Knight Ridder gets an ultimatum

[Judi Lynn]

Knight Ridder gets an ultimatum
John Reinan, Star Tribune
November 2, 2005


A large investor is demanding that Knight Ridder Inc., the nation's second-largest newspaper chain, put itself up for sale or auction off its flagship publications, which have wrestled with flat advertising revenue and stagnant or declining circulation.

In a letter Tuesday to the Knight Ridder board of directors, the investment firm Private Capital Management (PCM) threatened to launch a hostile takeover if the company does not move to "aggressively pursue" a competitive sale.

It's too early to say whether any suitors will emerge for Knight Ridder or whether PCM will be able to make good on its threat to oust a majority of the company's directors, but Tuesday's disclosure -- and the potential that it could trigger more mergers or consolidation -- could cause investors to take a new look at newspaper stocks.
(snip)

"There's always been a tension between journalism and business, but in the last decade, business has been very much predominant," the Poynter group's Naughton said. "The mystery to me is why communities don't rise up in anger at what's being done to their media in the name of profit."
(snip/...)

http://www.startribune.com/stories/535/5702434.html
(Free registration required)

[greenman3610]

1. knight-ridder has always been spot on the money about Iraq

one of the only news organizations that was right
from the get go.

[psychopomp]

2. That's right

I am sorry to hear that they are under the gun themselves now, so to speak.

[salin]

3. Their main reporters stated that because they never had

great access to the WH in the first place, they a) had better access to mid-level career folks who had a longer view point than the political appointees serving as political spin meisters; and b) the WH couldn't threaten them with cutting off their access to the WH due to their critical reporting.

I hope that they can work this problem out.

[Kolesar]

5. Was K-R shunned by the WH, or was it just coincidence?

I recall during the lead up to the war that I could find accurate reporting at www.ohio.com , which is the Knight Ridder newspaper, the Akron Beacon-Journal.

[salin]

6. the main reporters on the iraq war buildup and war never

had access to begin with, iirc. In the end that gave them better access to less tainted sources, and immune to threat of "shut out".

[Kolesar]

8. So dumb luck propelled them to excellence

Like some plot from Forrest Gump. Ok, I will admit that is a bit of a stretch.

[xchrom]

4. ''why communities don't rise up in anger ''

naughton seems to be in the dark about the character of the american people if he's wondering about why people don't get excited about what's in their news and who runs their newspapers.

this is tabloid america -- and we are as shallow as some suspect we are.

[Orsino]

11. Becasue the forces that subverted the media long ago...

...don't advertise their behavior. Communities are deliberately kept ignorant.

Without media to point out the problems with the media, no solutions will magically appear.

[powwowdancer]

12. sometimes I share

your cynicism, but in my rare, optimistic moments,I wish someone infuse me with a few cc's of hope. Just a reminder: not all ameriKKKans are fat, stupid, lazy, nascar-watchin', wife-beatin', church-going, god-fearin' queer hatin', ignorant, bass-ackward, bigoted, racist, rebel-flag-wearin', cross-eyed-fish-on-they-car-havin', shitty beer swillin', hate-mongerin', incestuous, fish-eyed fools. A lot are, to be sure, but there's still some hope. Hell, I live in a blue state in the buckle of the bible belt, (KY), and I still find myself occasionally surrounded by good, moral (I laundered the Conservative stain from that word first) citizens of conscience. Hang in there, sometimes, against all odds, the good guys win.

:dem:
powwowdancer out

[punpirate]

7. Private Capital Management are...

... a bunch of Bushbots. From opensecrets.org:

BRANN, AARON C MR
NAPLES,FL 34109
PRIVATE CAPITAL MANAGEMENT/FINANCIA
8/27/2004
$300
Bush, George W

FARLEY, JOSEPH J
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/ANALYST
4/26/2004
$2,000
Socas, James Robert

FARLEY, JOSEPH MR
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/ANALYST
11/6/2003
$2,000
Bush, George W

FELDMAN, MICHAEL A MR
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/INVESTME
11/7/2003
$2,000
Bush, George W

JOYCE, DAVID G MR
NAPLES,FL 34109
PRIVATE CAPITAL MANAGEMENT/FINANCIA
11/6/2003
$2,000
Bush, George W

MC KEAN, PAUL F MR
NAPLES,FL 34105
PRIVATE CAPITAL MANAGEMENT/INVESTME
11/7/2003
$2,000
Bush, George W

MEADE, TOM
DENVER,CO 80206
PRIVATE CAPITAL MANAGEMENT
10/8/2004
$2,000
Coors, Peter

POWERS, GREGG J MR
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/PRESIDEN
4/8/2004
$25,000
Republican National Cmte

