It's the best outcome to an awful situation. But with a great big asterisk.
The successful drive by Bruce Sherman and his band of greedheads to force Knight Ridder to put itself up for sale was appalling. But as I wrote in December, if the company had to be sold, Sacramento-based McClatchy certainly seemed like a far better new owner than the other potential buyers.
So now McClatchy has won. But while a celebration is in order, it will be a muted one, as far as I'm concerned.
Because McClatchy in effect is buying two-thirds of Knight Ridder. It plans to sell off 12 papers, including a couple of Knight Ridder's best, the Philadelphia Inquirer and the San Jose Mercury News.
The reason? McClatchy's strategy has focused on acquiring properties in high-growth markets. Philadelphia and San Jose, not to mention Wilkes-Barre, Pennsylvania, and Grand Forks, North Dakota, didn't make the cut.
Papers in places like Charlotte and Fort Worth seemed like a better fit.
So at a dozen dailies — including the St. Paul Pioneer Press, which will be unloaded due to antitrust problems posed by McClatchy's ownership of Minneapolis' Star Tribune — the agony continues.
A group of Knight Ridder alumni led by former Philadelphia Inquirer Executive Editor and Poynter Institute President James M. Naughton called on McClatchy to rethink its plan to shed the papers. Let's hope it does.
But even if it doesn't, this endgame is certainly better than the alternatives. The worst would be seeing all of Knight Ridder's papers in the hands of private-equity outfits that care not at all about journalism's public service component. The result would have been slashing and burning on a scale that would make Tony Ridder look like Gene Roberts.
And having 20 Knight Ridder papers owned by McClatchy is certainly preferable to seeing them in the hands of Gannett or MediaNews, potential suitors who apparently never did submit bids. While these newspaper companies would be far better than the private-equity route, neither has shown McClatchy's flair for combining healthy profits and quality journalism.
The outcome is a major triumph for Gary Pruitt, McClatchy's dynamic CEO. Pruitt likes bold moves as much as he likes surfing and rock 'n' roll, which is a lot. He shocked the business with his audacious acquisition of the Star Tribune in 1998. McClatchy paid $1.4 billion for Cowles Media Co., whose principal property was the Star Trib, a far bigger paper than any McClatchy owned at the time.
Now McClatchy will grow enormously. It had 12 dailies before the latest deal, including the Sacramento Bee and Raleigh's News & Observer, and will end up with 32 after it sells off the properties it doesn't want. That will make it the second-largest newspaper chain in the country, behind Gannett.
Much has been made of the notion that McClatchy and Knight Ridder are a good fit "culturally." But let's not forget that Knight Ridder at the end was a far different company than it had been in the past. Budget cuts designed to boost profits and placate ravenous Wall Street took their toll on the company's jewels.
There was much speculation last week that the new owners would have to whack away after borrowing so much money to acquire a larger company. But Pruitt said today that McClatchy has no plans to eliminate jobs at its new properties.
Also in play is the fate of the Knight Ridder Washington bureau, a true gem. The bureau has distinguished itself with aggressive, cutting-edge reporting on everything from Iraq to coal-mine safety. Its work gets too little national attention because it isn't seen in Washington, which is too bad, because it is often far superior to the conventional wisdom of that self-absorbed town.
Let's hope McClatchy shows its journalistic mettle by nurturing this invaluable institution.