CEO Says Job Cuts to Continue as Company Restructures

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NEW YORK ( -- The drumbeat of down media news continued at today's Mid-Year Media Review.

Tony Ridder, chairman-CEO of Knight Ridder and the current personification of how Wall Street pressures affect newspapers' traditional editorial mission, dryly greeted attendees with "It's nice to see a packed house."

Knight Ridder's presentation was studded with research attesting to newspapers' power in their local markets, but the financial news the company divulged was of the sort best accompanied by "ouch": ad revenues down 8.6% in April and May and "about the same" in June and an overall second-quarter ad revenue decline between 8% and 9%. Mr. Ridder also added that his company's oft-stated overall profit margin goal in the mid-20's will be temporarily "derail[ed]" by current economic conditions.

'Touched bottom'
After the presentation, Mr. Ridder said that a pickup in national advertising and easier comparisons for the rest of the year lay behind the company's assertion that the revenue picture has "touched bottom." Its overall year-to-date revenues were down 5.3%.

Knight Ridder also reiterated plans to cut its roughly 22,000-strong workforce by 10%.

Mindful of the attention the press has given Knight Ridder's cost-cutting moves, Mr. Ridder stressed that company newspapers will still be "adequately staffed" after those cutbacks. All the same, he called it "the most aggressive restructuring" in the company's history.

Mr. Ridder also said the prospects of loosened cross-ownership rules -- which would allow newspapers to own TV stations in their market -- would likely have little effect on Knight Ridder, because their portfolio is all newspapers. He did say that the company may expand into radio given the opportunity, but only in a limited way.

Dow Jones is down
Less optimistic was Dow Jones & Co. CEO Peter Kann, who reported ugly results for The Wall Street Journal -- ad linage is down 34% through May vs. a 39% gain last year -- and said he had "no insight on when improvement will begin."

Mr. Kann cited the now-shopworn economic metaphor of "poor visibility" as reasoning for not offering analysts' guidance on earnings-per-share performance for the remainder of the year.

Both Knight Ridder and Dow Jones said they expected to meet earnings expectations for the second quarter. At closing, Dow Jones' stock was up 99 cents to $55.32, off its 52-week high of $77.31. Knight Ridder's stock was up 29 cents to $56.49, off its 52-week high of $61.25.

'Darth Ridder'
Asked about being in the crosshairs of the debate between newspaper traditionalists and the demands Wall Street places upon papers, Mr. Ridder told said he wasn't terribly surprised by it.

"We're the second-largest newspaper company" next to Gannett Co.," his said, "and they aren't changing as much as we are."

But as for the current role he's called to play on the media stage -- complete with the resurrection of his old nickname "Darth Ridder" -- he said, "I don't really like it, but I guess it's got to be somebody."

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