Business opportunity: Owners sought for profitable hometown newspapers in 11 American cities. Owners will instantly become prominent citizens. Political and economic influence will follow. Great chance to leave a mark on the world.
Gary Pruitt, chief executive of the McClatchy newspapers, hasn't placed this ad anywhere yet, but he could. Pruitt's company recently bought 32 newspapers in the Knight Ridder chain, then announced it will sell a dozen of them (two in one city: Philadelphia). For America's bored rich – in this new gilded age, the country now has several thousand citizens with personal fortunes of more than $100 million – this could be the chance of a lifetime, and the chance to make a lifetime worthwhile.
Consider the rewards of being a newspaper proprietor. A newspaper with smart reporters and editors and a public-spirited owner can improve its community, raise the quality of its public and private institutions and enhance the lives of its citizens in countless ways. A good newspaper holds powerful people accountable for the way they use their power. The paper can unify a community, helping its residents understand how different segments of the population live, work, entertain themselves and more.
Newspaper readers who have lived in several metropolitan areas know whether the papers there enhance life or simply milk it. The point was made to me years ago by Peter Magowan, now the owner of the San Francisco Giants but for many years an executive of the Safeway supermarket company, ending his career at Safeway as CEO.
"I've had a chance to move around and live in lots of places; some had good papers, some bad," Magowan told me when I called him last week to refresh my memory. "As a citizen I depend on that paper. If it is a good paper it makes that community a much better, nicer place to live."
McClatchy's Pruitt is offering the opportunity to improve a rich variety of American communities, from our sixth-largest metropolitan area, Philadelphia, to the capital of Silicon Valley, San Jose, to the capital of Minnesota, St. Paul. Some interesting smaller cities are also on the list, including Grand Forks, N.D., and Wilkes-Barre, Pa. The papers are: the Philadelphia Inquirer, Philadelphia Daily News, San Jose Mercury News, St. Paul Pioneer Press. Akron (Ohio) Beacon Journal, Fort Wayne (Ind.) News-Sentinel, Duluth (Minn.) News-Tribune, Wilkes-Barre Times Leader, Aberdeen (S.D.) American News, Grand Forks Herald, Contra Costa (Calif.) Times and Monterey County (Calif.) Herald.
Am I looking for handouts for my beloved newspaper business? Not at all. Indeed, this is the key point: Every one of these newspapers is profitable. Newspapers have become some of the most profitable businesses in modern America. Traditional manufacturing industries consider a profit margin of 5 to 10 percent a triumph, but newspapers, including most of those up for sale, have been making much more than that.
The Akron Beacon Journal, for example, one of the papers Pruitt is selling, had a 20 percent profit margin last year – that is, 20 percent of total revenue was retained as profit. The Philadelphia Inquirer had a profit margin of 9 percent. Wealthy new owners could do right by these newspapers while still pocketing profits.
The staffs of these papers are generally in a demoralized state. Knight Ridder has been squeezing them hard for years in a vain effort to convince Wall Street that profits could continue to grow forever, as they had seemed to do for many years. Knight Ridder will now disappear, a monument to wrongheaded management and the perils of entrusting public institutions to quixotic investors.
I would advise any wealthy new owner who buys one of these papers to hold it as a private company to insulate his enterprise from Wall Street pressures. Take a long-term view. Hire a good editor and restore some of the features or positions cut in recent years, and you'll be welcomed as a hero by your new staff. Put emphasis on your paper's Web site, where its future health probably lies. Give your editor full support to build a strong institution. That will make you a hero throughout the community. Wouldn't it be fun to be a genuine hero?
Kaiser is associate editor of The Washington Post and co-author of "The News About the News: American Journalism in Peril."
