Posted by: Jon Fine on February 01, 2006
Davis “Buzz” Merritt, a former top editor at Knight Ridder’s Wichita Eagle, last year wrote a book called Knightfall: Knight Ridder and how the erosion of Newspaper Journalism Is Putting Democracy at Risk.
You can get a good idea of where he’s coming from via the title, and Merritt is definitely a card-carrying member of the good-old-days-of-journalism-are-long-gone crowd. But even one who finds books written from this perspective really tiresome must concede that, at least, Merritt did exhaustive research before he spent over 200 pages shellacking Knight Ridder, and especially its CEO Tony Ridder, for mislaying newspaper journalism in the rush to please Wall Street’s profit demands.
But let’s zoom in on what’s probably the book’s pivotal Tony-Ridder-is-not-one-of-us moment. This happens after a speech Ridder gives to an assemblage of Knight Ridder editors, just after Ridder’s predecessor Jim Batten’s death in 1995.
“The first [question after Tony’s remarks] was, “Tony, what keeps you up at night, what do you most worry about?”
He thought for a minute. “Electronic classified,” he said.
The air went out of the room. He explained the serious financial threat presented by the vigorous new competitors for classified advertising, and the need to find ways to compete in the online arena.
He could have, but did not, talk to that roomful of his editors about the danger to democracy of failing newspapers, nor did he seek their support to make Knight Ridder newspapers the best anywhere. He was not wrong; electronic classified is a substantial threat. But he described the threat as one to the bottom line, rather than a threat to the company’s tradition of public service journalism.
Now. Without a bottom line there is no public service journalism, period, but, whatever, put that aside. Let’s ask instead, what led to Knight Ridder being put up for sale?
The money graf from shareholder Bruce Sherman’s letter to the Knight Ridder board on November 1 of last year reads like this [emphasis mine]:
In our view, the actions taken to date have not adequately addressed a number of significant issues facing the Company, including (i) continuing consolidation among traditional sources of print advertising revenue; (ii) the redirection of advertising dollars to other media; (iii) the Company’s unexceptional operating margins; and (iv) the Company’s lack of a nationally read paper capable of being leveraged in the online market. In light of these and other factors, we view the best interests of the shareholders as being served by the Board soliciting competitive bids for the Company, either from financial buyers willing to pay fair value or industry participants that would realize synergies and increased market presence through the acquisition of Knight Ridder’s highly desirable local newspaper and online advertising assets.
Sounds like what Tony Ridder feared ended up being a hell of a lot more central to the ultimate fate of Knight Ridder than whatever the editors at that meeting wanted to gasbag about.
Say what you will about how Tony Ridder’s led Knight Ridder. (And there’s quite a lot to be said about that.)
But also note that, in this case, Tony Ridder was right.
The media, entertainment and marketing worlds continue to shapeshift on a near-daily basis, as new forms arise and old assumptions erode. Where is it all going? No one really knows. But on this blog BusinessWeek’s media writers Tom Lowry and Ron Grover promise to provide ample helpings of scoop, provocation, and sharp analysis as they track and annotate this constantly changing terrain.