Newspaper publishing giant McClatchy filed for bankruptcy this morning, marking yet another milestone in the declining state of local journalism.
According to The Washington Post, the filing will “allow the Sacramento-based company to keep its 30 newspapers afloat while it reorganizes more than $700 million in debt, 60 percent of which would be eliminated.” Pending court approval, the plan would relinquish control of the nearly two-hundred-year-old publisher to Chatham Asset Management, its largest creditor. Its current operations are being funded by Encina Business Credit Union as bankruptcy proceedings play out.
“McClatchy’s plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders,” Craig Forman, McClatchy’s president and chief executive, said in a news release. “When local media suffers in the face of industry challenges, communities suffer: Polarization grows, civic connections fray and borrowing costs rise for local governments. We are moving with speed and focus to benefit all our stakeholders and our communities.”
McClatchy is not alone in its financial struggles. Twenty percent of all U.S. newspapers have closed since 2004, according to PEN America. The journalism industry has also lost 47 percent of its jobs.