McClatchy's sale of KR papers wrapping up

AKRON, Ohio --Months of speculation over where the pieces from McClatchy Co.'s buyout of Knight Ridder would fall have all but wrapped up, with private media companies the chief buyers.

McClatchy has reached agreements to sell five of the six remaining Knight Ridder newspapers it plans to divest for about $450 million.

Together with two other transactions announced previously, McClatchy has now made deals to sell 11 of the 12 Knight Ridder papers it doesn't plan to keep. Sacramento, Calif.-based McClatchy said the sales have generated just over $2 billion in proceeds, which it plans to use to reduce some of the debt it is taking on to acquire Knight Ridder Inc.

The deals announced late Wednesday involved five newspapers: the Akron Beacon Journal in Ohio; Duluth News Tribune in Minnesota; Grand Forks Herald in North Dakota; The Fort Wayne News-Sentinel in Indiana and the Aberdeen American News in South Dakota.

The Akron paper was the largest of the former Knight Ridder papers remaining for sale. It was bought by Sound Publishing Holdings Inc., a subsidiary of Black Press Ltd., a private company based in Victoria, British Columbia.

McClatchy said it sold the News-Sentinel to Ogden Newspapers; the Duluth News Tribune and the Grand Forks Herald to Forum Communications Co.; and the (Aberdeen) American News to Schurz Communications Inc. Separate financial terms were not disclosed for the deals.

That leaves the Times Leader of Wilkes-Barre, Pa., remaining to be sold.

McClatchy has already announced the sale of six other larger newspapers owned by Knight Ridder. Privately held MediaNews Group Inc. bought four newspapers, and a local investor bought The Philadelphia Inquirer and the Philadelphia Daily News.

McClatchy said in March that it planned to buy Knight Ridder for $4.5 billion in cash and stock plus the assumption of about $2 billion in debt, but said it planned to keep only 20 of Knight Ridder's 32 newspapers, selling the other 12. Most didn't fit McClatchy's criteria of being located in growing markets.

McClatchy also sold the St. Paul Pioneer Press in Minnesota, where it would have faced antitrust concerns because of its ownership of the Star Tribune in neighboring Minneapolis.

All the newspapers sold so far were bought by private companies, which don't have to answer to Wall Street. Newspaper stocks have come under pressure from investors recently due to worries over circulation declines and the migration of readers and ad dollars to the Internet.

Last fall Knight Ridder was forced to put itself up for sale following a revolt by its three largest shareholders, who were dissatisfied with the company's lagging share price.

McClatchy itself is publicly traded but controlled by a family, as is the case with several other major newspaper companies including The New York Times Co., The Washington Post Co. and Dow Jones & Co., publisher of The Wall Street Journal.

Black Press Ltd. publishes more than 100 dailies and weeklies, including the Honolulu Star-Bulletin in Hawaii and several Canadian papers. In a memo to Beacon Journal employees, Black promised no layoffs and to recognize the paper's current labor unions, including the Newspaper Guild-CWA.

The Beacon Journal has won four Pulitzer Prizes, journalism's highest honors. The newspaper has average weekday circulation of about 128,000 daily, down 7.4 percent over the same period last year. The population of Akron, once the nation's tire-making capital, has been stable in recent years, down about 2 percent since 2000 to about 220,000.

Charles Knight bought the Akron newspaper in 1903 and became publisher four years later.

His son, John S. Knight, became editor and publisher in 1933 and created one of the nation's largest newspaper groups, Knight Newspapers. In 1974, the group merged with Ridder Publications to become Knight Ridder Inc.

Beacon Journal publisher James Crutchfield broke the news to staffers, saying Black's "reputation is for figuring out how things work and making them better. He appreciates the value of journalism."

Schurz, based in South Bend, Ind., publishes 12 daily newspapers with a combined circulation of about 225,000. It also owns a printing company, two cable companies, four television stations and seven radio stations.

Forum, based in Fargo, N.D., owns 29 daily and weekly newspapers in four states, three TV stations and a radio station. Ogden, based in Wheeling, W.Va., owns 36 daily newspapers in 11 states, along with magazines, regional telephone directories and weekly newspapers.

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On the Net:

Sound Publishing: http://www.soundpublishing.com/

Ogden Newspapers: http://www.oweb.com/

Forum Communications Co.: http://www.forumcomm.com/

Schurz Communications Inc.: http://www.schurz.com/

McClatchy: http://www.mcclatchy.com