POWERS, GREGG J MR
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/INVESTME
11/7/2003
$2,000
Bush, George W

SHERMAN, BRUCE MR
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/CEO
4/8/2004
$25,000
Republican National Cmte

SHERMAN, BRUCE S
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/C.E.O.
1/21/2004
$500
Mack, Connie

SHERMAN, BRUCE S MR
NAPLES,FL 34108
PRIVATE CAPITAL MANAGEMENT/CEO
11/6/2003
$2,000
Bush, George W

SMITH, BRIAN
EAGAN,MN 55123
PRIVATE CAPITAL MANAGEMENT
2/26/2002
$250
Coleman, Norm

SMITH, PATTI
EAGAN,MN 55123
PRIVATE CAPITAL MANAGEMENT
9/9/2002
$500
Coleman, Norm

Here's what the CEO told the NYT in 2001:

Value investors are feeling vindicated by the collapse of the new economy stocks. One such investor is Bruce S. Sherman, chairman and chief executive of Private Capital Management. In an interview Friday, Mr. Sherman said: "Newspapers are a cash cow. They are good businesses with huge discretionary cash flows."

When investors, looking ahead to bad times, began to sell enough shares to depress newspaper stock prices, Mr. Sherman and others stepped in. He now holds about two million shares of Knight Ridder in his funds, much of it bought in the second half of 2000. Since during the second half of 2000, the stock price never exceeded Friday's closing of $57.94, he is ahead of the game.


Knight-Ridder closed Tuesday at $58.00, so it's been holding its value, and they have been paying dividends in the past. Sounds like Mr. Sherman either has an agenda, or he's getting greedy, or both.

[katty]

23. Poppy's bots called PCM...get rid of Knight

[peacetalksforall]

41. An agenda or greedy or both? BOTH - the right wing does not lie,

kill, steal if they can't benefit in two or more ways. That is why they have so many think tanks. Do you think that PNAC and the cabal does not share their plans with their think tanks so that they can figure out all the contingencies, benefits, and further money making opportunities that result from a plan? They need huge amounts of $$$ to carry out this war on the world. It is their mighty war and it isn't cheap. Fascist imperialism carries a hard price.

[Demeter]

9. Punishing The Non-Conformists?

Is Knight Ridder being punished for doing its real job, and not being a Bushbot Lackey?

[Francine Frensky]

10. "mystery...why communities don't rise up in anger"

It's no mystery. It's because they don't even KNOW what's happening. The story of journalism being bought and paid for is a story that nobody knows.

[cantstandbush]

13. KR should just start a blog and ask for donations. n/t

[senegal1]

14. What about becoming an employee owned business?

Link to
America's Largest Companies That Are 50% or More Employee-Owned Through an ESOP, Stock Purchase Plan, or Other Broad-Based Ownership Plan



<http://www.nceo.org/library/eo100.html>

[mia]

15. Help. How can I buy some Knight Ridder stock?

Will that help? Can't let them go down.

[blm]

25. I think that's an excellent call. And any wealthier folks at DU should do

the same.

Or contact the Dem mega guys who can buy the company.

It's not that the company isn't profitable...it IS...the problem is the UNDUE pressure for higher profits from scumbags like Sherman, knowing that it cuts quality in favor of the unrealistic expectations from the busybodies who don't WANT quality.

[GoddessOfGuinness]

34. What if those of us who don't have big $ pool our resources...

Is that possible?

[blm]

35. I think every bit helps, but we should hope like heck a GOOD GUY BUYS THEM

OUTRIGHT. This news organization needs to continue doing their serious work unhindered by corporate pressures.

[Cha]

16. This is what blm was talking

about, yesterday!

"IMPORTANT ALERT: BushInc may be making move to take down KnightRidder.
Edited on Tue Nov-01-05 06:29 PM by blm

"I have been posting about the strange situation going on with the plunge in KnightRidder stock and the odd sell-offs since they broke the Downing Street Memo story, along with their relentless coverage of the WH's cooked intel books. They have been doing the job covering the Bush WH that the NYT and WP have refused to do the past 5 years.

I had the hunch that BushInc was retaliating by getting corporate advertisers to pull. We all know about the KnightRidder reporters in Iraq who were killed "accidently" by US military snipers.

I have now heard that KnightRidder's largest stockholder is demanding that KnightRidder be put on the auction block.

I have no idea who it is, but the connex are Private Capital Management and Legg-Mason.

Please see what you can scare up on this. And please alert Media Matters. This is a BIG one gang.

If we lose KnightRidder to the Bush cronies, we are in deep shit."



http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=5234721

[sinkingfeeling]

17. Knight Ridder is the only remaining, decent mainstream news source.

[mia]

18. Why don't communities don't rise up in anger?

"The mystery to me is why communities don't rise up in anger at what's being done to their media in the name of profit."

