Pruitt Says KR Integration Going Well — But ‘Awful’ Timing

By: Jennifer Saba

At this morning’s 2007 outlook session for analysts and investors at the annual Media Week gathering in New York City, McClatchy CEO Gary Pruitt denied rumors that his company might soon go private. He also answered questions about how his company is doing after its major Knight Ridder purchase earlier this year. “The integration has gone well,” he replied. “What’s gone bad is the timing.”

He was referring to the severe downturn in the advertising market since the big acquisition, which he said “awful.” But he added that McClatchy had realized $60 milion in savings due to corporate and newspaper synergies and could realize more in a new digital strategy but won’t know more until 2008.

“We see more savings building over time,” he said, hinting at cuts to come. Earlier in his presentation, Pruitt said, “We must re-align cost structures…We’re not going to shy away from such ddecisons. We’re a tough-minded company.”

He said, “We will continue to evaluate staffing as the business evolves.” Year-to-date through November the number of fulltime employees is down 3.3%.

Through November ad revenue was up 0.1%. “Not very much,” he quipped, “but still up.” Interestingly, the 20 former KR papers were up .4%, while the legacy McClatchy papers were down .4%.

Circulation continued to slide a bit, and he said the circulation strategy he inherited at the KR papers was “very erratic.” He said those papers have been embracing McClatchy’s new strategies, however.

Pruitt addressed an audience member who pressed him on whether McClatchy was going to go private. Rumors had been circulating. Pruitt admitted, “I tried my best to be consistent but failed miserably,” in discussing this subject previously. “We have no plans to go private, no plans whatsoever.” He views it as a longterm strategy, several years down the road: “It’s an arrow in our quiver.”

Another audience member asked why the overall industry seems to be waffling on what it focuses on — shifting from print circulation to readership to “total audience” (adding print and Web readers). The questioner asked if the ad world was going to really buy total audience? Pruitt said that print circulation would always be a relevant figure. He admitted the industry had not done a good job in selling total audience.

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