Ridder Surprised, Unhappy Over McClatchy Flipping 12 Papers

By: E&P Staff One of the biggest surprises in the aftermath of McClatchy's winning bid for Knight Ridder is that the CEO of the latter newspaper chain, Tony Ridder, was shocked that the buyer turned around and put 12 of his newspapers on the market. One might have imagined that this possible scenario was discussed while the McClatchy deal was still developing.

But a lengthy report in his flagship paper, the San Jose Mercury News, reveals that Ridder was taken aback by McClatchy's flip flop, and that "he feels terrible about it."

Knight Ridder's spokesman, Polk Laffoon, told The New York Times that Ridder was upset about the unexpected dissolution of his company, "particularly now to see it not sold as a whole."

In what reporter Pete Carey called an occasionally emotional interview at the Knight Ridder office, Ridder said, "I was just stunned when I heard they were selling San Jose and Contra Costa, and Monterey, too."

Ridder said he was "feeling pretty good" about the deal with McClatchy, which he views as standing for "great stability" and quality journalism, until he learned about the change in direction.

Here's how Carey describes it:

"The turn of events contradicted the sense that Ridder said he had gotten from discussions at the offices of McClatchy's Palo Alto lawyer weeks earlier. He believed McClatchy would have to sell one paper to avoid antitrust complications, and perhaps two or three others.

"But Thursday, in New York to meet with investment bankers and prepare for a board meeting to review bids for the company, he learned from Goldman Sachs that McClatchy was 'talking about selling 12 newspapers,''' Ridder recalled. Then the Goldman Sachs adviser listed the papers.

"Ridder's lawyers called McClatchy's banker, Credit Suisse, telling them that Ridder was very surprised at the number of papers being sold. Ridder said he wanted to see if there was a way he could get San Jose and Contra Costa back into the McClatchy fold. 'But they wouldn't budge on that.'''

According to Carey, Ridder regrets things did not work out differently, but "he did not sound, in the interview, like someone who is ready to fade away. He promised to play a major part in the community going forward, extending Knight Ridder's role in recent years."

Asked what he would tell readers of the Mercury News, he replied: "I think you'll see a fair amount of interest in buying these newspapers. Knight Ridder is a big bite. Once you start splitting them up, a lot of people can afford to buy them.''

And Ridder said he will remain in San Jose to see it through. "Oh yeah, I'm not going to go away,'' he said. "I really care about this place.''