McClatchy Company, the owner of the Miami Herald and 28 other daily newspapers in 14 states, announced Sunday that it will be sold to the New Jersey hedge fund Chatham Asset Management following a bankruptcy auction last week.
No terms of the agreement have been made public. The court and regulators must approve the deal before proceeding; a court hearing is scheduled for July 24.
The auction which was “held as a part of its court-supervised sale process has concluded with Chatham Asset Management (“Chatham”) deemed the successful bid,” McClatchy wrote to investors.
McClatchy — which publishes top papers across the country like The Miami Herald, The Kansas City Star, The Charlotte Observer and The Sacramento Bee — filed for Chapter 11 bankruptcy protection in February.
Chatham, which has been an investor since 2009 and is now McClatchy’s largest creditor, also owns The National Enquirer and other supermarket tabloids. It is expected to become the majority owner of McClatchy in 2020’s third quarter and will go private at that time.
McClatchy first ran into financial trouble in 2006, when it bought its rival, Knight Ridder, for $4.5 billion, plus the assumption of $2 billion in debt. At the time, Knight Ridder was the second largest newspaper chain in the United States. For the dozen years that followed, McClatchy’s full-time workforce was cut from 15,000 to about 3,300, with its chairman Kevin S. McClatchy blaming the issue on the company’s inability to meet its pension obligations.
Craig Forman, the McClatchy president and CEO, assured in a statement that the company would continue with its mission to ensure strong news coverage. “Local journalism has never been more vital and we remain steadfast in our commitment to delivering on our mission and continuing to serve our communities,” he wrote.