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NEW YORK A Goldman Sachs analyst said Monday that McClatchy Co.'s new debt agreement with lenders will give the newspaper publisher more wiggle room for the next two years as it deals with slowing ad sales.

Late Friday, McClatchy said it amended its $1.175 billion debt deal to account for reduced cash flow. The Sacramento, Calif., company has agreed to put up more collateral and pay higher interest rates as part of the renegotiation.

"Clearly a positive development for McClatchy in terms of gaining breathing room in the context of a very challenging operating backdrop," analyst Peter Appert wrote in a client note.

McClatchy, as well as many other publishers, have watched advertising revenue decline as consumers and advertisers increasingly shift to the Internet. Many companies have tried to reduce costs and ramp up their Web operations in response.

McClatchy's ad revenue in August was nearly 18 percent lower than the prior-year period.

Earlier this month the company cut 1,150 jobs because of its advertising woes, its second major round of reductions in three months. The publisher also decided to cut by half, to 9 cents per share, its quarterly dividend rate, payable Oct. 6 to shareholders as of Friday, giving the company more cash to lower debt.

McClatchy has 30 daily papers, including The Sacramento Bee and The Miami Herald, and about 50 non-daily newspapers.