What can we do?

[redqueen]

19. I wonder as well... what should communities do?

:shrug:

[JPZenger]

20. Knight Ridder Has Provided Excellent Coverage

I read the Phila. Inquirer every day, which is a Knight-Ridder paper. Knight-Ridder was the ONLY mainstream news source that had accurate stories about what was going to happen in Iraq - before they happened. Their investigative reporters saw through the Bush Administration spokescreen from the very beginning. They also are still providing excellent independent news reporting on domestic and international issues.

It would be a crime if a bunch of GOP investors are able to break apart this excellent independent news source.

[Up2Late]

21. "...why communities don't rise up in anger..."!?! Oh come on! Get a Clue!

The only people, with any money, who still read the "hard copy" of newspapers are RW Conservatives. They are NOT going to rise up against themselves.

No wonder they are dying, this is a effort to reign in more so-called "left-wing" Newspapers and add them to the RW, Government controlled propaganda like we saw last week.

If this happens, kiss the last bit of U.S. press freedom good-bye.:cry:

[blm]

39. Exactly why we can't let this story drop.

We will be GENUINELY FOCKED if KR gets broken up into the little pieces that Sherman wants.

[anotherdrew]

22. rise up in anger and do what?

[Chicago Democrat]

27. Get all your news from a weblog?

that's what I do.

:)

[anotherdrew]

30. unfortunately a large percent of the country can barely use a computer.

and by barely I'm being generous. Still a huge percent don't have one, and/or can't afford internet access. The "digital divide" is still an issue. Hopefully grassroots orgs can keep building machines and holding classes for ever more people. Look at freegeek in Portland, OR as an example of that.

[cascadiance]

24. Hmm... Ted Turner? Maybe he could come to the rescue?

Get his money out of AOL and into Knight Ridder! I bet he could help build up their centralized news business more too, which would strengthen the Washington Bureau more and perhaps make it something that he could be proud of instead of what CNN has devolved to now. They right now are pretty decentralized in management, with a lot of VP's managing their different newspaper properties much more independently than other news operations have. At least they were that way when I worked for them back in 2001.

[JPZenger]

26. Why the GOP Wants Knight-Ridder Dead

A few months ago, there was an interview on NPR with an author of a book about news coverage leading up to the invasion of Iraq. He said that the only main stream media reporters who had the story correct about WMDs, etc. were at the Washington Bureau of the Knight-Ridder chain. He said they provided accurate stories because they did NOT have access to the top Bush Administration officials. Instead, their reporters talked to the mid-level career government and military officials who knew the truth. Because Knight-Ridder officials did not have regular access to the top guys, they also were not fearful that they would lose that access.

I remember reading each of their stories in 2002 and 2003 in Knight-Ridder's Philadelphia Inquirer, and being amazed that I did not read the same information in other sources. They reported on how the State Department experts were being completely shut out of the reconstruction planning. They reported on the questionable WMD evidence, the questionable Iraqi "defectors", the questionable character of some of the Iraqis that the U.S. wanted to put into power, and the attempts to twist U.S. intelligence to meet political goals.

Here are some links to some of their stories. These stories have now been proven to be correct. They deserve a belated Pulitzer.

All of the following stories and more are available at:

http://www.realcities.com/mld/krwashington/news/special_packages/iraq/intelligence/7132720.htm

February 2002: Bush Has Decided to Overthrow Hussein

February 2002: Chalabi Suspected of Misusing U.S. Funds

March 2002: Iran, Not Iraq, is Top Terrorism Sponsor

Sept. 2002: Lack of Evidence of Iraqi Weapons Worries Officials

Oct. 2002: Some in Administration Have Misgivings About Iraqi Policy

Oct. 2002: Analysts Split About Iraqi Nuclear Threat

Oct. 2002: Infighting Between Intelligence Agencies Fuels Iraq Disputes

Sept. 2003: No Real Planning for Post-War Iraq.

-------
All newspapers are financially stressed now because: 1) newsprint is at its highest price ever, 2) younger people are not reading them, 3) more people are reading the online editions and therefore are not seeing the print ads, and 4) classified ads were the most profitable part of the newspaper, but they have moved to monster.com, craigslist, etc.

[blm]

36. I'd say put Ted at the top of the list for DUers to IMPLORE and BESEECH.

.

[JPZenger]

28. 19% profit margin

In 2004, Knight-Ridder had an operating profit of $585 million on revenues of $3.0 billion. That is a measely 19% profit margin.

