Chatham Asset Management has emerged as the winner of an auction to buy the assets of bankrupt McClatchy Company, the newspaper chain announced on Sunday.
The sale is still subject to the approval of a federal bankruptcy court, but if approved, it would end more than 160 years of family ownership for the national newspaper company.
The sale price was not immediately available, though it is expected to be learned in the coming days through court documents filed with the federal court overseeing McClatchy’s bankruptcy case. In earlier court documents, Chatham had agreed to buy McClatchy for around $30 million in cash and another $300 million in debt credits.
If the sale is approved, the company that owns the Sacramento Bee, the Miami Herald, the Fort Worth Star-Telegram and around two dozen other newspapers would fall under common ownership with other newspapers owned by the hedge fund, including the tabloid National Enquirer.
Final terms of the deal between Chatham Asset Management and McClatchy are expected to be revealed in bankruptcy court on Wednesday.
McClatchy filed for federal bankruptcy protection earlier this year after struggling to pay certain obligations related to employee pensions and other debts. The move came after years of cost-cutting and job reductions following an ill-timed, $6.5 billion purchase of competitor Knight Ridder in 2006.
Since the bankruptcy filing, some of McClatchy’s outlets have sought to continue delivering community-based journalism by launching non-profit hubs within its commercial newsrooms. In recent months, those hubs have solicited donations from the general public to fund a small handful of new reporter and editor positions for specific social-driven coverage areas, including housing and equality issues.
In a statement on Sunday, Chatham Asset Management said it was committed “to preserving newsroom jobs and independent journalism that serve and inform local communities during this important time.”
Chatham Asset Management has been one of McClatchy’s biggest creditors over the last few years, the Wall Street Journal reported. If approved, the sale would bring one-third of all national newspaper ownership under the control of hedge fund groups, the Journal said.
In addition to the National Enquirer, Chatham Asset Management publishes Globe, Us Weekly, OK! and Men’s Journal through its subsidiary American Media, Inc.
