By: E&P Staff Will journalistic quality call the tune in the possible Knight Ridder sale after all?
The company's corporate charter could force a buyer of the newspaper company to win a whopping 80 percent of shareholder votes unless the board of directors finds that a new owner would maintain the newspaper chain's "journalistic excellence," Pete Carey revealed in a San Jose Mercury News story on Monday. The California newspaper is flagship for Knight Ridder.
A buyer the majority of the board deems "journalistically" acceptable would only need two-thirds of shareholder votes for a sale to be approved.
"The company's articles of incorporation require the board to form an independent panel of experts to review a winning bidder," Carey observes. However, the panel's findings are not binding on the board.
"It could complicate things'' even if it doesn't cause a fundamental change in the process, James M. Naughton, former executive editor at the Philadelphia Inquirer, a Knight Ridder newspaper, told Carey. "Does anybody among the suitors measure up?'' Weeks ago, Naughton was part of a group of former Knight Ridder editors and writers to call for maintaining standards in the event of a sale.
"I would think it's conceivable that shareholders would have an opportunity to make their own appraisal of whether the board had fulfilled that obligation,'' he said.
Knight Ridder spokeswoman Lee Ann Schlatter declined to comment.
"The independent review panel would be made up of journalism experts with no connection to Knight Ridder, which owns 32 daily newspapers," Carey wrote.
"The board of directors, with input from the independent panel, would have to determine that the new buyer would 'continue to serve their respective communities and other constituencies ... with the same degree of journalistic excellence, integrity and independence' that Knight Ridder did."
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