By: Joel Davis
In September 2001, E&P published the first full-length profile of Gary Pruitt, CEO of the McClatchy Co. A little more than four years later, Pruitt has engineered the longshot purchase of much-larger Knight Ridder in a $4.5 billion deal.
Here is the 2001 cover story, which was entitled “Good as Gold.” Pruitt already was known as something of a “golden boy,” who was “charming… candid… self-effacing” but also a “bulldog.”
Gary Pruitt, head of the McClatchy Co., is nice even when he tries to tell you he’s not so nice. “I don’t shy away from making tough decisions,” he says softly. “But there’s no sense in trying to be a jerk.” Indeed, Pruitt, 44, who became CEO of McClatchy at the ripe old age of 38, can be tenacious, despite his reputation for niceness, a bulldog who somehow seems to get his way without stepping on toes.
Meticulously prepared, Pruitt essentially willed McClatchy, dismissed at the time as too small, into the bidding for the Minneapolis Star Tribune in 1998. He and the company emerged ? $1.4 billion and a lot of debt later ? with a paper that shot past the flagship Sacramento Bee to become the chain’s biggest, a bold, controversial move that propelled McClatchy from a regional to a national stage.
More recently, Pruitt gave his blessing, if not his input, to some tough front-page editorials in The Fresno Bee and The Modesto Bee ? McClatchy’s two central California papers ? that implored U.S. Rep. Gary Condit (who hails from that area) to resign because, they said, he had violated the public’s trust in the Chandra Levy matter. The editorials attracted national attention for their boldness in calling for the head of a moderate Democrat who long had won the backing of the moderately Democratic Bees.
“I did not play a role in changing the editorials or working with [the two papers] to come up with their position on Condit’s resignation,” says the boyish Pruitt, who rarely interferes with editorial issues. “However, I do think [the Bees] handled it well. I think the editorials were good.”
The Condit editorials are typical of both McClatchy tradition and Pruitt’s management style: Hire solid, skilled people ? and give them a lot of rope.
Editors in Condit country “know best what kind of paper is appropriate for people in Modesto, not me here in Sacramento,” Pruitt explains in his spotless, modern-appointed, blue-hued office in California’s sleepy, tree-lined capital city, headquarters of the McClatchy Co. “That doesn’t mean I’m excluded or that other people here at corporate are. We all participate.”
Dick LeGrand, The Modesto Bee’s opinion page editor, says that, while he agonized over the details of the Condit editorial, he did not look over his shoulder. “I’ve worked for McClatchy since 1969,” he says, “and I’ve never had any doubt about their support and backing of any journalistic activities.”
While Pruitt may not get a Christmas card this year from Condit, he is apparently revered by a broad range of others, from his employees to his competitors, including his wife, Abby, an attorney who says she knows better than to argue with him (“I lose–he’s very well-prepared in any argument”). Pruitt does, however, have a propensity to sing dopey 1960s jingles and novelty songs around the house to the embarrassment of his two daughters (“C’mon, Da-a-ad!”), ages 9 and 12.
“He’s one of the bright lights of the newspaper world, a bright, attractive, energetic guy,” comments New York Times Co. Chairman Arthur O. Sulzberger Jr., who has served on several boards with Pruitt. “McClatchy has a solid reputation and holds the same set of values I like to think the New York Times Co. holds.”
Well-versed in everything from high finance to classic literature to the Rolling Stones (“Gary has wide bandwidth” is how one McClatchy executive puts it), Pruitt is in the catbird’s seat at one of the most respected newspaper chains in the country. McClatchy is slowly but surely growing a stable of highly regarded dailies that have avoided layoffs and draconian measures in the current economic downswing by being fiscally conservative ? some might say too conservative ? during the flush times.
“We manage for downturns even in good times,” reasons Pruitt. “The idea is to remain lean and efficient even in good times so that we can ride out the bad times and avoid that kind of boom-and-bust scenario, which leads to numerous layoffs.”
