Knight Ridder

Originally posted on March 13, 2006

I've had some people ask me whether the sale of Knight Ridder directly affects my job. The immediate answer is no. The parent company of the newspaper I work for was reportedly going to bid on the sale, but now it appears we may have never submitted a bid at all. Instead, McClatchy bid a whopping $67.25 per share and is taking a major leap from 10th-largest chain in the country to second largest.

At the same time, McClatchy is going to be taking on $6.5 billion in debt (that's how much they paid for the purchase). To help ease this burden, it's going to divest about a dozen papers, including the Philadelphia Inquirer, the Contra Costa Times and the San Jose Mercury News.

A little background: The company I work for is a major competitor of the CC Times (not so much the Merc because we don't really overlap their territory). The Times covers a much larger area of Contra Costa County than we do, although we have been wanting to get coverage in that area for ages and have been stymied by lack of resources. Therefore, we'd love to acquire it to increase our coverage area and revenue.

Basically, all we would have wanted from the sale is the CCT. I'm not sure why, but I kept hearing we're not even interested in the Merc. If you ask me, the Merc would be a great asset to the company. It has award-winning graphics and design (which we sorely need), and a plethora of resources we don't have. Why would we not want that? I mean, it's one thing to want to bump off your competition, but at the same time, c'mon...jump at a great opportunity to get some resources and quality!

Anyway, that brings me around to the divestiture of the dozen papers. I hear we are an interested bidder on the CCT, and wouldn't ya know, our top guy just happens to be in town. I also heard a rumor that we're interested in the Inquirer, but that rumor has fewer legs than everything else I've heard. So, it appears we may have skipped on bidding for all of KR in order to work a deal with McClatchy to get some divested papers.

What sucks about this whole thing is the roller coaster my friends at the CCT have had to endure. They don't know what's going to happen to their jobs, and now they have to keep waiting until this divestiture is done. I've been told everyone over there is looking for new employment. No one can say what my company would do if we got control...layoffs? Keep everyone? Consolidate? We are notorious for running very lean, so no one can rule out layoffs as an option.

Also, I'm really annoyed with how in every article I read, it talks about McClatchy being known for a "greater commitment to journalism." McClatchy is beset with budget problems, just like us. They have to pay attention to money too. To imply we don't have a commitment to journalism is BS. Anyone in the company right now can tell you that independent of this whole Knight Ridder soap opera, we've been trending -- if anything -- towards a greater commitment to journalism via Readership Institute guidelines/suggestions, management training, more in-depth packages (several of which are VERY good, if you ask my opinion, and have won awards), a Web site redesign (which I think is excellent and more user-friendly), multimedia packages and training, etc. In five years of employment, I think this past year to year and a half has been the most productive and progressive. Not all of these things may be apparent to people on the outside, but from within, we are taking major steps to bring ourselves in line with our competitors. Including McClatchy. Hey, newspapers are businesses. We have to focus on journalism as well as advertising and bringing in money. Is that to say McClatchy's "greater commitment to journalism" means they worry less about the money-making aspect of newspapering? If so, that would worry me as an investor.

Which reminds me that my friends in the Bee family (McClatchy-owned) are also uncertain as to whether this purchase is a good thing. It's widely known that McClatchy is going to have to pare things down in order to make up the money they're spending on Knight Ridder. And people at the Bee's aren't sure whether that's going to mean changes or cuts in their newsrooms too.

All in all, while it would have been nice if we had bought up KR, I'm kind of glad we're sort of sitting on the sidelines right now. It lends a degree of certainty to things for us, to be honest. We can't handle any more budget cuts...we're almost trimming into the muscles already...but the way the money that's there is being spent is in some ways better than in recent years. Of course, I haven't had a raise in a loooooong time...in fact, I think I've only gotten one merit raise in 5 years, and it amounted to $50 more a week...but I could reallllly use a new work computer and software that was made after 1986 (preferably not DOS-based, thanks)...which we should be getting soon. So, in a way I guess it's good that we're not throwing down $6.5 billion on a purchase.

Although, guilty...I would really like to see us acquire the CCT. Something about triumphing over your competition is really appealing. Not to mention it would finally validate my not having jumped ship when everyone else did. For which they continue to laugh at me. But I still love 'em.

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