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Knight-Ridder Group

Overview

This profile considers the US Knight Ridder newspaper group, acquired and disassembled in 2006.


It covers -

  • introduction
  • the group
  • studies

Introduction

As of 2005 San Jose (California) based Knight was the second largest US newspaper publisher by circulation. (Gannett was numero uno.) It comprised over 50 newspapers across the US. In contrast to most of its competitors it had not expanded into broadcast or cable television and radio.

In 2005 Knight Ridder announced that it was selling the Detroit Free Press and Tallahassee Democrat to Gannett and acquiring the Boise Idaho Statesman, Olympia (Washington) Olympian and the Bellingham Herald from Gannett. In 2006, under pressure from funds managers and without a super-voting class of stock under the control of the founding families, it put itself up for sale. In March 2006 it agreed to sell itself for about US$4.5 billion in cash and stock to the McClatchy Company, a publisher half its size. McClatchy thereupon anounced plans to unload at least half of the Knight Ridder titles.

In April McClatchy announced that it would sell The San Jose Mercury News and The Contra Costa Times of California to MediaNews and a partnership that includes Gannett and the Arkansas-based Stephens Group. The Pioneer Press in St Paul and The Herald in Monterey County in California would be sold to Hearst, which would then transfer those titles to MediaNews in exchange for an equity stake in assets of MediaNews that are outside of the San Francisco Bay Area (ie The Denver Post and some 40 other papers).

In May McClatchy announced that the Philadelphia Inquirer and Daily News had been sold to local group Philadelphia Media Holdings for US$562 million. During the following month it announced agreement to sell the Akron Beacon Journal in Ohio (to Black Press for US$165 million), Aberdeen American News in South Dakota (to Schurz Communications), Fort Wayne News-Sentinel in Indiana (to Ogden Newspapers), Duluth News Tribune in Minnesota and Grand Forks Herald in North Dakota (to Forum Communications) for an aggregate US$450 million.

Knight's corporate site is here.

The group

As of 2005 the group published 32 dailies in 28 markets in the US: claiming around 8.7 million readers daily and 12.9 million on Sunday. It also published 26 non-daily newspapers, along with 'shoppers' and special publications.

Knight Ridder was formed in 1974 by the merger between Knight Newspapers Inc. and Ridder Publications Inc.

Knight dated from 1903, when Charles Landon Knight purchased the Akron Beacon Journal. Ridder Publications was founded in 1892 when Herman Ridder acquired the German-language Staats-Zeitung in New York. Both groups went public in 1969.

The merger created a company with operations coast to coast. The founding families had an insignificant share of stock by 2006 (chair Anthony Ridder for example had some 1.9%), with no super-voting shares on the model of the Washington Times and New York Times groups. Knight Ridder moved its headquarters from Miami to San Jose in California, apparently in an unsuccessful effort to gain some Silicon Valley gloss, but was criticised for low revenue growth.

Sale of the group was precipitated by Private Capital Management (PCM), Knight Ridder's largest shareholder - with 19% of the equity - in November 2005. PCM executive Bruce Sherman wrote to Knight Ridder's board commenting that stockholders had run out of patience. "We believe the board should aggressively pursue the competitive sale of the company," noting that otherwise PCM would consider joining forces with others to replace the board or "take other action to maximize shareholder value." The board responded by employing Morgan Stanley and Goldman Sachs for an auction. After initial interest from Gannett, MediaNews and private equity groups, only McClatchy made a formal bid. PCM appears to have made a trivial profit

An indication of holdings is here.

Studies

The major studies of Knight Ridder are Charles Whited's Knight: A Publisher in the Tumultuous Century (New York: Dutton 1988) and Knightfall: Knight Ridder And How The Erosion Of Newspaper Journalism Is Putting Democracy At Risk (New York: Amacom 2005) by Davis Merritt.

Broader academic studies include Leaving Readers Behind: The Age of Corporate Newspapering (Fayetteville: Uni of Arkansas Press 2001) edited by Gene Roberts, Thomas Kunkel & Charles Layton and The Menace of the Corporate Newspaper: Fact or Fiction? (Ames: Iowa State Uni Press 1996) by David Demers. Media critic Ben Bagdikian commented in 1967 that

trying to be a first-rate reporter on the average American newspaper is like trying to play Bach's Saint Matthew Passion on the ukelele. The instrument is too crude for the work, for the audience and for the performer.

In noting recent developments among the chains he suggested that the "press is greatly improved and may now be likened more to an acoustic guitar".

A perspective is provided by Dane Claussen's 1999 paper The Myths and Realities of Newspaper Acquisition Costs: Fiduciary Responsibilities, Fungibility of Assets, Winners' Penalties & Excess Cash "Problems".

For the Detroit Free Press see Bryan Gruley's Paper Losses: A Modern Epic of Greed and Betrayal at America's Two Largest Newspaper Companies (New York: Grove Press 1993).