The Knight Ridder newspaper chain slashed the staffs at its largest papers last year to boost profits, only to be confronted by investors demanding still better returns. So Knight Ridder gave in and put itself up for sale. Bids from suitors are due Thursday.
The possible sale of Knight Ridder would affect 32 papers read by people in 29 American cities, including prestigious dailies like the Miami Herald, the Philadelphia Inquirer and the San Jose Mercury News.
David Lawrence was publisher of the Herald until 1999. He says the chain's golden days are gone, but he thinks it still matters who buys it.
"If you think that, in a republic, certain things wouldn't get known without good newspapers, then it seems to me there is something significantly at risk here," Lawrence said.
Knight Ridder officials have said they won't sell the papers separately.
But Thomas Russo says that doesn't mean they'll stay together. He's a partner at Gardner Russo & Gardner, an investment firm in Lancaster, Pa., that has stakes in several media companies.
"The final story might end up looking like Knight Ridder properties scattered across a variety of different owners," Russo said. "Whether that happens initially or whether that happens with time, I just don’t know."
William Dean Singleton, the CEO of the Denver-based Media News Group, has recently surfaced in the newsrooms of the Inquirer, the Mercury-News and the Pioneer Press of St. Paul, Minn., as though he were kicking the tires. His company already owns the Denver Post, the Detroit News and other papers.
The Gannett Company -- the owner of USA Today and the Detroit Free Press -- has more papers than any other company in the country. But Gannett is used to much higher profit margins than those enjoyed by Knight Ridder's big papers.
A new Merrill Lynch analysis said the strongest suitors would be Media News -- with a partner like Gannett -- or the McClatchy Company.
McClatchy owns papers in Minneapolis, Sacramento and Raleigh, N.C. It is considered a champion of strong regional newspapers -- but it might have to take on significant debt to buy Knight Ridder.
None of the companies involved would comment for this story.
Former Miami Herald publisher David Lawrence says whoever buys Knight Ridder might have to sell off some papers or start new waves of job cuts.
"I find it hard to see a picture out of here that is anything like a victory for journalism," Lawrence said.
But other former Knight Ridder executives say rules require the corporation to examine bidders for journalistic quality before any sale can take place.
And there are a few wild cards. The Newspaper Guild of America is seeking to buy nine Knight Ridder papers. There could be private investment groups that decide to make bids. And if none of the offers is high enough, the company could reject them all -- and figure out how else to appease investors.