The State newspaper’s new owner will keep all employees.

Editor & Publisher trade magaine reported that Chatham Asset Management will keep most senior leaders and honor existing union contracts.

According to an agreement in federal bankruptcy court, the New Jersey hedge fund, will pay $312 million for the nation’s second largest local news company which owns The State, Rock Hill Herald, Myrtle Beach Sun News and Hilton Head Island Packet.

The founding McClatchy family has owned the SC papers since they bought them from another family owned publisher, Knight-Ridder.

CEO Craig Forman and board chairman Kevin McClatchy will depart once the sale is final.

A rival bid from the hedge fund Alden Global Capital proposed to cut 1,000 jobs — more than a third of the 2,800 employees of The State and other newspapers.

Alden would not preserve salary and benefits for employees and would have forced McClatchy to reject its collective bargaining agreements or obtain a waiver from its unions.

Judge Michael Wiles is scheduled to consider the agreement at an Aug. 4 hearing.

Chatham, an investor in McClatchy since 2009, turned $263 million of the company’s debt into what is known as a credit bid and added nearly $49.2 million in cash.

Like the rest of the local news industry, a new McClatchy still faces daunting economic challenges.

One industry analyst calculated that McClatchy lost as much of 40% of its advertising revenue after the pandemic shocked the US economy. That follows an 80% loss from 2006 to 2018 detailed in the company’s first-day filing.

McClatchy has become less dependent on advertising revenue.

Last year, only about 47% of revenues came from advertising, compared with 58% in 2016.

McClatchy has said it cut 40% of its full-time staff from 2016 to 2019.

Chatham is not new to media ownership. The hedge fund, which has $4.4 billion in assets, became majority owner of Canada’s largest news chain, Postmedia Network Canada Corp., in 2016.

McClatchy owns news organizations in 14 states and Washington, DC.

Its newspapers have won 54 Pulitzer Prizes.