McClatchy's pensioners, who have outlived family ownership of the 163-year-old company, are not the only ones standing to lose as it takes Chapter 11 bankruptcy protection.

The changed circumstances experienced by every print publisher apart, historic pension obligations have been the downfall of what is one of the US' largest newsmedia companies, with payments having been missed. Chairman Kevin McClatchy says there are currently ten pensioners for every active employee: "There's no question that the scale of our 75-year-old pension plan is a reflection of another economic era."

Under the plan for Chapter 11 protection filed on Thursday, much of its pension obligations will be shed, an estimated 55 per cent of its debt eliminated and the rest restructured. Hedge fund Chatham Asset Management is likely to lead the consortium of creditors, operating as a private company with US$50 million of new financial backing from Encina Business Credit. Both public shareholders and family owners of 'protected' shares lose out. McClatchy had outstanding debt of more than $703 million at the time of filing, and unfunded pension obligations estimated at more than $805 million (at July 2018).

Meanwhile, it's business as usual - if that is possible - for employees in its 30 newsrooms in 14 states, among them the Miami Herald, Kansas City Star, Charlotte Observer, Fort Worth Star-Telegram and the Sacramento Bee.

The battle to avoid Chapter 11 bankruptcy included intensive negotiations with creditors but a Congress "about-face" - judged to be a political decision ­- excluded McClatchy from newspaper pension relief granted to smaller publishers that would have prevented the company from having to choose among paying bond holders, meeting pension requirements or seeking bankruptcy protection. It is thought Tribune Company had also been in talks about a merger which came to nothing.

At the end of the day, the decision was for a format which McClatchy chief executive Craig Forman says would enable the company "to continue to pursue our strategy of digital transformation and continue to produce strong local journalism essential to the communities we serve" - a mission shared in a statement issued by Chatham.

Time will tell whether this can be achieved.
Peter Coleman

Pictured: James McClatchy, who helped launch The Daily Bee in 1857, makes headlines as the family prepares to lose control