Here's ownership info. It is diversified ownership, including many mutual fund companies, except for the 10% reported to be owned by the group pushing for a hostile takeover:

http://finance.yahoo.com/q/mh?s=KRI

[anotherdrew]

31. if 19% isn't enough, our financial lords will have to end the grocery biz

seems to me K-R stock is doing just fine.

[JPZenger]

29. Threat of piecemeal sale

The investment group is threatening to sell off the papers individually to other chains. That would be end of Knight-Ridder's award-winning national investigative journalism.

Instead, they can turn into newer versions of US Today, where you keep looking for the continuation of a news article ... but there is none.

[anotherdrew]

32. Look, isn't there something we can do to PCM?

are they completely unassailable in this?

[Blue_Tires]

33. my job prospects in journalism go farther down the drain

nt

[Judi Lynn]

37. Shareholder seeks Knight Ridder sale, but who is buying?

Shareholder seeks Knight Ridder sale, but who is buying?
11/2/2005, 6:15 p.m. ET
By SETH SUTEL
The Associated Press

NEW YORK (AP) — Money manager Bruce Sherman, a 19 percent shareholder in Knight Ridder Inc., wants the newspaper publisher to put itself up for sale. But with newspaper stocks so far out of favor with investors this year, the question arises: Who might be interested in buying it?

Sherman, who heads up the Naples, Fla.-based investment firm Private Capital Management, fired a shot across Knight Ridder's bow on Tuesday, sending a letter to Knight Ridder's directors demanding that they "aggressively pursue" a sale or face dire consequences, including a drive to shake up the board or management.

Sherman has been a longtime investor in newspaper stocks, accumulating an average position of nearly 10 percent in nine leading newspaper companies, according to a recent research report by Morgan Stanley analyst Doug Arthur. Until now, however, Sherman has remained quiet about his intentions as he added to his positions in major publishers like Gannett Co., New York Times Co. and McClatchy Co.

Sherman's firm manages about $30 billion for wealthy individuals, and he is known as a savvy investor in value stocks, or ones whose value is underappreciated in the market. Legg Mason Inc., a Baltimore-based investment company, bought his firm in 2001 for an initial cash payment of $682 million with performance incentives that could raise the deal's final value to $1.4 billion.
(snip/...)

http://www.pennlive.com/newsflash/pa/index.ssf?/base/business-4/113096844395980.xml&storylist=penn

[blm]

38. Sherman wants KnightRidder sold in little pieces to hurry its demise as a

real investigative news force.

[NashVegas]

40. related: Knight Ridder's Tom Lasseter Offers Voice of Truth in Iraq

NEW YORK "Soldiers are constantly surprising me," says Tom Lasseter, 29, the longtime Baghdad correspondent for Knight Ridder. Lasseter spoke to E&P in early October, shortly after getting off a helicopter and a five-day embed with a 3rd Infantry Division sniper team. Their mission was to hunt for insurgents on the back roads and in the palm groves of Muqdadiyah, a city in Diyala province. On the way out he passed a soldier reading a book by Noam Chomsky.

"That's a little seditious, isn't it, reading Chomsky here?" Lasseter jokingly asked the soldier.

"I'll tell you what's f---ing seditious," the soldier replied. "That I've been deployed here for three years."

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1001432616

[blm]

42. Damn straight, Crisco. This is how BushInc intends to get rid of the truth

.

[CarlWoodward]

43. My local paper

My local paper, the Ft. Worth Star-Telegram, is a Knight-Ridder paper and its does a pretty decent job. It prominently ran the K-R Iraq coverage on its front page and kept the heat on, even while the GOP house organ Dallas Morning News across town completely ignored the story and ran every Judith Miller pro-Bush article on its front page.

The Star-Telegram also just recently quite courageously editorialized against the anti-gay marriage proposition that will be on the Texas ballot next week. That's a brave stand for a newspaper to take here in Texas.

I REALLY hope Knight-Ridder can stay intact and independent - it affects everyone here in Fort Worth!

[Pryderi]

44. Report: Knight Ridder Has Hired Goldman Sachs to Explore Sale Options

By E&P Staff

Published: November 04, 2005 11:45 AM ET

NEW YORK One would imagine that the San Jose Mercury News, a Knight Ridder newspaper in the chain's hometown, would be on top of the new and rampant speculation spreading this week surrounding a possible sale or breakup of the company. If so, hang on to your hat.

The paper's Chris O'Brien reports Friday that a source has confirmed Knight Ridder's hiring of investment bank Goldman Sachs to study the various strategies it could pursue. "With shareholders who control more than 35% of its stock now speaking out, analysts said Knight Ridder Chairman and CEO Tony Ridder needed to seriously consider the request to sell," O'Brien wrote. "If Ridder decides against a sale, analysts say he'd need to respond quickly by offering an alternative

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1001434386