Burdened by debt and a steep slide in newspaper advertising, the McClatchy Company, which owns 30 papers, may sell one of its most-prized properties - The Miami Herald. With daily circulation of 210,000, the Herald is notably the most prestigious of McClatchy’s newspapers, having won 19 Pulitzer Prizes.

Citing unnamed sources, The New York Times first reported that the Sacramento, Calif.-based newspaper chain is looking to sell off the Herald. However, the company refused to discuss the matter. Elaine Lintecum, the treasurer, said: “We do not comment on market rumors.”

It was in 2006 that McClatchy purchased the Herald from Knight-Ridder, which owned it since 1937, for $4.5 billon. The bid to sell the paper continues the fallout from the purchase itself - as a result of that deal the company has about $2 billion in debt, payments on which consume much of its cash flow. In June, the Herald had announced widespread layoffs with plans to cut 250 full-time jobs or 17 percent of the newspaper’s workforce.

Sources briefed about the company’s plans say that The Herald generates a very slim operating margin, and that the most attractive part of any deal could be its prime waterfront real estate. But the Florida real estate market is in deep recession – resulting in the present struggle of the paper, which used to benefit from heavy real estate advertising.

Last month, the Sacramento Business Journal reported McClatchy saw continued double-digit drops in revenue in October - with revenue dropping 17.8 percent to $176 million from $214 million in October 2007. Advertising revenue was down 20.4 percent in October to $145 million from $181 million in October 2007.

Image Source: miamisunpost.com