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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes [ X ]        No [ ]

THE McCLATCHY COMPANY

INDEX TO FORM 10-Q

PART I - FINANCIAL INFORMATION

Item 1 - FINANCIAL STATEMENTS

The McClatchy Company (the Company) and its subsidiaries are engaged primarily in the publication of newspapers located in Minnesota, California, Washington State, Alaska and North and South Carolina.

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany items and transactions have been eliminated. In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the Company's financial position, results of operations, and cash flows for the interim periods presented. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year.

In the second quarter of 2003, the Company wrote down a certain Internet investment by $504,000. In the first quarter of fiscal 2002, the Company purchased a significant portion of the assets of a different Internet company in which it had previously invested. In connection with this acquisition, the Company recorded a non-operating loss of $1 million in that quarter to write down the Internet investment to its fair market value. Other adjustments reflect normal recurring accruals except for the discontinued operation discussed below.

Discontinued operation - On June 10, 2003, the Company sold the assets of The Newspaper Network (TNN), a national sales and marketing company. The Associated Press purchased TNN's ad processing operations and, separately, Vertis, Inc. purchased TNN's sales and marketing assets. Total consideration from the sales was $14.2 million including the assumption of liabilities. The Company has reclassified the assets and liabilities of TNN as held for sale in its consolidated balance sheet as of December 29, 2002. The revenues and operating results of TNN are included in discontinued operations in 2002 and 2003, as is the gain on its sale in 2003.

Ponderay Newsprint Company - The Company owns a 13.5% interest in Ponderay Newsprint Company ("Ponderay"), a general partnership, which owns and operates a newsprint mill in the State of Washington. The investment is accounted for using the equity method, under which the Company's share of Ponderay's earnings or loss is recognized in the Company's results.

Stock-based compensation - At September 28, 2003 the Company had six stock-based compensation plans. The Company accounts for stock-based awards to employees using the intrinsic value method in accordance with APB No. 25, "Accounting for Stock Issued to Employees". No material amounts of compensation have been recorded for these plans.

Had compensation costs for the Company's stock-based compensation plans been determined based upon the fair value at the grant dates for awards under those plans consistent with the method of SFAS Statement No. 123, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below (in thousands, except per share amounts):

Other comprehensive income (loss) - The Company records changes in its net assets from non-owner sources in its Statement of Stockholders' Equity. Such changes relate primarily to valuing its pension liabilities and interest rate protection agreements, net of tax effects.

The following summarizes the change in the accumulated other comprehensive income (loss) for the nine months ended September 28, 2003 (in thousands):

The following summarizes the accumulated other comprehensive loss balances as of

September 28, 2003 (in thousands):

Other comprehensive income was $2.7 million for the nine months ended

September 28, 2003, and there was a comprehensive loss of $249,000 for the nine months ended September 29, 2002.

Agreement Among Class B Shareholders - The Company's Class A and Class B common stock participate equally in dividends. Holders of Class B common stock are entitled to one vote per share and to elect as a class 75% of the Board of Directors, rounded down to the nearest whole number. Holders of Class A common stock are entitled to one-tenth of a vote per share and to elect as a class 25% of the Board of Directors, rounded up to the nearest whole number. Class B common stock is convertible at the option of the holder into Class A common stock on a share-for-share basis.

The holders of shares of Class B Common Stock are parties to an agreement, the intent of which is to preserve control of the Company by the McClatchy family. Under the terms of the agreement, the Class B shareholders have agreed to restrict the transfer of any shares of Class B Common Stock to one or more "Permitted Transferees," subject to certain exceptions. A "Permitted Transferee" is any current holder of shares of Class B Common Stock of the Company; any lineal descendant of Charles K. McClatchy; or a trust for the exclusive benefit of, or in which all of the remainder beneficial interests are owned by, one or more of lineal descendants of Charles K. McClatchy.

In the event that a Class B shareholder attempts to transfer any shares of Class B Common Stock in violation of the agreement, or upon the happening of certain other events enumerated in the agreement as "Option Events," each of the remaining Class B shareholders has an option to purchase a percentage of the total number of shares of Class B Common Stock proposed to be transferred equal to such remaining Class B shareholder's ownership percentage of the total number of outstanding shares of Class B Common Stock. If all the shares proposed to be transferred are not purchased by the remaining Class B shareholders, the Company has the option of purchasing the remaining shares. In general, any shares not purchased under this procedure will be converted into shares of Class A Common Stock and then transferred freely (unless, following conversion, the outstanding shares of Class B Common Stock would constitute less than 25% of the total number of all outstanding shares of common stock of the Company). Th e agreement can be terminated by the vote of the holders of 80% of the outstanding shares of Class B common Stock who are subject to the agreement. The agreement will terminate on September 17, 2047, unless terminated earlier in accordance with its terms.

