By: E&P Staff
A report in today’s San Jose Mercury-News confirms a Wall Street Journal story published Tuesday which revealed that Knight Ridder is telling prospective buyers that its profits can be sharply increased by cutting jobs and benefits and reducing the size of some of its 32 newspapers.
Pete Carey, reporting for the Knight Ridder-owned Mercury-News, writes, “All interested parties have signed confidentiality agreements. But leaks of the company’s projections already have begun.
“The figures Knight Ridder is giving potential buyers are similar to those in a Morgan Stanley research report published in November. The report, by analyst Douglas Arthur, said an outside buyer could reduce costs by $150 million a year through a 5% reduction in the workforce, cutting labor costs and chopping corporate overhead.”
Knight Ridder spokesman Polk Laffoon told the San Jose paper that KR’s financial advisers had prepared “a wide array of information about the company, including its cost structure. … They reflect various options reviewed with people who have expressed interest in possibly bidding on the company. These options offer a variety of approaches to operational issues,” he said.
“Whatever actions are taken would very much depend on the individual bidder, and any savings achieved would not be achieved overnight,” Laffoon told the paper.