While the dragging economy has hauled some publishers’ images down with it, Pruitt has quietly emerged as the industry’s Golden Boy. Resembling a blond Chevy Chase back in his 1970s heyday (another “Saturday Night Live” link: his low, deliberate timbre is a ringer for Al Franken’s), Pruitt is a charming, self-effacing figure who, when he strolls through The Sacramento Bee’s modest cafeteria for a veggie burger and yogurt lunch, wins smiles and hellos from everyone from the pressmen to the editors.
“The worst thing I can say about Gary is he’s not more outspoken on industry issues,” observes Chairman, CEO, and Publisher Frank A. Blethen of The Seattle Times, a paper that competes with McClatchy’s Tacoma, Wash.-based The News Tribune. “Gary’s a guy we need to hear from more often. He’s a wonderful mix. He has business understanding, but is also principled on diversity and journalism values and community issues.”
Mentioning another alleged fault, Sulzberger deadpans, “Gary is a lawyer, but I try to overlook that.”
Pruitt is indeed a lawyer: It’s how he made a name for himself. A native of Virginia, Pruitt grew up a space-race baby in Satellite Beach, Fla., in the shadow of Cape Canaveral and the Kennedy Space Center. He is the youngest of four children of a librarian mother and an Air Force veteran father who managed hotels after retiring from duty.
Pruitt, who celebrated his 15th birthday by camping overnight to see his beloved Rolling Stones at RFK Memorial Stadium in Washington, earned a bachelor’s degree in political science from the University of Florida. He then earned a master’s in public policy and a law degree at the University of California at Berkeley, where he once wrote jokes for money and stashed a wetsuit in his locker for bodysurfing, which remains a passion, along with tennis and jogging.
After working for a couple of years in First Amendment and freedom-of-information litigation at a private law firm, Pruitt joined McClatchy as in-house counsel in 1984.
It was there that Pruitt earned his stripes in the newsroom. He helped reporters and editors dodge libel land mines and defended McClatchy in a flurry of lawsuits, including a $250-million libel action brought by former U.S. Sen. Paul Laxalt of Nevada that was based on a Sacramento Bee story reporting illegal skimming of gambling profit at a Carson City casino owned by the Laxalt family. In the settlement, Laxalt got neither money nor a retraction from the newspaper chain.
Pruitt, on the other hand, earned a reputation. “When Gary first came, we had more lawsuits against us than just about any other newspaper company,” recalls Erwin Potts, whom Pruitt succeeded as McClatchy CEO in 1996. “He tackled them, and began getting rid of the lawsuits, and launched a preventive program that impressed a lot of people in the newsroom. &hellip He learns faster than maybe anyone I’ve ever known.”
While the McClatchy brass sensed they had a rising star, Pruitt says he loved being the house lawyer. Climbing the company ladder, he maintains, never entered his mind, and he “only reluctantly moved over to the business-operational side.”
In grooming Pruitt, Potts and the legendary C.K. McClatchy, who died while jogging in a Sacramento park in 1989 and was the last family member to head the chain, had the young attorney work in various positions in Sacramento before naming him publisher of The Fresno Bee (from 1991 to 1994), a job that Pruitt says was invaluable training for his current post.
“He did an excellent job there,” says James McClatchy, 80, corporate publisher and the senior McClatchy family member working for the company. James McClatchy says family members and McClatchy board members were in “total agreement” on anointing Pruitt the head of the company in 1996 after Pruitt served as vice president of operations in 1994-95. “He’s very bright, very fair ? he’s candid and cheerful,” adds McClatchy.
Go East, young man
Drawn to California by the Gold Rush, James McClatchy’s great-grandfather, also named James, founded The Sacramento Bee in 1857. The Fresno Bee and The Modesto Bee came along in the 1920s. The company later pushed north, acquiring the Anchorage (Alaska) Daily News in 1979, and The News Tribune in Tacoma in 1986.
McClatchy, which also owns several smaller papers (many were sold in the 1990s because they were viewed as more trouble than they were worth) bought The News & Observer in Raleigh, N.C., in 1996. This was a successful acquisition that Pruitt says set the table for the break-the-bank buy of the Minneapolis Star Tribune in 1998.
