TheStreet.com's Jim Cramer says massive debt at the newspapers means they no longer work as businesses.

Maybe newspapers don't work as businesses. The shocking 10% workforce reduction announced this week by McClatchy (Cramer's Take) (NYSE: MNI), formerly the best-run chain out there, is a reminder that all of these companies have borrowed too much money and don't generate the cash flow to make it work. McClatchy, with an 8% yield, is showing signs of collapsing under its own weight, something that has been exacerbated by Wall of Shame performer Gary Pruitt, a man who is still, amazingly, the CEO.

But all of this was totally predictable. I have never seen an industry attract so many buyers with so much debt and so little equity.

Take Tribune (Cramer's Take). Sam Zell's a smart guy. He let the newspaper employees do the heavy lifting when he bought the Tribune company. That was so smart. He will be out very little if the deal fails. The workers will be out their retirement money. That was a smart deal -- unless you work there -- but I have spoken against that deal so many times I am sick of talking about it.

McClatchy could have weathered this downturn, instead of -- it is a bit unthinkable, but I think it will happen -- defaulting on its debt, if it hadn't been determined to buy a bunch of properties for much more than they are worth. The New York Times (Cramer's Take) (NYSE: NYT) and Gannett (Cramer's Take) (NYSE: GCI) spent a lot of money, but they didn't have to buy back stock. Gannett's 6% yield isn't tempting in the least.

What got into all of these guys? First, they weren't portals. Each lacked critical mass to become the destination sites on the Web. Second, it makes very little sense to advertise with them for many of the bread-and-butter advertisers: classifieds, movies, real estate. Those are all purchased better on the Web, because the interactivity has an immediate payoff. Those ads for real estate you see are almost all for older, wealthier people and are vanity projects by the brokers to keep their salespeople happy.

Finally, the younger people aren't all that interested in news. That's really the rub. News isn't that important to them. Sure, they follow the election, but for the most part news isn't of real value. They don't care that much, and if they do they go to Google (Cramer's Take) (NASDAQ: GOOG) News, which is actually better than a newspaper because the newspaper companies were never able to gate their stuff.

So you have all of these old fuddy-duddy bankers and editors and publishers missing the whole point: New potential readers don't read papers any more. They don't even care much about the news.

When you layer on the cyclical aspect of things: quickly declining auto ads and retail ads -- much less competition there, so many fewer ads -- you really get a tsunami of pain that will make it so it is possible that most newspapers will have to restructure to stay in business. Basically, offline journalism isn't a business as it is currently configured. And all of these deals made no sense whatsoever.

My prediction: Within one year, most of the levered players will eliminate dividends, close papers and fire so many people that whatever might intrigue young people will be gone.

If they weren't so indebted, this would all be less of a problem. Much less.

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RELATED LINKS:
McClatchy to Cut 10% of Staff
They Just Don't Get McClatchy!
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.