The McClatchy Co. would become a major presence in Washington state?s news industry if its plan to buy Knight Ridder Inc. is approved, a development that several media analysts found encouraging.
There was no indication that the $4.5 billion deal would have any immediate impact on the two Knight Ridder papers that McClatchy will be taking over in Washington ? The Bellingham Herald and The Olympian in Olympia. McClatchy is also to assume Knight Ridder?s 49.5 percent stake in The Seattle Times, but that seemed unlikely to affect that paper?s legal fight with the Seattle Post-Intelligencer.
Dmitri Iglitzin, a lawyer with Seattle?s Committee for a Two-Newspaper Town, said Monday that McClatchy?s strong reputation is good news for the state. McClatchy, based in Sacramento, Calif., already owns two dailies here, The News Tribune of Tacoma and the Tri-City Herald in Kennewick.
?McClatchy has shown more strength as a newspaper chain,? he said. ?We want companies here that are committed, that are creative about how to keep newspapers? circulation high and how to keep them relevant.?
Philip Meyer, a former Knight Ridder executive who is now the Knight Professor of Journalism at the University of North Carolina, said it was the ?best possible outcome? to Knight Ridder?s financial troubles that it be taken over by McClatchy. McClatchy uses a two-tiered stock system by which the family?s stock is valued 10 times as highly as its publicly traded stock.
?The family is very much in control,? Meyer said. ?That gives them immunity from the short-term interests on Wall Street ? the people who want to raise profits and reduce quality.?
It was complaints from investors about Knight Ridder?s financial performance that prompted the McClatchy deal.
Meyer, the author of ?The Vanishing Newspaper,? noted that as McClatchy family members die, their shares are converted to public stock, which means that eventually the family?s hold could be diluted. Over the next generation or two, though, McClatchy?s greater autonomy from Wall Street will give it more ability to experiment with its newspapers, which will be necessary as the industry tries to survive in the Internet age.
No such experimentation appeared to be on the table Monday. McClatchy assured newspapers there would be no editorial layoffs as a result of the deal, which is to be completed this summer. However, the company will sell 12 of the 32 newspapers it acquires from Knight Ridder. None of those 12 is in Washington.
For The Olympian, The Bellingham Herald and The Idaho Statesman in Boise, Idaho, the announcement meant the second ownership change in a year. Last summer, Gannett Co. traded the three papers to Knight Ridder in exchange for the Tallahassee Democrat in Florida and cash.
Olympian Publisher John Miller and Herald Publisher Glen Nardi said it was too soon to tell exactly what the McClatchy deal might mean for their papers, but they did not foresee major journalistic changes. Nardi noted that the Herald was mid-stream in transitioning to Knight Ridder?s business systems; switching now to McClatchy could be a bit of a headache from that perspective, but his staff is flexible, he said.
?Any time you transition to a new company there will be changes,? Nardi said. ?In terms of journalism, I don?t see many.?
Miller said one potential area of concern is that McClatchy will now own The Olympian and The News Tribune in Tacoma, just 30 miles away. But the two papers don?t compete directly very much, so it shouldn?t be a big problem, he said.
A big question mark remained Knight Ridder?s 49.5 percent stake in The Times. That investment, which dates to 1928, was considered an albatross: The minority stake provided little economic benefit and no power over the Blethen family?s majority stake. Knight Ridder Chief Executive Tony Ridder once said the chain would sell its share of The Times, but no one would buy it.
McClatchy will have just as tough a time finding a buyer, Iglitzin said. The Times, Knight Ridder and McClatchy declined to comment.
Iglitzin said it did not appear that McClatchy?s ownership of the minority stake would make a difference to the legal battle between The Times and the P-I. The Times is trying to dissolve its joint-operating agreement with the Hearst-owned P-I.