Earnings per share (EPS) - Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock options and are computed using the treasury stock method. The antidilutive stock options that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation in the third quarter were 79,500 in 2003 and 43,500 in 2002.

The Company's Credit Agreement includes term loans consisting of Tranche A of $227 million, bearing interest at the London Interbank Offered Rate (LIBOR) plus 62.5 basis points, payable in increasing quarterly installments through March 21, 2005, and Tranche B of $102 million, bearing interest at LIBOR plus 150 basis points and payable in semi-annual installments through September 19, 2007. A revolving credit line of up to $200 million bears interest at LIBOR plus 62.5 basis points and is payable by March 19, 2005. Interest rates applicable to debt drawn down at September 28, 2003 ranged from 1.75% to 2.64% (excluding the effect of the interest rate protection agreements described below).

The terms of the Credit Agreement include certain operating and financial restrictions, such as limits on the Company's ability to incur additional debt, create liens, sell assets, engage in mergers, make investments and pay dividends. The debt is unsecured and is pre-payable without penalty.

At September 28, 2003, the Company had outstanding letters of credit totaling $6.0 million securing estimated obligations stemming from workers' compensation claims and other contingent claims.

	September 28, 2003		December 29, 2002
Term Loans	$          329,000		$          384,000
Revolving credit line	68,300		112,000
Total indebtedness	397,300		496,000
Less current portion	99,615		24,385
Long-term indebtedness	$          297,685		$          471,615

The Company does not have, nor does it currently intend to enter into, derivative contracts for trading purposes. The Company has not attempted to use derivative instruments to hedge fluctuations in the normal purchases of goods and services used to conduct its business operations. Currently there is no intent to hedge or enter into contracts with embedded derivatives to hedge expenses associated with the purchase of newsprint, ink and other inventories, leases of equipment and facilities, or business insurance contracts.

The Company has one interest rate swap agreement designated as a cash flow hedge that is specifically designed to hedge the variability in the expected cash flows that are attributable to interest rate fluctuations on $100 million of long-term indebtedness through June 2004. The effect of this agreement is to fix the LIBOR interest rate exposure on this borrowing at approximately 3.8% on that portion of the Company's term loans.

The swap instrument provides for payments of interest at the fixed rate and receipt of interest at variable rates, which are reset to three-month LIBOR rates quarterly. Net payments or receipts under the agreement are recorded as adjustments to interest expense. The swap was entered into to match the significant terms of the underlying debt in an effort to provide a highly effective hedge.

No gain or loss has been recorded in net income as a result of ineffectiveness of the Company's hedge. Income, net of taxes, of $2.7 million for the nine months ended

September 28, 2003 and a loss, net of taxes, of $249,000 for the nine months ended
September 29, 2002, were recorded in comprehensive income (loss) related to the Company's hedge - see the Company's Consolidated Statement of Stockholders' Equity.

As of September 28, 2003, the Company was a guarantor of $14.3 million of bank debt related to its interest in Ponderay, a general partnership that owns and operates a newsprint mill in Washington State. The guarantee amount represents the Company's pro rata portion of Ponderay debt, which is guaranteed by the general partners. The partnership was formed in 1985 and began operations in 1989. The debt is secured by the assets of Ponderay and is payable by Ponderay on April 12, 2006.

The Company owns and publishes 24 newspapers in four regions of the country - Minnesota, California, the Carolinas and the Northwest (Alaska and Washington). The newspapers range from large dailies serving metropolitan areas to non-daily newspapers serving small communities. The Company also owns and operates Nando Media, a national online publishing operation.

On June 10, 2003, the Company sold the assets of The Newspaper Network (TNN), a national sales and marketing company. The Associated Press purchased TNN's ad processing operations and, separately, Vertis, Inc. purchased TNN's sales and marketing assets. Total consideration from the sales was $14.2 million including the assumption of liabilities. The Company has reclassified the assets and liabilities of TNN as held for sale in its consolidated balance sheet as of December 29, 2002. The revenues and operating results of TNN are included in discontinued operations in 2002 and 2003, as is the gain on its sale in 2003.

