Fitch Comments on CareerBuilder Transaction

Business Wire, August 2, 2006

CHICAGO -- On Aug. 1, Tribune (TRB), McClatchy (MNI) and Gannett (GCI) announced that under the terms of a new agreement, GCI and TRB would each increase their stakes in CareerBuilder and ShopLocal to 42.5% and Topix.net to 31.9%. MNI will retain a 15% position in CareerBuilder and 11.25% in Topix.net. The announced transaction is in-line with Fitch's expectations for TRB and slightly better than Fitch's expectations for MNI. Fitch also views the resolution as a slightly positive development for CareerBuilder and the newspaper industry in general.

Fitch currently rates TRB and MNI as follows. GCI is not rated by Fitch.

Tribune Co.

--Issuer Default Rating 'BBB-', Negative Outlook.

The McClatchy Company

--Issuer Default Rating 'BBB-', Negative Outlook.

TRB will pay out approximately $155 million under the agreement, which is slightly under Fitch's conservative estimates calculated in connection with Fitch's downgrade of the company on May 30. Fitch believes TRB can make this payment to MNI and also meet its deleveraging targets by year end 2007, as Fitch anticipates that any cash flow generation shortfalls would be supplemented with asset sales. The deal provides some insight into the potential valuation range of TRB's stake in CareerBuilder at around $650 million. Fitch recognizes that the company's share price performance in recent years and the publicly disclosed boardroom unrest could have potential implications on the company's business structure and financial policies. As mentioned in our May 30 release, further downgrades could occur if Fitch's view regarding the company's capacity, commitment or incentive to maintain investment grade ratings changes.

As a result of this agreement, MNI will receive approximately $310 million, which Fitch expects will be used to accelerate the repayment of bank debt. The $310 million represents just under a half a turn of leverage and positions the company in the high 3.0 times (x) leverage range and closer to its leverage goals of being below 3.0x over the next several years. Fitch believes that for MNI, remaining part of the newspaper consortium and cultivating a relationship with two companies (GCI and TRB) with good track records of working together and building a growing online franchise could prove to be strategically prudent over the intermediate to longer term.

In Fitch's view, the agreement is also generally favorable for CareerBuilder and for the broader newspaper industry. CareerBuilder has grown rapidly and has taken shares from Monster.com due in part to its affiliation with newspapers to source help wanted ads. By increasing their stakes, GCI and TRB now potentially have currency to use to potentially expand affiliation arrangements with other newspaper companies (by granting some ownership in the network) without diluting their stakes below their initial 33% positions. Alternatively, if the two incumbent owners do not use their stakes as currency to attract other newspaper affiliates, the transaction appears to be a way to expand the value of their internet investment stakes without paying a significant premium.

Fitch believes that keeping the consortium of top newspaper players together and potentially expanding the consortium could have positive implications for the industry. These companies engage in limited direct competition in their markets and are facing the same secular challenges. Replication of the growth of CareerBuilder among other classified verticals and continued collaboration on news sharing and other common initiatives could possibly enable newspaper companies to effectively compete with online rivals over the longer term.

Fitch's analysis on the Newspaper Industry 'US Newspapers: Heightened Risk in a Downturn' can be found on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.