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McClatchy Reports First Quarter 2007 Earnings

Released 04/24/2007

The McClatchy Company (NYSE: MNI) today reported first quarter 2007 earnings from continuing operations of $14.5 million, or 18 cents per share, compared to earnings from continuing operations of $21.8 million, or 46 cents per share, in the first quarter of 2006.

A loss from discontinued operations of $5.5 million, or 7 cents per share, reflects the results of the (Minneapolis) Star Tribune newspaper which was sold on March 5, 2007. The company's total net income for the 2007 quarter was $9.0 million, or 11 cents per share, compared to total net income of $27.7 million, or 59 cents per share, in the 2006 first quarter. As a result of the acquisition of Knight Ridder on June 27, 2006 (the "Acquisition"), the company issued 35.0 million Class A shares which negatively impacted earnings per share for the 2007 quarter.

Revenues from continuing operations in the first quarter of 2007 were $566.6 million, compared to revenues from continuing operations of $194.5 million in 2006. The increase in revenues reflects the addition of 20 newspapers acquired in the Acquisition. On a pro forma basis, including all newspapers as if they had been owned since the beginning of 2006, revenues from continuing operations were down 5.0% from 2006 pro forma first quarter revenues of $596.3 million. Advertising revenues were $477.0 million, down 5.3% from pro forma advertising in 2006, and circulation revenues were $71.9 million, down 3.6% on a pro forma basis.

The company benefited from strong cost reduction efforts in the 2007 quarter. Cash expenses were down 6.3% as the result of synergies realized from the Acquisition, reduction in staffing levels and lower newsprint expense. Operating cash flow was up slightly on a pro forma basis.

Earnings from continuing operations included a loss from its investments in unconsolidated companies of $9.7 million, compared to income in the first quarter of 2006 (prior to the Acquisition) of $0.4 million. This loss was due to the operating results of its newsprint investments and to seasonally low profitability at CareerBuilder, Classified Ventures and the Seattle Times Company.

Interest expense from continuing operations for the first quarter of 2007 includes $5.7 million related to $530 million in debt repaid from the proceeds of the sale of the Star Tribune on March 5, 2007. However, the operations of the Star Tribune were included in discontinued operations during the first two months of 2007.

The company's first quarter 2007 loss from discontinued operations, reflects a better result than it had previously expected. As foreshadowed in its 2006 Form 10-K Annual Report, McClatchy recorded tax expense of approximately $40 million in the first quarter of 2007 caused by the sale of Star Tribune-related intellectual property from the company's intellectual property subsidiary when the transaction closed. However, this income tax expense was offset by an additional $41 million income tax benefit from updated estimates of the company's tax basis in the Star Tribune. Based upon these revised estimates, the company expects the 2008 tax refund to be an estimated $201 million rather than its original estimate of $160 million. Therefore, the company expects to realize approximately $731 million in after- tax proceeds from the sale of the Star Tribune, instead of $690 million.

Commenting on first quarter results, Gary Pruitt, chairman and chief executive officer, said, "In the first quarter of 2007 we faced the toughest advertising climate we have seen in a number of years. In particular, real estate and automotive advertising were hurt by the continuing declines in sales of both homes and domestic vehicles. Internet revenues were up 5.4%, as our online employment revenues are being affected by the revised CareerBuilder affiliate agreement. However, we continue to see strong growth in other online advertising categories. Excluding online employment advertising, our online advertising revenues grew 17.0% in the quarter.

"We continued to focus on cost controls to help offset the impact of the revenue challenges and reduced cash operating expenses by 6.3% on a pro forma basis in the quarter. As a result, our operating cash flow grew slightly on a pro forma basis. Few newspaper operations can make that claim.

"As we look to the second quarter, we expect continued declines in real estate advertising, particularly in the California and Florida newspapers, and do not see a significant rebound as yet in the other classified advertising categories. So we expect second quarter advertising results to be similar to the first quarter.

"While we are continuing to look for additional ways to reduce costs, we are delivering on the Knight Ridder synergies. We will continue to reduce staffing levels through attrition and see continued relief in newsprint pricing as the year unfolds. We are scrutinizing all other areas of expense for opportunities.

"The cyclical downturn in all three major classified categories is exacerbating the impact of structural shifts affecting newspapers. However, we believe our strategic moves in acquiring Knight Ridder and selling the Star Tribune have both helped us in this difficult time and made us an even stronger competitor. For instance, our operating cash flows in the first eight months after the Acquisition would have been down 16.3% had we not done the Acquisition or sold the Star Tribune. Had we acquired the Knight Ridder newspapers, but not sold the Star Tribune, our operating cash flows would have declined 5.2% on a pro forma basis. But by making the Acquisition, and all of the divestitures to realign our portfolio as we have, our operating cash flows were essentially flat-down 0.3% on a pro forma basis. So our performance was much better for having acquired Knight Ridder and selling the 13 papers. With our portfolio of newspapers and digital assets in growth markets, new alliances with technology companies, and changes we are making in our cost structure, we approach the future with optimism.

