They're falling and they can't get up

In case you didn't believe me in the past when I wrote about the real reasons behind the layoffs at newspapers being because of the parent companies being mired in massive debt, here's proof. McClatchy, the paper that owns the Raleigh News & Observer, is desperately trying to get out of millions of dollars of debt that it accrued after buying out Knight-Ridder. It's the companies debt that is forcing the layoffs and closures, not the newspapers themselves. 

From the article: 

McClatchy has implemented several cost-saving measures to try to stay afloat, including cutting its work force by one-third, or more than 4,000 jobs, in the past year while shedding other expenses, including the dividend that it had been paying shareholders.

Experts have worried that the company may still not be able to meet its financial commitments, which could send the publisher into Ch. 11 bankruptcy protection - a method tapped by seven other newspaper publishers since December.

McClatchy's debt comes primarily from its 2006 acquisition of Knight Ridder. The company has already negotiated with lenders for more flexibility, which came at the price of higher interest rates and requirements for more collateral.

In similar news, the Carrboro Citizen is looking to expand operations with a little help from the Town of Carrboro. Also check out the Citizen's take on the situation.