Knight-Ridder Split Continues

The breakup of Knight-Ridder newspapers is nearly complete following Wednesday’s announcement that McClatchy Co. has sold five newspapers. (In March, McClatchy purchased Knight-Ridder’s 32 newspapers, then announced plans to immediately sell 12 papers that didn’t meet its growth objectives.)

The newspapers impacted by Wednesday’s news are in Ohio, Minnesota, North Dakota, Indiana and South Dakota. It leaves the Times Leader in Wilkes-Barre, Penn., as the only “orphan” McClatchy is still trying to sell. (An AP story today describes how employees there are coping with the lingering uncertainty.)

Now that the acquisition dust has mostly settled, a few observations:

• Unlikely Allies: Wednesday’s announcement created some unusual ownership dynamics. The Grand Forks (N.D.) Herald, for example, will be owned by its rival paper in Fargo (80 miles to the south). The Herald will also become a sister company to the ABC television affiliate in its market. Other newspapers, however, will have unfamiliar and distant owners: The Akron (Ohio) newspaper will become part of a British Columbia company, and the Aberdeen (S.D.) paper will have an Indiana owner.
• Diversification and Convergence: Tucked away in Wednesday’s announcements are several weeklies, shoppers and magazines. The Grand Forks purchase, for instance, includes an agricultural weekly and two monthly glossy magazines. These publications provide diversity in the uncertain newspaper industry while offering potential value-added opportunities for advertisers.
• Winners and (Potential) Losers: Employees in Duluth, Minn., and Grand Forks, N.D., are mostly relieved at being purchased by a family-owned, regional media company that promises stability and capital improvements. In contrast, the St. Paul Pioneer Press will be owned by MediaNews, a company best-known for its cost-cutting and shrewd CEO Dean Singleton. How will each newspaper fare? Time will tell.
• Uncertain Union Futures: Knight-Ridder’s strong union presence has become fragmented. And while each new owner has promised to honor existing contracts, many agreements end in 2007, setting the stage for an early test of new management/employee relationships.
• Shareholder Power: Let’s not forget that an unhappy group of Knight-Ridder shareholders ultimately created one of the biggest media shakeups in recent memory. Shareholder influence reigns.