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McClatchy Files Form 10-Q and Reports Final Results for Third Quarter of 2007: Reports Non-cash Impairment Charges

Released 11/08/2007

The McClatchy Company (NYSE: MNI) today reported that it filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 (the Report) with the Securities Exchange Commission (SEC), which includes its final third quarter 2007 results.

The company's third quarter 2007 after-tax loss from continuing operations was $1.35 billion, or $16.40 per share including the effect of non-cash after-tax impairment charges primarily related to goodwill and newspaper mastheads of $1.37 billion, or $16.68 per share. Earnings before the charges were unchanged from the $23.5 million, or 29 cents per share, previously reported on October 16, 2007.

The loss from continuing operations for the first nine months of 2007 was $1.30 billion or $15.81 per share including the effect of the non-cash impairment charges. The company's total net loss, including the results of discontinued operations, for the first nine months of 2007 was $1.30 billion, or $15.89 per share.

As the company noted in its press release on October 16, 2007, management performed impairment testing of goodwill and other long-lived assets as of September 30, 2007, in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets and due to the continuing challenging business conditions and the resulting weakness in the company's stock price as of the end of its third quarter. Upon completion of that testing, the company recorded pre-tax non-cash impairment charges of $1.18 billion to goodwill, $250.4 million to newspaper mastheads and $84.6 million to investments in unconsolidated subsidiaries and other items.

Gary Pruitt, McClatchy's chairman and chief executive officer, said "The challenging business environment, coupled with the drag on our stock price, has resulted in our taking an impairment charge to write down the value of goodwill, mastheads of certain newspapers, and other assets on the company's balance sheet in the third quarter. However, these are non-cash accounting charges, and nothing about them changes our operations or our ability to reduce debt.

"As I said last month when we released our preliminary earnings, we recognize that newspaper revenues have declined industry-wide and that values have dropped. We have been more affected than most by the real estate downturn because of our operations in California and Florida, the epicenters of the sub-prime lending practices. We do not know when this downturn will end, and do not have visibility beyond the fourth quarter. Nonetheless, we believe that cyclical factors represent a significant portion of the current advertising downturn as evidenced by our operations in the California and Florida regions. McClatchy is a solidly profitable company that is rapidly paying down debt and re-engineering its operations to navigate through a changing environment for all media companies. We are well positioned in markets with growth prospects better than the nation as whole, and while that clearly doesn't make us immune to national economic events, we believe it will serve us well when the economy begins to recover from the real-estate led slowdown. Looking longer term, we like the prospects for all of our growth markets. We are working hard to grow revenues and will continue to focus on cost controls to weather this downturn by remaining efficient and protecting cash flows as best we can."

About a third of the goodwill impairment charge resulted from the accounting treatment of the value of common stock issued in the Knight Ridder transaction, which resulted in additional goodwill being recorded. McClatchy announced the acquisition of Knight-Ridder, Inc. on March 10, 2006 and closed the transaction on June 27, 2006 (the "Acquisition"). Management has disclosed in the company's financial statements since the third quarter of 2006 (when the Acquisition was completed), that it was required to record the value of the 35.0 million shares of McClatchy common stock issued in the Acquisition at $1.821 billion, or $52.06 per share, which was included in the total Acquisition purchase price. The fair value of these shares was actually $1.398 billion as of the Acquisition closing date ($39.03 per share at June 27, 2006); however under the accounting rules the decline of approximately $423.0 million in valuation had no effect on the total Acquisition purchase price recorded. That additional $423.0 million was included in goodwill.

The unaudited consolidated statement of income which has been filed with the SEC is attached to this release.

About McClatchy:

The McClatchy Company is the third largest newspaper company in the United States, with 31 daily newspapers, approximately 50 non-dailies and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which complement its newspapers and extend its audience reach in each market. Together with its newspapers and direct marketing products, these operations make McClatchy the leading local media company in each of its premium high growth markets. 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.

McClatchy also has a portfolio of premium digital assets. Its leading local websites offer users information, comprehensive news, advertising, e- commerce and other services. The company owns and operates McClatchy Interactive, an interactive operation that provides websites with content, publishing tools and software development. McClatchy operates Real Cities (http://www.RealCities.com), the largest national advertising network of local news websites and owns 14.4% 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 the nation's number two online auto website, cars.com, and the number one rental site, 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, including revenues, operating expenses, cash flows and debt levels, as well as 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 risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: McClatchy may not consummate contemplated transactions which may enable debt reduction on anticipated terms or at all; McClatchy may not achieve its expense reduction targets or may do harm to its operations in attempting to achieve such targets; McClatchy's operations have been, and will likely continue to be, adversely affected by competition, including competition from internet publishing and advertising platforms; McClatchy's expense and income levels could be adversely affected by changes in the cost of newsprint and McClatchy's operations could be negatively affected by any deterioration in its labor relations, 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 Nine Months Ended September September September September 30, 24, 30, 24, 2007 2006 2007 2006 REVENUES - NET: Advertising $457,017 $506,774 $1,422,317 $856,791 Circulation 67,995 70,637 209,582 117,905 Other 15,332 17,717 55,030 26,895 540,344 595,128 1,686,929 1,001,591 OPERATING EXPENSES: Compensation 224,309 232,611 689,592 402,453 Newsprint and supplements 63,600 83,171 211,203 136,702 Depreciation and amortization 36,250 36,662 112,440 56,522 Other operating expenses 118,440 129,001 371,180 204,691 Goodwill and newspaper masthead impairment 1,434,590 - 1,434,590 - 1,877,189 481,445 2,819,005 800,368

OPERATING INCOME (LOSS) (1,336,845) 113,683 (1,132,076) 201,223

NON-OPERATING (EXPENSES) INCOME: Interest expense (48,264) (46,689) (151,605) (46,679) Interest income 23 2,007 129 2,035 Equity income(losses) in unconsolidated companies, net (7,652) (811) (28,599) 81 Write-down of investments and land held for sale (84,568) - (84,568) - Other - net 700 8,445 1,443 8,390 (139,761) (37,048) (263,200) (36,173) INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION (BENEFIT) (1,476,606) 76,635 (1,395,276) 165,050

INCOME TAX PROVISION (BENEFIT) (131,419) 24,025 (99,133) 58,470

INCOME (LOSS) FROM CONTINUING OPERATIONS (1,345,187) 52,610 (1,296,143) 106,580

INCOME (LOSS) FROM DISCONTINUED OPERATIONS - NET OF INCOME TAXES (1,546) (779) (6,324) 17,114

NET INCOME (LOSS) $(1,346,733) $51,831 $(1,302,467) $123,694

NET INCOME (LOSS) PER COMMON SHARE: Basic: Income (loss) from continuing operations $(16.40) $0.65 $(15.81) $1.83 Income (loss) from discontinued operations (0.02) (0.01) (0.08) 0.30 Net income (loss) per share $(16.42) $0.64 $(15.89) $2.13

Diluted: Income (loss) from continuing operations $(16.40) $0.65 $(15.81) $1.82 Income (loss) from discontinued operations (0.02) (0.01) (0.08) 0.30 Net income (loss) per share $(16.42) $0.64 $(15.89) $2.12

WEIGHTED AVERAGE NUMBER OF COMMON SHARES: Basic 82,040 81,013 81,967 58,173 Diluted 82,040 81,191 81,967 58,416