The Knight Ridder newspaper chain has a proud history with a troubled recent past. Its 32 papers have won 84 Pulitzers, many of them for investigative reporting, biting commentary and lively features.
But the company also has endured wave after wave of budget cuts as it attempted to placate investors seeking greater profits. And now its own story is coming to a close.
Under pressure from investors, the company’s board has approved a sale to the smaller McClatchy newspaper company for $4.5 billion in cash and stock.
McClatchy is well regarded by journalism purists and Wall Street analysts alike. But anxiety remains at a dozen Knight Ridder papers.
Marie Ridder is a former newspaper reporter and a member of one of the families that once controlled Knight Ridder. She was in a good mood this morning when McClatchy announced the purchase.
"They run reliable newspapers," Ridder said. "They are newspaper people of high integrity -- unlike almost anybody else."
But her joy curdled when she learned that McClatchy wants to turn around and sell 12 of the newspapers.
Those newspapers include some of the biggest and the most prestigious in the chain: the San Jose Mercury News, The Philadelphia Inquirer, as well as the first Knight newspaper and one of the earliest Ridder papers. For Marie Ridder, the sale takes on a personal cast.
"Akron was, of course, where Mr. Knight started -- and St. Paul was where we started," she said, referring to the Beacon-Journal and the Pioneer Press, respectively. "So that's sort of too bad."
Knight Ridder had slashed newsroom budgets in recent years at its larger papers as circulation and advertising revenues declined. The company sought to shore up profit margins to appease Wall Street investors. But it didn't work. Knight Ridder's biggest investors forced CEO Tony Ridder to sell.
Knight Ridder's corporate secretary, Polk Laffoon, says the papers that remain with McClatchy will be in good hands. But he says the fact the company will disappear is hard to absorb. "Emotionally, here at the corporate headquarters, this is a sad and difficult day," Laffoon said.
But McClatchy has successfully pursued a strategy of buying newspapers with high profits in growth regions.
"We considered this possible acquisition as we do every potential acquisition -- with a cold, hard eye focused on our exacting and long-standing criteria," McClatchy CEO Gary Pruitt told investors and analysts on a conference call Monday morning.
Pruitt said the company expected to make no layoffs in any of the newsrooms of its new papers -- which will include The Miami Herald, The Kansas City Star, the (Fort Worth) Star-Telegram and The Charlotte Observer.
McClatchy already owns respected and flush papers in Minneapolis, (the Star Tribune); Sacramento (The Bee); and Raleigh, N.C. (The News & Observer).
Because of the profitability of its old papers and new acquisitions, Pruitt said, McClatchy could continue to invest in quality journalism. "The stakes have never been higher for newspapers and journalism in this country than they are today," Pruitt said. "And we dare not go into battle with anything less than the best and strongest company we can create."
The fate of the papers that don't fit McClatchy's formula remains unknown. That doesn't sit well with Jim Naughton, the former executive editor of The Philadelphia Inquirer.
"It's very disconcerting if they are going to sell those papers to companies or individuals or who knows what in cases where the quality may not be assured," Naughton said.
The challenges facing Knight Ridder are confronting the industry as a whole. The Washington Post is cutting its newsroom staff by roughly 10 percent. McClatchy intends to sell all the Knight Ridder papers with newsroom unions. They're considered more costly to run. The union -- the Newspaper Guild -- has already lined up private backers to try and buy them.
But current and former media executives say there may already be a buyer in place. Denver-based Media News has expressed interest in the papers in Philadelphia, San Jose and St. Paul. And these executives say Media News is interested in the profitable Contra Costa Times because it has other papers in Northern California – The Oakland Tribune and a chain of smaller Bay Area publications.
McClatchy has announced it will sell the Contra Costa Times, too -- which would only sweeten a larger deal involving Media News.