For one thing, Chairman-CEO P. Anthony Ridder put Knight Ridder on the block last November after its three biggest shareholders demanded a sale because its stock price wasn’t growing to their satisfaction, not because it wasn’t making money. It reported net income of $471.4 million in 2005 and enjoys profit margins approaching 20%. The process in that sense reflects the fact that Knight Ridder is a public company, susceptible to the aims of Wall Street and unprotected by special classes of stock like those employed at the family-controlled New York Times Co.
Since November, one of the best sources of Knight Ridder news has turned out to be a 58-year-old retiree named Lou Alexander, who was an ad-side staffer at the company’s San Jose Mercury News until July 2003. By aggregating and commenting on updates by e-mail and at www.gradethenews.org/blogs/, he has nearly become a prime example of new media rising above the old.
Almost, but not quite. Like so much online, Mr. Alexander depends on articles generated by Knight Ridder papers and other well-staffed, labor-intensive media outlets. Without the old-media companies, his new media couldn’t exist.
Then, too, the expected bidders -- the McClatchy Co. and Gannett in partnership with the MediaNews Group -- are public companies. That means analysts and their own shareholders are watching to make sure they don’t pay “too much” for Knight Ridder or take on “too much debt.”
Finally, whatever the bids are today, and whether Knight Ridder actually changes hands, its properties will almost definitely see sharp cost-cutting in the near future. Sure, the Web is steadily eroding the familiar print world, but the Knight Ridder sale is primarily about the pursuit of higher profit margins in an effort to please The Street.