That deal, met with skepticism because it loaded McClatchy with a lot of debt ? Pruitt concedes he bet his career on it ? is now seen as a smart buy by industry observers. It expanded a company that was pulling in 90% of its revenue as recently as 1986 from California, which alarmed the company any time the Golden State fell into a recession, as it did for much of the 1990s.
The Star Tribune purchase “has been a dramatic change for the company. It was done consciously with the idea of having regional diversification,” Pruitt explains. While the deal is seen as a success, it has not been without its headaches. For starters, the Star Tribune has a formidable competitor in the neighboring Knight Ridder-owned Saint Paul Pioneer Press.
Competition is something most McClatchy papers are not very used to, as they are, often by design, the 800-pound gorillas in their markets. McClatchy has dominated north-central California with the three Bees for so long that the papers, which pay well and have relatively little newsroom turnover, are often resented as staid or arrogant (recent Condit editorials notwithstanding). Many of The Sacramento Bee’s columnists, for instance, are seen as politically correct “lifers” who tend to rehash the same right-and-relevant topics.
While the Star Tribune looks like a smart buy (“Minneapolis and Raleigh are marvelous acquisitions for anybody,” Frank Blethen says), the fact is that McClatchy’s biggest paper is also its current worst performer. In May, Star Tribune Publisher and President John Schueler abruptly resigned for personal reasons following the paper’s sixth straight down month in revenue.
Soon after, Schueler, well-liked in the Minneapolis business community, took a job as publisher of the Los Angeles Daily News. Neither he nor Pruitt will specify why Schueler left. “McClatchy is a first-rate company,” Schueler maintains. “I have nothing but high marks for them.” Adds Pruitt: The Star Tribune is “having the worst year of all of our papers ? that’s true. But John’s decision to resign had nothing to do with that.”
Did he jump or was he pushed?
While losing Schueler has a did-he-jump-or-was-he-pushed mystique, laying off employees is something McClatchy is loath to do. Pruitt is proud that his company has hired many women and minorities as publishers and for top editorial posts ? McClatchy has perhaps the industry’s best track record for diversity ? but also that he hasn’t had to hand out pink slips just to please shareholders.
He says layoffs hurt morale and ? when you factor in severance costs down the line ? the bottom line. It’s better, he says, to rely on attrition and voluntary departure.
“You never say ‘Never’ to layoffs because you never know what’s going to happen,” Pruitt observes. “But we would have to have a much more severe economic downturn to resort to layoffs. We are cutting expenses where we can and doing it by only filling essential jobs. What we’re trying to do is not put employees on a roller coaster of layoffs, nor our readers by cutting the quality of the paper[s], so we’re also maintaining news hole.”
While most industry observers have high praise for both Pruitt and McClatchy, at least one thinks they spend too much time in the slow lane when the economy is in the fast lane.
“One of the things that makes McClatchy less interesting is that, while they don’t tend to get hurt so much in down times, they don’t explode so much on the upside when things are good,” says Douglas Arthur, managing director/printing analyst at Morgan Stanley Dean Witter & Co. “You’re not going to get hit that hard in the bad times, but you’re not going to benefit that much in the good times.”
Pruitt says that the company is doing just fine, thank you. If you don’t believe him, he will send you numbers noting that the company’s revenue more than doubled to $1.142 billion in 2000 from $540.9 million in 1995. He adds that McClatchy stock has averaged a 20% return a year over the past five years, which he says is higher than the average of publicly traded newspaper companies and the S&P 500.
OK, but what about this year, Mr. Nice Guy? “In terms of revenue, we are outperforming the industry heavily,” Pruitt says. “But it is still a down year.”
Sounds like a diplomatic answer. In fact, with all his other attributes, Pruitt (the former political-science major) would seem a natural to turn his iron-cupcake diplomacy into a run for public office. The upcoming race in the 18th Congressional District ? the heart of Bee Country ? should be wide open, given the problems of another Gary. But Pruitt, who makes more than $1 million a year, insists he’s satisfied where he is.
“I’m very happy at McClatchy and plan on staying here,” he maintains. “Let’s put it this way: I feel a huge commitment to the family members who control the company and to the company itself. It would be very difficult for me to think about leaving McClatchy.”