McClatchy Details Plans for KR; Future Uncertain for Slow-Growth Dozen

March 12, 2006
Category: Archive



 

Meet the New Boss
By Rick Edmonds

Howard Weaver is vice president for news at McClatchy, with general oversight of all the paper’s news operations. He has been with the company more than 25 years, including a 12-year stint as editor of the Anchorage Daily News during which it grew from a distant second in the market to the only surviving paper. On his way to the airport to catch a flight to Washington, he spoke briefly with me.

Edmonds: So you’re the new boss at 20 Knight Ridder newspapers. What should journalists there expect?


Weaver: Well, technically I’m not anyone’s boss except the Washington bureau’s. Our editors report to their publishers. But if they are curious, look at our papers and talk to anyone who works there.  We’re very consistent.


What will McClatchy ownership mean for staffing at these papers? Is there a McClatchy way, different from the Knight Ridder way?


I’ve been talking with a lot of Knight Ridder editors this morning –- let me give you a little of my stump speech.


First, this is a mixed day for journalism. It is tremendously exciting to me and to us to have all these new papers to work with. But it is not good news when a great newspaper company goes away. And Knight Ridder has been a beacon of great journalism through the years.


It also is painful to us that 12 of the papers and their staff will not be going with us.


As for news staff, the stakes are so high (in 21st century media competition), you can’t afford to go onto the field with anything but the very best. Think about what a talent pool has been assembled. Someone has to prove that quality, independent journalism should be at the heart of the enterprise, and we intend to be the one to do it. On the other hand, the only real security is success in the marketplace. Part of that is being disciplined and lean.


What are you going to do next?


I’m flying to Washington to meet with the bureau. We are almost spookily congruent –- our bureau has been about 85 percent regional, Knight Ridder’s is about 85 percent national … Gary (Pruitt) and I will be visiting a lot of newsrooms in the next three weeks (including The Miami Herald Tuesday). As the saying goes, it will be a conversation not a lecture. We will be doing a lot of listening.


You recently completed a major and closely-watched redesign project in Minneapolis. Will that or lessons from that be brought to the Knight Ridder papers?

It is a wonderful resource for any paper in the country. But it is not a template. Every market is different.






“McClatchy Plus”
By 
Bill Mitchell


In a conference call with analysts Monday morning, McClatchy CEO Gary Pruitt sketched the outlines of what he described as “McClatchy Plus” after the acquisition of Knight Ridder. He said McClatchy will keep 20 Knight Ridder newspapers in growth markets, and will sell 12 in markets of slower growth.


 

“I don’t think it will be difficult to find buyers,” Pruitt said of the dozen papers to be sold. “We’ll begin marketing them today.”

 

It was unclear whether McClatchy has already begun discussions with other media companies — or the Newspaper Guild — about the possible sale of various properties. Said Pruitt: “We will try to sell these papers as quickly as we can … in groups or individually.”

 


Gannett, MediaNews and the Guild have all been mentioned as possible buyers of the newspapers McClatchy doesn’t want.

 

“We are sorry to prolong the uncertainty” facing employees of the papers to be sold, he said.

 

Pruitt said he expected that McClatchy will succeed Knight Ridder as one-third owner of CareerBuilder, the online help-wanted company. But he acknowledged that Gannett and Tribune have a right of first refusal to buy out Knight Ridder’s share rather than let it go to McClatchy.

 

Pruitt said McClatchy has good relations with Gannett and Tribune — and that McClatchy would add significantly to the value of CareerBuilder with its newspaper and online properties. He said he expected McClatchy will emerge a one-third owner of CareerBuilder.

Read CEO Ridder’s FAQ, letter to Knight Ridder staffers 

Romenesko Misc.
Knight Ridder CEO Tony Ridder tells his employees: “As we transition to new ownership, I am counting on all of you to give your work, and your relationships, that same investment of care and energy that have always characterized both. And I will do the same.” PLUS: An FAQ for KR staffers.
> Who will run a combined McClatchy-Knight Ridder DC bureau? E&P)

 

Suggestion for Ridder: Start a new 12-newspaper chain
Romenesko Letters
“Now that Tony Ridder has a bunch of cash coming for being forced to sell Knight Ridder, couldn’t he buy the 12 papers McClatchy wants to unload and take that shrunken leftover of KR private?” asks Omar Sofradzija. “A not-quite-up-to-industry-level profits-but-profitable 12-paper chain with Philly, San Jose and St. Paul at its core with quality smaller metros in Akron and Duluth, among other places, sounds like a pretty good chain to me.”