"On April 16, we announced that we had joined an important alliance with Yahoo! and 11 other newspaper companies. This partnership presents opportunities for McClatchy and other newspaper companies to grow online by boosting traffic, bolstering search efforts and creating a state-of-the-art online ad network. We examined many alternatives in determining that this represents the right deal, with the right partners, at the right time. The partnership has emerged as the newspaper industry's preferred solution, and as more companies join, we expect that gravitational pull will become even stronger."

The company's pro forma statistical report, which summarizes revenue performance for March and the first fiscal quarter of 2007, follows. This report includes advertising revenues for the 20 Knight Ridder newspapers the company acquired, but did not own in the first half of its fiscal 2006, and excludes the revenues of the Star Tribune newspaper. The pro forma information is meant to provide investors a sense of what the advertising results of the continuing operations would have been in each interim period.

A reconciliation of operating expenses, operating cash flow (as defined) and operating income to pro forma amounts are posted on the company's website for the first three quarters of 2006. A reconciliation of the operating cash flow and operating income for the eight months ended March 4, 2007 and February 26, 2006 to pro forma amounts are also posted.

At noon Eastern time today, McClatchy will review its results in a conference call (877-278-1205 pass code 3510894) and webcast (http://www.mcclatchy.com). The webcast will be archived at McClatchy's website.

The McClatchy Company is the third largest newspaper company in the United States, with 31 daily newspapers and approximately 50 non-dailies. McClatchy- owned newspapers include The Miami Herald, The Sacramento Bee, the (Fort Worth) Star-Telegram, The Kansas City Star, The Charlotte Observer, and The (Raleigh) News & Observer. In addition, McClatchy has a robust network of internet assets, including leading local websites in each of its daily newspaper markets, offering users information, comprehensive news, advertising, e-commerce and other services. The company also owns and operates McClatchy Interactive, an interactive operation that provides websites with content, publishing tools and software development; Real Cities (http://www.RealCities.com), the largest national advertising network of local news websites and 15.0% of CareerBuilder, the nation's largest online job site. McClatchy also owns 25.6% of Classified Ventures, a newspaper industry partnership that offers classified websites such as cars.com and apartments.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI.

ADDITIONAL INFORMATION Statements in this press release regarding future financial and operating results, 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. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ. These risks and uncertainties include national and local economic conditions that could affect advertising and circulation rates and volumes, changes in interest rates and/or newsprint prices, increased competition in our markets, the impact of any litigation or potential litigation, as well as the other risks detailed from time to time in the Company's publicly filed documents, including the Company's Annual Report on Form 10-K for the year ended December 31, 2006, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any intention and assumes no obligation to update the forward-looking information contained in this release.

                            THE McCLATCHY COMPANY
                 CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                   (In thousands, except per share amounts)

Three Months Ended

April 1, March 26, 2007 2006 REVENUES - NET: Advertising $477,023 $166,334 Circulation 71,880 23,764 Other 17,655 4,365 566,558 194,463 OPERATING EXPENSES: Compensation 236,324 85,739 Newsprint and supplements 75,417 26,264 Depreciation and amortization 37,833 9,887 Other operating expenses 129,596 37,294 479,170 159,184

OPERATING INCOME 87,388 35,279

NON-OPERATING (EXPENSES) INCOME: Interest expense (53,785) - Interest income 64 13 Equity income(losses) in unconsolidated companies, net (9,749) 396 Other - net (48) (7) (63,518) 402 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION 23,870 35,681

INCOME TAX PROVISION 9,357 13,900

INCOME FROM CONTINUING OPERATIONS 14,513 21,781

INCOME (LOSS) FROM DISCONTINUED OPERATIONS - NET OF INCOME TAXES (5,483) 5,946

NET INCOME $9,030 $27,727

NET INCOME PER COMMON SHARE: Basic: Income from continuing operations $0.18 $0.46 Income (loss) from discontinued operations (0.07) 0.13 Net income per share $0.11 $0.59

Diluted: Income from continuing operations $0.18 $0.46 Income (loss) from discontinued operations (0.07) 0.13 Net income per share $0.11 $0.59

WEIGHTED AVERAGE NUMBER OF COMMON SHARES: Basic 81,885 46,735 Diluted 81,982 46,974

See notes to consolidated financial statements.

The McClatchy Company Consolidated Statistical Report (In thousands, except for preprints)

March

Combined As *Pro Forma Reported Revenues - Net: 2007 2006 % Change 2006

Advertising Retail $68,478 $65,732 4.2% $20,890 National 13,405 15,301 -12.4% 4,170 Classified Total 60,625 68,876 -12.0% 24,623 Automotive 13,855 15,391 -10.0% 5,652 Real Estate 17,530 21,543 -18.6% 8,920 Employment 22,200 25,442 -12.7% 8,165 Other Class 7,040 6,500 8.3% 1,886 Direct Marketing 11,698 12,285 -4.8% 3,695 Other Adv Rev 146 136 7.4% 135 Total Advertising $154,352 $162,330 -4.9% $53,513

Circulation 22,130 23,412 -5.5% 7,478 Other 6,143 5,665 8.4% 1,411 Total Revenues $182,625 $191,407 -4.6% $62,402

