Image by djdau via FlickrThe McClatchy Co., will release second quarter earnings results in a conference call tomorrow, as some analysts speculate the media conglomerate may be embarking on a new chapter--Chapter 11.
The bankruptcy card, already played by the Tribune Co., is one option facing McClatchy, which continues to suffer from declining ad revenues in the down economy. Darkening the bleak picture is the more than $2 billion in debt the Sacramento, Calif.-based company is carrying, largely from its 2006 acquisition of Knight-Ridder. Bondholders recently eschewed efforts by the company to restructure its obligations to reduce its debt by $900 million, with only 9 percent of the bondholders willing to go along.
McClatchy owns 50 daily newspapers, including The Miami Herald, The (Columbia, SC) State, The Anchorage Daily News, and The Sacramento Bee, along with weekly newspapers and a 15 percent stake in Careerbuilder, among its holdings. Ad revenues sank 30 percent in the first quarter and were down 18 percent for all of 2008. McClatchy stock (MNI) is trading at 50 cents a share today.