By: E&P Staff
Cuts on various levels — jobs, benefits, even the size of the newspapers — “are part of a plan to improve margins by as much as $150 million a year at newspaper chain Knight Ridder Inc., according to people familiar with presentations management has been making to potential buyers,” the Wall Street Journal reports today.
“The vision, according to people familiar with the plan, involves increasing annual earnings before interest, taxes, depreciation and amortization to about $825 million over the next 18 months. That represents an improvement of about 20% from 2004, when the company reported Ebitda of $685.9 million.
“To reach that level,” reporters Dennis K. Berman and Joseph T. Hallinan, relate, “the company sees a buyer relying on ‘streamlined’ operations as well as a plan to reduce the physical sizes of some of Knight Ridder’s 32 daily newspapers. …
“But the buyers have viewed Knight Ridder’s projections as overly optimistic, according to two people familiar with the matter. And they are treading cautiously as they do their own analysis — which is pushing back the resolution of the auction to late February or early March, these people said yesterday.”
Knight Ridder spokesman Polk Laffoon said he couldn’t comment.