Wednesday, March 15, 2006

Corporate Takeovers and Heartbroken Former CEOs

McClatchy buying Knight-Ridder; Selling 12 papers
Reuters, March 13-15, 2006

McClatchy will pay $40 cash and 0.5118 Class A shares for each Knight-Ridder share. The deal values Knight-Ridder at $67.25 per share, above its closing price of $65 on Friday.

Knight Ridder's sale process underscored the difficulty U.S. newspaper publishers have faced in a weak advertising market and in trying to compete with Internet news sources, diminishing margins and a series of circulation scandals...

...McClatchy, whose own publications include the Sacramento Bee and Minneapolis Star Tribune, said the combined company will become the No. 2 U.S. newspaper chain based on a daily circulation of about 3.2 million people. It will operate 32 daily newspapers and 50 non-daily publications after the sale of 12 Knight-Ridder papers -- including some of its best-known titles such as the Philadelphia Inquirer and the San Jose Mercury News...


So McClatchy's breaking up the band.

Of Knight-Ridder's major papers, more than a third are rumored to be headed for the auction block.

Publications reportedly for sale include Akron's Beacon-Journal, the San Jose Mercury News, both of Philadelphia's major dailies, the Wilkes Barre (Pa.) Times Leader, and the Contra Costa (Calif.) Times.

With the deal now finished, former Knight-Ridder CEO Tony Ridder is expressing regret over the corporate takeover. According to the New York Times, he'll get a hefty multimillion-dollar severance deal that includes stock options.

Gee, Tony. Glad to see you spent at least some of your time negotiating retirement packages for employees, some of whom could end up getting the ax at 12 of the papers your company once controlled.

I'm sure you're personally devastated.

Of course, all those greenbacks must make life at least...bearable.

Knight-Ridder, once the number-two newspaper publisher in the country, has long been in financial trouble. As part of the acquisition, McClatchy will absorb $2 BILLION in corporate debt.

I'm sure it was all those greedy newspaper delivery guys, with their fancy twice-used cars and trendy fast-food only diets, that racked up the debt. And those pesky section editors. If only they'd bought less doughnuts for their interns on Fridays...

McClatchy is pledging to keep most of its workforce intact, but will merge different divisions. We shall see. But at least 12 newspapers across America, I'm certain there are a lot of folks polishing their resumes.

It's news items like this that remind me of why, exactly, I left journalism. Local media outlets, once the bread-and-butter of the news business, are now nothing more than the bargaining chips of corporate takeovers and the whores of a parent company's investors.

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kendra said...

it's interesting to see mclatchy becoming a bigger player in the publishing world, because they always struck me as a quaint central valley thing. for a long time the sacramento bee was their biggest paper, and i think the modesto bee was the only other paper of note. for some reason we get the san jose mercury news at work and it's just crazy to see the level of panic going on there, though it's understandable. who knows what's going on- just a few months ago there was talk about lots of growth with the paper.

The ZenFo Pro said...

I almost went to work for both Knight-Ridder and McClatchy, hence my sarcasm...

Yeah, they were No. 9 in terms of ownership. But K-S has made some completely batshit decisions. Led to their downfall.