McClatchy Co., which owns the Charlotte Observer and several other newspapers in the Carolinas, filed for bankruptcy Thursday morning.
The company says it will continue to run normally as it pursues approval of its restructuring plan under Chapter 11. McClatchy says the filing has “no immediate impact” on employees and the 30 newsrooms it controls across 14 states.
The publishing company says the plan it submitted would allow it to eliminate 60% of its debt as part of a reorganization and also shed much of its pension obligations. If the court accepts the plan, hedge fund Chatham Asset Management would lead a group of new owners and operate McClatchy as a privately held company. It's currently publicly traded.
The Sacramento, California-based company has been under control of the McClatchy family for 163 years.
“McClatchy's plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders," McClatchy President and CEO Craig Forman said Thursday 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."
In addition to the Charlotte Observer, McClatchy also owns the News & Observer in Raleigh and the Herald-Sun in Durham. In South Carolina, it owns The State in Columbia, the Herald in Rock Hill, the Island Packet in Hilton Head, the Beaufort Gazette, and the Sun News of Myrtle Beach.
Last year, McClatchy announced it was cutting Saturday newspapers at its properties. At the Charlotte Observer, that process begins March 7; the paper said it will have “enhanced” Friday and Sunday print editions and instead offer an online-only version on Saturdays.
McClatchy expects fourth-quarter revenues of $183.9 million, down 14% from a year earlier. Its 2019 revenue is anticipated to slide 12.1% from the previous year. The company did say its digital-only subscriptions have increased by nearly 50% year over year.
The McClatchy development is the latest shakeup for a print news industry that’s forced to adapt to a new, digital-focused media landscape.
Last year, New Media/Gatehouse – which had been rapidly buying news properties over the last few years – merged with USA Today parent company Gannett. The new company, which kept the Gannett name, controls several newsrooms in the Carolinas, including the daily papers in Asheville, Fayetteville and Gastonia in North Carolina and Greenville and Spartanburg in South Carolina.