Friday’s news reports played the story as McClatchy filing for bankruptcy. But that’s not the deeper story. The venerable chain, publisher of The Sacramento BeeMiami Herald, and 28 other papers, is doing a deal with a hedge fund, Chatham Asset Management, which also owns supermarket tabloids.

The first part of the complex deal entails putting McClatchy into bankruptcy, so that it can shed a lot of its debt, notably the costs of its $1.4 billion worker pension fund. That makes it a more attractive property for Chatham, which can then acquire McClatchy for a lower cost.

The takeover of American newspapers by financial engineers is now pervasive. The exceptions are The New York TimesThe Wall Street JournalThe Washington PostThe Boston Globe, and a few others, with either national franchises or ownership by arguably benign billionaires like Jeff Bezos of Amazon of the Post and Globe owner John Henry (who in his civic role as owner of the Boston Red Sox just traded Mookie Betts!).

But for the rest, mainly regional papers, hedge funds and private equity companies are not in business to benefit communities. They exist to maximize profits by milking the companies they take over. Inevitably, they do this by loading up their acquired properties with debt, cutting newsroom staff to the bone, and impoverishing the civic role of the local press.

Digital journalism is great, but at the level of regional and local newspapers, nothing comes close to a real paper—whether the content is distributed in print or online or both.

Unless we find a way for newspapers to take back ad revenue from the Googles and Facebooks, or come up with durable models of nonprofit and reader-supported newspapers, a vital function of American democracy will wither and die. It’s one more contribution of the financialization of everything.