Memo: Online Only Advertising Revenue $13,539 $13,376 1.2% $3,568

Advertising Revenues by Market: California $29,581 $32,509 -9.0% $30,468 Southeast 38,859 39,167 -0.8% 12,706 Florida 25,011 29,431 -15.0% 0 Midwest 21,393 22,275 -4.0% 0 Northwest 17,279 16,591 4.1% 10,339 Texas 16,082 16,815 -4.4% 0 Other 6,147 5,542 10.9% 0 Total Advertising $154,352 $162,330 -4.9% $53,513

Advertising Statistics for Dailies: Full Run ROP Linage 964.4

Millions of Preprints Distributed 169.5

March

Print Only *Pro Forma Revenues - Net: 2007 2006 % Change

Advertising Retail $66,503 $64,608 2.9% National 12,911 14,743 -12.4% Classified Total 49,555 57,182 -13.3% Automotive 11,955 13,718 -12.9% Real Estate 16,353 20,254 -19.3% Employment 14,697 17,154 -14.3% Other Class 6,550 6,056 8.2% Direct Marketing 11,698 12,285 -4.8% Other Adv Rev 146 136 7.4% Total Advertising $140,813 $148,954 -5.5%

Advertising Revenues by Market: California $27,559 $30,567 -9.8% Southeast 34,570 35,316 -2.1% Florida 23,257 27,312 -14.8% Midwest 19,456 20,095 -3.2% Northwest 15,500 15,143 2.4% Texas 14,954 15,677 -4.6% Other 5,517 4,844 13.9% Total Advertising $140,813 $148,954 -5.5%

Advertising Statistics for Dailies: Full Run ROP Linage 2,531.1 2,681.2 -5.6%

Millions of Preprints Distributed 548.7 528.0 3.9%

Average Paid Circulation:** Daily 2,849.0 2,975.3 -4.2% Sunday 3,500.6 3,674.8 -4.7%

* Pro Forma includes Knight Ridder acquisition and excludes (Minneapolis) Star Tribune newspaper. ** Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.

The McClatchy Company Consolidated Statistical Report (In thousands, except for preprints)

March Year-to-Date Combined As *Pro Forma Reported Revenues - Net: 2007 2006 % Change 2006

Advertising Retail $206,028 $204,345 0.8% $64,688 National 45,150 50,399 -10.4% 13,758 Classified Total 188,535 211,676 -10.9% 76,282 Automotive 42,135 50,221 -16.1% 18,499 Real Estate 55,150 64,214 -14.1% 26,463 Employment 69,646 75,713 -8.0% 25,127 Other Class 21,604 21,528 0.4% 6,192 Direct Marketing 36,942 36,835 0.3% 11,093 Other Adv Rev 368 518 -29.0% 513 Total Advertising $477,023 $503,773 -5.3% $166,334

Circulation 71,880 74,585 -3.6% 23,764 Other 17,655 17,937 -1.6% 4,365 Total Revenues $566,558 $596,295 -5.0% $194,463

Memo: Online Only Advertising Revenue $41,205 $39,078 5.4% $10,502

Advertising Revenues by Market: California $92,486 $102,466 -9.7% $96,220 Southeast 118,860 119,905 -0.9% 38,236 Florida 82,181 93,366 -12.0% 0 Midwest 63,833 68,009 -6.1% 0 Northwest 52,573 51,129 2.8% 31,878 Texas 48,440 51,974 -6.8% 0 Other 18,650 16,924 10.2% 0 Total Advertising $477,023 $503,773 -5.3% $166,334

Advertising Statistics for Dailies: Full Run ROP Linage 2,995.2

Millions of Preprints Distributed 535.6

March Year-to-Date Print Only *Pro Forma Revenues - Net: 2007 2006 % Change Advertising Retail $200,134 $201,162 -0.5% National 43,746 48,150 -9.1% Classified Total 154,628 178,030 -13.1% Automotive 36,490 45,397 -19.6% Real Estate 51,465 60,461 -14.9% Employment 46,550 52,109 -10.7% Other Class 20,123 20,063 0.3% Direct Marketing 36,942 36,835 0.3% Other Adv Rev 368 518 -29.0% Total Advertising $435,818 $464,695 -6.2%

Advertising Revenues by Market: California $86,044 $96,621 -10.9% Southeast 106,391 108,780 -2.2% Florida 76,340 86,960 -12.2% Midwest 57,748 61,598 -6.3% Northwest 47,221 46,963 0.5% Texas 45,190 48,459 -6.7% Other 16,884 15,314 10.3% Total Advertising $435,818 $464,695 -6.2%

Advertising Statistics for Dailies: Full Run ROP Linage 7,637.7 8,389.5 -9.0%

Millions of Preprints Distributed 1,683.8 1,633.5 3.1%

Average Paid Circulation:** Daily 2,830.2 2,934.9 -3.6% Sunday 3,480.4 3,620.8 -3.9%

* Pro Forma includes Knight Ridder acquisition and excludes (Minneapolis) Star Tribune newspaper. ** Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.