San Jose Mercury News
The Knight Ridder acquisition not only will reshape McClatchy, but will alter the entire media landscape, writes Chris O’Brien. Newspaper analyst Doug Arthur says: “Gary Pruitt (left) is the best young executive in the [newspaper] group. Right now, I have a hard time getting institutional investors interested in McClatchy, frankly. But with this merger, McClatchy becomes the most interesting name in the group. It goes from an interesting little niche-y story to a major story.”
> “We do not think it will be difficult to find buyers” for the 12 KR papers McClatchy is selling, says Pruitt. “We begin marketing these papers today…. We will move with alacrity. Perhaps a simultaneous closing.” (Philadelphia Inquirer)
> McClatchy-KR deal wasn’t swayed by emotion, says Pruitt (SacBee)



American Journalism Review
“So now McClatchy has won. But while a celebration is in order, it will be a muted one, as far as I’m concerned,” writes Rem Rieder. That’s because “the agony continues” at a dozen Knight Ridder papers that McClatchy doesn’t want. (Watch the video of McClatchy CEO Gary Pruitt on CNBC.)
> KR’s Washington bureau assured it’s safe under McClatchy (E&P)
> E&P’s 2001 profile of Pruitt | AJR’s 2003 profile of McClatchy


 

McClatchy buys Knight Ridder, will sell 12 KR newspapers
Editor & Publisher | McClatchy press release
Knight Ridder has agreed to sell itself to McClatchy for $4.5 billion. McClatchy says in a press release that it will now sell 12 KR papers, including the two Philadelphia papers and the San Jose Mercury News. The company these papers are located in cities that “do not fit the company’s longstanding acquisition criteria, chiefly involving growing markets.” KR CEO Tony Ridder says: “For the 12 newspapers that will be sold, the uncertainty is not over and I regret that very much.”
> The other papers to be sold are the Akron Beacon Journal, Wilkes-Barre Times Leader, Aberdeen American News, Grand Forks Herald, Ft. Wayne News-Sentinel, Contra Costa Times, Monterey Herald, Duluth News Tribune, and St. Paul Pioneer Press.
> KR alums urge McClatchy to reexamine intention to sell papers (Misc.)
> McClatchy says it doesn’t plan to cut jobs at the papers it’s buying (Strib)
> Will the Guild get some of the KR papers that McClatchy’s selling? (E&P)
> Three factors played key roles in Knight Ridder’s downfall (SacBee)
> Earlier: Future turns cloudy for St. Paul Pioneer Press (Pioneer Press)

McClatchy Agrees to Buy Knight Ridder for $4.5 Billion
Bloomberg
In a story posted at 6:32 a.m. Monday, Bloomberg reported: “McClatchy will pay $67.50 in cash and stock for each share of San Jose, California-based Knight Ridder, the companies said in a PR Newswire statement. McClatchy, based in Sacramento, California, will also assume about $2 billion in debt. McClatchy plans to sell 12 Knight Ridder newspapers, including the Philadelphia Inquirer, San Jose Mercury News and St. Paul Pioneer Press.”

Sunday, March 12, 2006:

Knight Ridder Newspaper Chain Agrees to Sale
The New York Times
In a story for Monday’s paper posted to its Web site at 9:43 p.m. Sunday, The Times reported:

“Knight Ridder, the nation’s second-largest newspaper company by circulation, agreed last night to sell itself for about $4.5 billion in cash and stock to the McClatchy Company, a publisher half its size, according to people involved in the negotiations.” 


Earlier reports:


Knight Ridder board’s decision could be announced Monday
3/11/2006, 12:34:09 PM

Report: McClatchy emerges as leading bidder to acquire KR
3/10/2006 8:33:17 AM

Wall Street, journalists hope McClatchy has winning KR bid
3/9/2006 9:23:29 AM

Life As the Accidental Aggregator
3/8/2006 5:58:17 PM
What’s the value of Knight Ridder’s papers in Philadelphia?
2/27/2006 9:00:13 AM

Singleton takes a look at KR’s newspapers in Philadelphia
2/24/2006 10:41:56 AM

Analysts cautiously speculate KR might sell for $70 a share
2/23/2006 10:31:31 AM


Cassidy: Mercury News is more than a job for many of us
2/21/2006 9:15:57 AM

Media analyst puts the odds of a Knight Ridder sale at 60%
2/20/2006 8:05:25 AM

Cheney Chatter; Cartoon Controversy; Press Expectations; & More This Week in Media
2/16/2006 10:40:32 PM By Poynter Institute

