Three media practitioners spoke to students and faculty about the possible scenarios and implications of the sale of Knight Ridder newspapers, including the Miami Herald, as part of a panel hosted by the South Florida chapter of the Society of Professional Journalists (SPJ) and the School of Communication in the school’s courtyard on Feb. 10.
“Journalists, by and large, have never been happy with [business control],” said Bob Ingle, former head of Knight Ridder new media and former executive editor of the company’s San Jose Mercury News.
Ingle said this in the context of discussing the possible scenarios for selling the newspapers.
“The financial realities of running a newspaper have slapped us on the face,” he said.
Ingle’s first scenario is that Knight Ridder sells off either the whole company or parts of the company.
“The cost basis is quite low and the tax burden would be enormous,” he said.
The next scenario postulated would be a merger, perhaps with The McClatchy Company, according to Ingle, though he said the problem with that is that McClatchy’s size is half that of Knight Ridder.
A leveraged buyout would be another option, Ingle said. If this were to occur, an equity firm would purchase Knight Ridder, buy back all the public holdings, make the company private and then make it public again in a few years.
Borrowing the money to buy the company is another possibility, though Ingle doubts that will occur.
“The service on the debt is a killer,” he said. “I don’t think that’s a possibility.”
John Hopkins, vice president of the South Florida Professional Chapter of SPJ and a former copy editor at the Miami Herald, moderated the event. He said that a buyout by a newspaper guild or family ownership is a plausible option.
He cited the family ownership of the Kansas City Star for more than 50 years as a successful example.
The panel agreed that family ownership would be a good option, but that problems would still arise.
“Family ownership is a wonderful form of ownership,” Picard said.
He added that, on the other hand, it rarely lasts longer than three generations.
Regarding ownership by the employees, the panel also agreed that it works well for a while, but multiple problems may ensue.
Picard said that journalists have too much self-interest in this scenario, and they often sell out their shares when they retire. Journalists’ lack of the business skills necessary to run a media company is also an issue.
There is little doubt that the face of news media is a changing one, as evidenced by the Knight Ridder situation. But, said Ingle, “I believe newspapers are going to be around for quite a while.”
Greg Linch can be contacted at g.linch@umiami.edu.