McClatchy eliminate some pension obligations. In a post on McClatchy’s DC bureau site, chairman Kevin McClatchy said the company’s 75-year-old pension plan includes “10 pensioners for every single active employee.” The plan submitted to a federal bankruptcy court removes about 60% of its total debt.
If the courts approve the plan, this move will end 163 years of McClatchy family control of the company and hand ownership to hedge fund Chatham Asset Management LLC.
Here’s more context from Rick Edmonds, Poynter’s media business analyst.
More from Poynter
Jan. 2, 2020: McClatchy stiffs retired executives on a scheduled pension payment
Nov. 16, 2019: McClatchy stock crashed Friday after company warned of pension funding crisis
Nov. 13, 2019: McClatchy’s financial distress has the company exploring options — including a sale
June 5, 2019: McClatchy’s painless new weekend experiment
Feb. 1, 2019: McClatchy offers buyouts to 10 percent of staff
Ren LaForme is Poynter’s digital tools reporter. He can be reached at email@example.com or on Twitter at @itsren.