McClatchy Unloads 4 Knight Ridder Pubs
McClatchy announced Thursday that it has reached a deal with MediaNews and Hearst Corp. to sell four of the 12 Knight Ridder publications it plans to divest for $1 billion. Under the deal, MediaNews will purchase the San Jose Mercury News (which until last fall published the Spanish-language weekly Nuevo Mundo) and the Contra Costa Times (which publishes Spanish-language weekly: Fronteras). Hearst will acquire the Monterey Herald and the St. Paul Pioneer Press.
Interestingly, Hearst will be turning over management of the Monterey Herald and the St. Paul Pioneer Press to MediaNews in exchange for an equity investment in MediaNews' assets outside of the San Francisco Bay Area including the Denver Post and approximately 40 other papers. Specific terms of the equity arrangement were not disclosed.
Although McClatchy's CEO Gary Pruitt emphasized his company's commitment to finding “the right home” for the Knight Ridder publications McClatchy plans to divest, the deal has caused serious concern among Newspaper Guild members, who characterize the deal as being “bad news for newspaper workers, readers, advertisers, and for our communities.” The Newspaper Guild called an emergency meeting of its members Wednesday afternoon to discuss their options for putting a stop to the deal.
At issue is the bid made by Yucaipa Corp for all twelve displaced Knight Ridder publications. Newspaper Guild members charge that Yucaipa's bid was not given due consideration, and that the MediaNews/McClatchy deal for the four publications “…really does smack of a back-room deal,” according to Guild President Linda Foley.
The Newspaper Guild has announced plans to involve government agencies who regulate corporate ownership, and McClatchy announced on Wednesday that it had received a request from the Department of Justice for more information regarding the acquisition of Knight Ridder, which is due to be finalized this summer.
Knight Ridder is however retaining two major Spanish-language dailies, Miami's El Nuevo Herald and Dallas/Ft. Worth Diario La Estrella.
The news is the latest chapter in the firestorm that erupted when McClatchy announced its acquisition of Knight Ridder in March of this year, and its planned divestment of the 12 publications in question.
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