Magazine article Editor & Publisher

Stockholder Proposal Seeks Closing of USA Today

Magazine article Editor & Publisher

Stockholder Proposal Seeks Closing of USA Today

Article excerpt

It is time to fold USA Today, a dissident stockholder proposal argues.

At Gannett Co.'s annual meeting April 28, shareholders will vote on a proposal requesting that the board of directors cancel an anti-takeover "poison pill" adopted by the company in May 1990.

Albert Mayer, a New York City attorney, argues in his stockholder proposal that "present entrenched management has shown its incompetence by wasting talent and huge sums of money in an amount that will never be recovered on fantasies and personal agendas such as . . . continuing USA Today, which management has run for about nine years and which will never recoup its losses in the next 10 years."

Mayer's proposal also faults Gannett for taking on big debt to buy back the 10% stake the old Gannett Foundation sold in 1991. Headed by former Gannett chairman and USA Today founder Allen H. Neuharth, the foundation is now known as the Freedom Forum.

Mayer, who is a beneficial holder of 450 shares of stock, also takes a swipe at Gannett's board: "Instead of selecting directors for their business acumen, some of them seem to have been chosen only to show management's commitment to political correctness or diversity."

In particular, the proposal mocks the appointment of fomer first lady Rosalyn Carter, who is up for re-election at the annual meeting.

In a telephone interview, Mayer said he wants the board to redeem the preferred shareholder rights that were adopted as an anti-takeover strategy. He said the tactic -- which dramatically increases the cost of a takeover -- prevents ownership by a better group.

Not surprisingly, the proposal is vigorously opposed by the board of directors.

In its proxy, the board argues that USA Today has been "a dramatic consumer and journalistic success" that would likely be profitable already had there been no recession.

It argues that the poison pill would help directors negotiate the best price from a prospective owner. The

     Editor & Publisher
     U.S. Media Stock Values
     (Weekly Closing Quotes)
Stock                               3/31/92   3/24/92   4/02/91
Affiliated Publications Inc. (NY)    10.125     10.00    10.125
A.H. Belo Corp. (NY)                  35.00    36.125    28.125
Capitol Cities/ABC Inc. (NY)         427.00    425.50    450.50
Central Newspapers Inc. (NY)         23.125     22.50     18.25
Dow Jones & Co. Inc. (NY)             31.00     32.50     25.00
Gannett Co. Inc. (NY)                43.375    45.375    39.875
Knight Ridder Inc. (NY)              58.125    58.625     51.00
Lee Enterprises Inc. … 
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