• Editor & Publisher , Monday, November 17, 2008 9:17 AM

A new Morningstar report declares that the stock of the McClatchy newspaper chain "could be worthless" because of the company's high debt and shrinking revenue.

Morningstar analyst Tom Corbett says debt from McClatchy's blockbuster 2006 acquisition of Knight Ridder means that the company will look to satisfy its creditors rather than its shareholders. When McClatchy bought Knight Ridder for $4.6 billion, it called the move a "bold bet on the future of print journalism."

Corbett is the same analyst who this summer similarly dismissed GateHouse Media shares as having a "fair value" of zero. The stock was delisted by the Big Board in October and now trades over the counter. McClatchy shares have lost 87.5% of their value in the last 52 weeks.

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