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McClatchy Completes Acquisition of Knight Ridder

Released 06/27/2006

The McClatchy Company of Sacramento, Calif., announced that it has successfully completed its acquisition of Knight-Ridder, Inc. of San Jose, Calif., following yesterday's approval of the transaction by Knight Ridder's shareholders and receipt of all regulatory approvals. As a result of the acquisition, Knight Ridder common stock will no longer be traded, and shares of Knight Ridder common stock were converted into the right to receive $40.00 in cash and a fixed fraction of .5118 of a Class A McClatchy share. McClatchy will issue approximately 34.9 million new Class A shares to previous Knight Ridder shareholders.

The company also completed the previously announced sales of the Duluth (MN) News Tribune; the Grand Forks (ND) Herald; the Aberdeen (SD) American News; and the Ft. Wayne (IN) News-Sentinel and a 75% interest in the Fort Wayne Joint Operating Agency. Along with the proceeds of these sales, the company borrowed $3.076 billion under a new bank credit facility to pay the cash portion of the purchase price to Knight Ridder shareholders and expenses related to the transaction.

Upon completion of the divestitures of newspapers previously identified, including those completed today, McClatchy will become the nation's second-largest newspaper company measured by daily circulation, publishing 32 daily newspapers with a combined circulation of 3.3 million.

"We are pleased to extend a warm welcome to everyone in our newly enlarged company," said McClatchy's Chairman and CEO Gary Pruitt. "The dedication and talent of every member of the McClatchy team has made this day possible, and we look forward to continuing the legacy of high quality, public service journalism that our readers, employees and shareholders have come to expect."

Background to the Transaction

On March 13, 2006, The McClatchy Company announced a definitive agreement to acquire Knight-Ridder, Inc. At the time, Knight Ridder published 32 daily newspapers in 29 U.S. markets, with a circulation of 3.4 million daily and 4.5 million Sunday, along with a variety of investments in Internet and technology companies.

As part of that announcement, McClatchy said it planned to sell 11 of the acquired newspapers that do not fit with the company's longstanding operating strategies and acquisition criteria, and to sell the St. Paul Pioneer Press due to anticipated antitrust concerns involving McClatchy's Minneapolis Star Tribune.

Upon completion of the divestitures, McClatchy will include 32 daily newspapers and approximately 50 non-dailies. Papers added through this transaction include the Miami Herald, Kansas City Star, Fort Worth Star-Telegram and Charlotte Observer. They will join McClatchy's 12 papers serving cities including Minneapolis, MN; Sacramento, CA; and Raleigh, NC. In addition, McClatchy combined with Knight Ridder has an expanded network of valuable Internet assets.

On April 26, 2006, McClatchy announced a definitive agreement with MediaNews Group, Inc. (MediaNews) and The Hearst Corporation (Hearst) under which the companies will pay McClatchy $1.0 billion in cash to acquire four newspapers. MediaNews will purchase two northern California papers, the San Jose Mercury News and Contra Costa Times, and Hearst will acquire the Monterey (CA) Herald and the St. Paul Pioneer Press in St. Paul, Minnesota.

On May 23, 2006, McClatchy announced a definitive agreement to sell Philadelphia Newspapers, Inc. (PNI) to Philadelphia Media Holdings LLC (PMH) in a transaction valued at $562 million. The purchase covers the Philadelphia Inquirer and Philadelphia Daily News, both daily newspapers, and related media assets including philly.com.

On June 7, 2006, McClatchy announced definitive agreements to sell The News-Sentinel, a 75% stake in the Fort Wayne Joint Operating Agency and certain publications and web sites related to the newspaper to The Nutting Company, Inc.; to sell the Akron Beacon Journal to Sound Publishing Holdings, Inc.; and to sell the Duluth News Tribune and the Grand Forks Herald to Forum Communications Company (Forum Communications). Total proceeds from the five sales were about $450 million.

On June 26, 2006, McClatchy announced a definitive agreement to sell the (Wilkes Barre) Times Leader and certain publications and web sites related to the newspaper to The Wilkes-Barre Publishing Company Inc., a firm newly formed by Richard L. Connor in partnership with local Wilkes-Barre investors and HM Capital Partners, LLC.

In all, McClatchy stands to receive about $2.1 billion from buyers of the 12 papers, a total that represents a multiple of 11 times their trailing 12-month cash flows. McClatchy's acquisition of Knight Ridder represented about 9.5 times cash flow for the company. "These full, fair prices came in very much within our range of expectations, and we are very pleased with the result of the sales," Pruitt said.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

Statements in this press release regarding the transactions between McClatchy and each of Knight Ridder, MediaNews, Hearst, Sound Publishing Holdings, Inc., Philadelphia Media Holdings LLC and The Wilkes-Barre Publishing Company Inc., the expected timetable for completing the remaining transactions, future financial and operating results, benefits and synergies of the transactions, future opportunities for the company and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," estimates and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate the remaining transactions, the ability of McClatchy to successfully integrate Knight Ridder's operations and employees; the ability to realize anticipated synergies and cost savings; and the other factors described in McClatchy's Annual Report on Form 10-K for the year ended December 25, 2005 and the final Prospectus/Proxy Statement/Information Statement contained in McClatchy's Registration Statement on Form S-4 (Registration No. 333-133321). McClatchy disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.