The Company supplements its newspaper publishing with a growing array of niche products and direct marketing initiatives, including direct mail. The Company also operates leading local websites in each of its 11 daily newspaper markets offering readers information, comprehensive news, advertising, e-commerce and other services.

Critical Accounting Policies

The accompanying discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (US GAAP). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and the best estimates and judgments routinely require adjustment. The most significant areas involving estimates and assumptions are revenue recognition, al lowance for receivables, amortization and/or impairment of intangibles, pension and post-retirement expenses, insurance reserves, incentive compensation, environmental reserves, the Company's tax provision and depreciation of fixed assets. We believe the following critical accounting policies, in particular, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition - Advertising revenues are recorded when advertisements are placed in the newspaper and circulation revenues are recorded as newspapers are delivered over the subscription term. Circulation revenues are recorded net of direct delivery costs. Other revenue is recognized when the related product or service has been delivered. Revenues are recorded net of estimated incentive offerings including special pricing agreements, promotions and other volume-based incentives. Revisions to these estimates are charged to income in the period in which the facts that give rise to the revision become known.

Bad Debt - The Company maintains a reserve account for estimated losses resulting from the risk its customers will not make required payments. Generally, the Company uses the aging of accounts receivable to establish reserves for losses on accounts receivable. However, if the financial condition of a customer deteriorates, resulting in an impairment of their ability to make payments, additional allowances are reserved.

Goodwill and Intangible Impairment - In assessing the recoverability of the Company's goodwill and other intangibles, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. The Company analyzes its goodwill and intangible assets with indefinite lives for impairment. No material impairment loss was recorded in fiscal 2003 or 2002.

Pension and Post-retirement Benefits - The Company has significant pension and post-retirement benefit costs and credits that are developed from actuarial valuations. Inherent in these valuations are key assumptions including discount rates and expected return on plan assets. The Company is required to consider current market conditions, including changes in interest rates, in establishing these assumptions. Changes in the related pension and post-retirement benefit costs or credits may occur in the future because of changes resulting from fluctuations in the Company's employee headcount and/or changes in the various assumptions.

The Company uses a discount rate of 6.75% and an assumed long-term return on assets of 9.0% to calculate its retirement expenses. The return on asset rate was set based upon reviews of a 30- and 50-year span of historical returns of equity and fixed income indices, taking into account the roughly 70% equity and 30% fixed income mix of the Company's qualified pension plans assets, and consultation with the Company's actuaries. The Company also reviews the expected long-term return for each asset class and its weighted-average effect on total return in setting its long-term return on asset assumption.

Self-Insurance - The Company is self-insured for the majority of its group health insurance costs. The Company relies on claims experience and the advice of consulting actuaries and administrators in determining an adequate provision for self-insurance claims.

While total advertising revenues grew 4.2% in the third quarter, classified advertising continued to decline, particularly in the employment and automotive categories. Employment advertising revenues, which have declined significantly over the past two years, declined 11.3% in the third quarter of fiscal 2003, while automotive declined 1.4%. These declines were offset by advertising revenue growth in other categories. Please see the revenue discussions below.

Newsprint is the major component of the Company's cost of raw materials and represented 13.9% of the Company's overall operating expenses in the third quarter of fiscal 2003. Consequently, the Company's earnings are sensitive to changes in newsprint prices. All other things being equal, a hypothetical $10 per metric tonne change in newsprint prices affects earnings per share by $.03 cents annually. The Company's newsprint suppliers implemented increases in newsprint prices in the fourth quarter of fiscal 2002 and the second quarter of fiscal 2003. In addition, a price increase that was announced in August, but largely delayed until October 2003, will impact costs in the fourth quarter of 2003. Given the 2003 price increases, newsprint costs in the fourth quarter are likely to rise over the 2002 quarter by high single- to low double-digit levels. The timing and amount of changes in newsprint pricing are largely dependent on global demand and supply for newsprint. The impact of newsprint price e xpense on the Company's operating results is discussed in the quarterly and nine-month comparisons below.

The Company's fringe benefit costs have increased 9.9% over fiscal 2002 due primarily to higher retirement and medical costs, and are expected to continue to increase in fiscal 2004. Historically low long-term interest rates have caused the discount rate used to calculate the Company's pension and post-retirement expenses in fiscal 2003 to be 75 basis points below the rate used in fiscal 2002. This is the primary factor in driving up the cost of retirement expenses. Retirement expenses in fiscal 2003 a