McClatchy surprised some industry analysts after reaching a deal with CareerBuilder co-owners Gannett Co. and Tribune Co. to remain a stake holder in the $1.55 billion online recruitment site. The company will reduce its holding from 33% to 15%, however.
McClatchy had been in talks with the two publishers about its holding in CareerBuilder after acquiring it as part of its recent purchase of Knight-Ridder, the third publishing partner in the website. The change of ownership triggered a clause allowing Tribune and Gannett to buy Knight-Ridder's third of the website, prompting analysts to predict the two companies would leap at the chance to increase their holdings in a fast-growing, profitable internet business at a time when print margins are shrinking. But forcing out McClatchy included the risk that its 32 daily papers, which include the Minneapolis Star Tribune, Miami Herald and Kansas City Star, could jump to a competitor such as Monster.com.
Just last week, the Philadelphia Inquirer and Philadelphia Daily News, former Knight-Ridder titles flipped to private owners by McClatchy, dropped CareerBuilder for rival Monster, which in turn hinted it was exploring further newspaper deals. The agreement announced by all three companies today appears to address both concerns.
Value of $1.55 billion
However, McClatchy's stake will be reduced to 15% from Knight-Ridder's prior 33%, and its papers will stay in the CareerBuilder fold. McClatchy received $142 million apiece from Tribune and Gannett in exchange for the reduced stake. The transaction values CareerBuilder at $1.55 billion.
The companies also announced that McClatchy would be assuming reduced minority stakes in news aggregator Topix.net (11.25%) and shopping site ShopLocal.com (15%), which were each formerly one-third owned by Knight-Ridder.
McClatchy collected $13 million apiece from both publishers in exchange for the stake reductions, valuing Topix at $72 million and ShopLocal at $85 million.