NEW YORK (AdAge.com) -- After being forced to the auction block by grumpy shareholders and snapped up by McClatchy Co., Knight Ridder has one more indignity to witness: McClatchy is selling off of the newspaper that once held all of Knight Ridder's digital dreams, The San Jose Mercury News.
MediaNews Group, publisher of The Denver Post and papers from California to Vermont, will acquire the Mercury News and three other Knight Ridder papers from McClatchy in a $1 billion cash deal announced yesterday. McClatchy said last month, when it agreed to buy Knight Ridder, that it would try to sell 12 of Knight Ridder's 32 papers that didn't meet its acquisition criteria, but this is the first deal toward that end.
'The crown jewel'
In a visit to the Mercury News yesterday, MediaNews CEO Dean Singleton trumpeted his win. "While McClatchy may be buying Knight Ridder, we're getting the flagship and crown jewel of Knight Ridder," he told the newsroom, according to a Mercury News report.
Knight Ridder Chairman-CEO P. Anthony Ridder said he would keep an eye on the fortunes of his hometown paper. "I think Dean will do a good job," he said, according to the Associated Press. "I have his cellphone and e-mail addresses and if I see anything I don't like, I plan to let him know."
In the complex deal for the four papers, MediaNews also gains ownership of two more California papers, the Contra Costa Times and the Monterey County Herald, as well as the St. Paul Pioneer Press in Minnesota. Hearst Corp. will actually buy the Pioneer Press and the Monterey Herald, then transfer them to MediaNews in exchange for an equity stake in MediaNews assets outside the San Francisco Bay Area.
McClatchy continues to seek buyers for eight Knight Ridder papers, including The Philadelphia Inquirer and The Philadelphia Daily News; MediaNews has made a bid on both.
