The Conventional Wisdom Trap: When It Comes to Newspaper Ownership, Saviors Are Elusive

Article excerpt

The trouble with conventional wisdom is that often it's stronger on the conventional than on the wisdom. That's certainly true when it comes to newspaper ownership.

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Take the case of Knight Ridder. When the beleaguered, fading company was bullied into putting itself up for sale, the prevailing view was that the best ending would be for its papers to wind up in the hands of McClatchy. This aging righthander may even have written a column to that effect (see "White Knight?" Web special). The thinking was, McClatchy had an audacious, dynamic chief executive, and it still seemed to embrace the quaint if not vanishing notion that quality journalism was important.

Actually, McClatchy may well have been the best bet, given the terrifying lack of attractive alternatives. But it's certainly an outcome that evokes far less enthusiasm than it did in the day.

No sooner had McClatchy sealed the deal than it cast off the Knight Ridder papers deemed to be in slow-growth markets and/or incapable of making enough money. The message was clear: Quality journalism is fine, but only when it's way lucrative.

Then came this shocker in late December: Out of the blue, the company jettisoned its flagship Star Tribune in Minneapolis, selling it to the private equity firm Avista Capital Partners. (See The Business of Journalism, page 64.)

What a turnaround. When the company bought the Star Tribune in 1998 for an eye-popping $1.2 billion, it served notice that McClatchy was on the move and that its CEO, the body surfing and rock 'n roll loving Gary Pruitt, was indeed a player.

Who would have guessed that eight years later, McClatchy would be dumping its largest paper for less than half of what it paid for it? Instead of an important news outlet, a major voice in a big city, the Star Tribune had become in McClatchy's eyes a drain on the company's profit margins and an opportunity for a big tax break.

In these dark times for ink-on-paper, with readers and advertisers defecting to the Internet in droves, Pruitt had emerged as an evangelist about the bright future of newspapers. This fire sale sent a very different message.

As Colby Atwood, an analyst at the media research firm Borrell Associates, told the New York Times, "They're buying cash flow and tax benefits. It's not the sort of religious commitment that you hope to get from newspaper owners."

Or take the conventional wisdom about ownership. In recent years public ownership of newspapers has gotten more bad ink than Terrell Owens. …