Like most newspapers, The Unification Church-controlled Washington Times is experiencing significant financial problems.

The New York Times reports that the far-right wing newspaper will lay off at least 40% of its 370 employees, citing a memo sent to workers. That hardly seems appropriate for a newspaper that was founded by a guy (Syun Myung Moon) believed by himself and his followers to be the second coming of Jesus Christ.

The McClatchy Company (NYSE: MNI) has watched its stock price tank from a 52-week high of more than $15 to its current price of $2.20 as the company's massive debt load has been made more ominous by the precipitous decline in advertising brought on by the weak economy -- on top of all the other problems facing newspapers. In 2005, the stock traded at better than $75 per share.

So now McClatchy is looking to sell the Miami Herald, according to The New York Times. But the Times added that its sources "said they knew of no serious offers for the paper, reflecting the evaporation of major investors' interest in buying newspapers."

Shocking! I can't believe that people aren't lining up to buy a newspaper that makes its money by selling advertising in one of the cities hardest hit by falling real estate prices.

You really have to question the intelligence of the company's board of directors and management: The company has paid out enormous dividends while acquiring companies like Knight Ridder at outrageous prices. Now they're looking to dump one of their most prestigious properties at a fire-sale price. And yet the dividend remains.

It's time for the dividend to go, along with everyone who's had anything to do with the company's strategic direction. It might be too late to salvage shareholder value, but they should at least find someone who knows what he's doing to give it a try.

It has come to this: The newspaper industry is in such bad shape that one of the largest chains will sell its crown jewel. McClatchy (NYSE: MNI), the debt-heavy paper firm, is working on auctioning the Miami Herald. With its revenue falling rapidly, the move may not be enough to save the parent company.

According to The New York Times, "The people briefed on the company's plans say The Herald generates a very slim operating margin and that the most attractive part of any deal could be its prime waterfront real estate." How remarkably sad that a transaction would be one with the primary purpose of selling valuable Florida land.

McClatchy does not have much choice. Its own operating margins are tiny. The firm said its ad revenue dropped 20% in October. In the third quarter, MNI had net income of $4 million on revenue of $451 million. McClatchy has over $2 billion in long-term debt.

There is still an excellent chance that MNI will follow other publicly traded newspaper chains Journal Register and Gatehouse to the point where their shares are delisted from NYSE and they are forced to sell most of their properties to pay off debts.

Selling the Herald does not solve the problem. Newspapers are not going to rebuild their revenue.

Douglas A. McIntyre is an editor at 247wallst.com.