Monday, August 28, 2006

The fate of Knight Ridder

Please, God, don’t let anyone feel any sympathy for Tony Ridder, Knight-Ridder’s former chief executive officer. The demise of his company was written up in yesterday’s New York Times.

Perhaps it’s a shame that Tony lost his job, but keep in mind that he never winced once – well, maybe he did a few times – for the people whose jobs he eliminated or fired during his tenure running the company.

When he did eliminate jobs, he did it with the understanding that he was ridding Knight Ridder of people who had failed or were redundant. And so what happened to Mr. Ridder when he lost his company was nothing more than the business cycle getting even with him. Or, as the adage goes, what comes around goes around.

Where Mr. Ridder failed was capturing Wall Street’s imagination. Yes, Knight Ridder published fine newspapers and, yes, they even had Web sites. And, yes, Knight Ridder even owned a third of Career Builder. But so what said Wall Street. The only initiative the print editions had shown for the last five years was how small they could be.

He didn’t try anything dynamic with his print products. He simply managed them as a lean as possible so he could extract as many profits as possible. That, apparently, was supposed to keep Wall Street and his institutional investors happy.

Well, it didn’t. Knight Ridder’s single, largest shareholder was upset with the results, forcing the company to be sold to McClatchy. In other words, Tony was fired because Bruce Sherman, his largest shareholder, thought someone else could do a better job.

Besides being unemployed, Tony is counting his millions. The word was he grossed around $80 million as a result of the sale. What’s that after taxes and fees? $30 million? There are a number of people who’d sign up for that deal – lose the job but receive multiple millions as they walk out the door.

Had Tony tried something dynamic – like turn The Philadelphia Inquirer into a tabloid newspaper – he just might be sitting in his office today in San Jose, California. He could’ve killed off The Philadelphia Daily News and converted the highbrow Inquirer into a tabloid along the same lines as The Times of London.

Yes, it’s hard to say if this would have worked. But by doing something like this, he would have at least shown that he was prepared to take a risk in an attempt to make one of his finest print products healthy.

But he couldn’t be bothered. Instead, it was business as usual at Knight Ridder – sell ads, write stories, put things up on Web sites and, then, when the results he didn't like materialized, cut some more.

Tony, you earned your fate.

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