By: Joe Strupp The Newspaper Guild's effort to buy nine of Knight Ridder's newspapers moved a step closer to possible reality as the first major investment firm has signed on as a potential partner, the union announced Wednesday.
The Yucaipa Companies, a Californian-based firm described by the union as "the nation's largest worker-friendly" private equity outfit, has gone into a partnership with the Guild's ValuePlus Media Corporation, which formed to seek investors to buy the nine Knight Ridder papers that are Guild-represented, the union said in a statement.
Those papers include the Akron (Ohio) Beacon Journal, Duluth (Minn.) News Tribune, Grand Forks Herald, Lexington (Ky.) Herald-Leader, The Monterey County (Calif.) Herald, The Philadelphia Inquirer, Philadelphia Daily News, Saint Paul (Minn.) Pioneer Press and the San Jose (Calif.) Mercury News.
"They are going to put in dollars as part of the bid to work with investors," said Candice Johnson, a spokeswoman for the CWA-Guild. "They are in as a serious partner and they strengthen the appearance of the Guild bid."
Knight Ridder has said in the past that it would only consider bids for all of its newspaper properties and related assets. Still, Guild leaders contend the first investor is a key for hope.
"Today's announcement of our partnership with Yucaipa is a breakthrough," said Guild President Linda Foley. "It is an important step along the way in what could be a lengthy process. There is no guarantee that our interest in preserving the union properties will be taken up by the prevailing acquisition group. But at the very least, with Yucaipa's critical support, we should be seen as an attractive partner. There are sound economic reasons why the announced first-tier bidders will likely want to talk with us. And we welcome the conversation."
Yucaipa Managing Partner Ron Burkle added, "We commend the Guild for its initiative in exploring the possible 'worker-friendly' buyout of the union newspapers of the Knight Ridder chain. Yucaipa is ready to apply its resources and expertise to form a mutually beneficial alliance with one or more announced bidders for the Knight Ridder chain. We believe in the future potential of these papers."
Bill Boarman, chair of the union's Negotiated Pension Plan, also offered support in a statement, noting "The sector of 'worker-friendly' private equity firms is coming into its own within national capital markets. Yucaipa would be an excellent partner for this effort, and I applaud their interest in our industry - the newspaper industry - which is critical for the future of our democracy."
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