KR rules could force buyer to win 80% of shareholder votes
2/13/2006 7:17:08 AM

Fine: A KR sale saga Hollywood ending would look like this
2/10/2006 7:04:56 AM

Knight Ridder staffers try to stay focused during sale talks
2/9/2006 1:27:10 PM



SPJ seeks national discussion about public-service journalism
1/26/2006 8:21:43 AM

McClatchy CEO declines to discuss KR during earnings call
1/25/2006 2:41:08 PM


A Bad Year for Newspaper Stocks, A Worse Year for the Gray Lady
1/13/2006 9:46:10 AM By Rick Edmonds

Knight Ridder to meet with potential buyers this week
1/9/2006 9:21:37 AM

Journalism’s Highlights and Lowlights
1/3/2006 4:24:29 PM

KR says it will only consider offers for the whole company
12/28/2005 10:51:35 AM

KR CEO Ridder is “terribly depressed” about possible sale
12/25/2005 2:47:50 PM

Akron BJ reporter says KR drama is “so surreal in a way”
12/14/2005 10:34:52 AM


Letter from New York’s Media Week Meetings: In Search of a Little Cheer
12/9/2005 5:46:06 PM By Rick Edmonds

KR sale could reignite interest in the newspaper industry
12/7/2005 11:56:45 AM

Why Narrative Matters As Newspapers Struggle
12/5/2005 12:38:41 PM By Bill Kirtz

Shareholder seeks Knight Ridder sale, but who is buying?
11/29/2005 4:54:38 PM By Meg Martin

PCM’s push for a KR sale unrelated to performance targets
11/29/2005 7:48:06 AM

Yahoo gossip boards say Knight Ridder deal may be close
11/23/2005 5:40:18 PM

Knight Ridder and the “New Newspaper”
11/23/2005 1:51:17 PM

PCM might be pushing for a KR sale to collect $300M payout
11/23/2005 9:13:59 AM

KR says alums’ effort is well-intentioned but not practical
11/18/2005 4:38:48 PM

Newspaper Guild president concerned about “crisis” at KR
11/15/2005 11:30:41 AM

Why is PCM putting so much pressure on Knight Ridder?
11/14/2005 6:49:13 PM

Ridder to staff: Stay focused during these uncertain times
11/14/2005 12:42:23 PM

KR explores strategic alternatives, including company’s sale
11/14/2005 9:13:19 AM

Investor increases pressure on KR to put itself up for sale
11/10/2005 10:43:59 AM

KR spat outcome could write the future of print journalism
11/8/2005 7:49:04 AM

The Next Bad Thing? More Circulation Woes
11/5/2005 5:45:08 PM

“Shrewd” money manager’s KR move puzzles some analysts
11/4/2005 10:21:04 AM

Knight Ridder Update: Others Pile On
11/3/2005 8:44:06 PM

Knight Ridder issues brief statement regarding calls for sale
11/3/2005 4:49:24 PM

Another KR shareholder wants to discuss possible sale
11/3/2005 12:33:53 PM

KR critic isn’t surprised by pressure on chain to be sold
11/3/2005 9:08:24 AM

Pieces of Knight Ridder might attract some buyers, says WSJ
11/3/2005 8:51:09 AM

Most analysts say the sale of Knight Ridder seems unlikely
11/2/2005 11:34:04 AM

Knight Ridder’s largest shareholder calls for sale of company
11/1/2005 6:07:31 PM


Romenesko letters, memos, etc.:

Don’t write off the Newspaper Guild yet (Letters Sent to Romenesko)
12/30/2005 4:25:34 PM

Guild pursues “worker-friendly” buyout of KR (Miscellaneous items)
12/22/2005 3:39:28 PM

KR CEO Tony Ridder’s messge to employees (Memos Sent to Romenesko)
12/1/2005 7:27:24 AM

Philadelphia negotiations postponed (Memos Sent to Romenesko)
11/29/2005 11:48:03 AM

Why short-term vision wins out (Letters Sent to Romenesko)
11/21/2005 3:29:54 PM

Chicago Tribune to cut “fewer than 100” jobs (Memos Sent to Romenesko)
11/16/2005 7:51:21 PM

An idealist’s suggestion (Letters Sent to Romenesko)
11/16/2005 11:27:30 AM

One can always dream (Letters Sent to Romenesko)
11/15/2005 12:17:08 PM

Ridder letter to KR employees (Memos Sent to Romenesko)
11/14/2005 11:37:03 AM

KR, war coverage and political contributions (Letters Sent to Romenesko)
11/2/2005 2:55:16 PM

Re: Selling Knight Ridder (Letters Sent to Romenesko)
11/2/2005 1:07:13 PM

How will KR top its latest earnings report? (Letters Sent to Romenesko)
10/14/2005 2:30:24 PM