Knight Ridder Alumni

That’s the number of votes of Knight Ridder Inc. shareholders it would take to scuttle the sale to McClatchy Newspapers. I voted online, so all that is needed now is 20%. This is a bad deal – bad on multiple levels. Here is why I voted no:

Stock value. Under the terms of the so-called “merger,” McClatchy will pay $40 plus .5118 of a share in McClatchy for each Knight Ridder share. That’s not much of a bargain. The day I voted, McClatchy was at $46.15. That means the value of the deal would be $63.62 a share. Knight Ridder, even in its depleted, going-out-of-business-sale state, traded at $62.62. So this corporation is to be destroyed for a buck a share? Maybe that’d be enticing if you owned a million shares. Most of us don’t.

Competition. If the U.S. Justice Department had anyone with a nose in the antitrust division, surely there’d be curiosity about the stench coming off the deal in which McClatchy lateraled to Dean Singleton’s MediaNews Group the San Jose, Contra Costa and Monterey properties it was acquiring from Knight Ridder. They’d give Singleton a chokehold on the San Francisco Bay market. If that were not enough, the involvement in the transaction of Hearst – whose own San Francisco paper is the one that stands to be choked by the Singleton deal – should cause the Antitrust folks to do more than merely scratch their heads. So should the fact that other parties eager to bid on the California and St. Paul newspapers were not given an opportunity.

Independence. In announcing the sale of Philadelphia Newspapers Inc. to a local consortium of business people, McClatchy CEO Gary Pruitt said that his company considered not merely the speed and certainty of a sale but “the interests of stakeholders including readers, employees and the communities served.” That’s a remarkably charitable view of an ownership group with starkly defined commercial, political and religious vested interests. Look, these are some of the same people who worked to put the most secretive administration of my lifetime in office in Washington. Now they’re all for freedom of information? You might as well put Dick Cheney in charge of investigative reporting. Yes, Brian Tierney, the former archdiocese PR guy who organized the Philadelphia consortium, says they’ve all signed a pledge to respect the independence of the newsrooms and he will “beat the crap out of anyone” who violates the pledge. After which, perhaps, he will sell you the Ben Franklin Bridge.

Journalism. There are people whose judgment I respect who take consolation in the prospect that most Knight Ridder papers – that is, the 20 retained under the deal by McClatchy, and at least a few of the 12 orphans – will be better off in the hands of new owners. And it is true that McClatchy went into this deal with a reputation for integrity, probity and energetic newsgathering. If McClatchy really wished to pay homage to its heritage and that of John S. Knight, it would have made sure the castoff newspapers went to owners of comparable quality. Instead, McClatchy is crowing that it got a better multiple in the sale of eleven papers (Wilkes-Barre still is unsold) than it paid for Knight Ridder as a whole. It’s hardly unusual for a public corporation, but it turns out McClatchy’s top priority is its bottom line.

So I’ve voted my measly shares against the sale of Knight Ridder to McClatchy. This is a gesture. No one else needs to copy it. If others do, and if their votes should total more than 20 percent of the Knight Ridder shares, wouldn’t that be interesting? Maybe then we could reform the Knight Ridder board, put new leadership in the executive offices and demonstrate once again what John S. Knight stood for.