Maybe. At a forum Thursday sponsored by Syracuse University’s Newhouse School, McClatchy CEO Gary Pruitt said leaving the public market is a “long-term option” for the third-largest U.S. newspaper chain. Pruitt explained that he believes he has a responsibility to “put the company in a position to have the flexibility to go private.” No such move is imminent, though, because the publisher is saddled with a heavy debt load from its $6.5 billion acquisition of Knight-Ridder a year ago.
On the other hand, Pruitt also said he wasn’t sure ownership by private equity firms is good for newspaper companies. Success in journalism, he noted, includes “success in the market.” Asked whether he would have sold the Minneapolis Star-Tribune if he knew that strategic buyers would not participate in the auction, Pruitt said it was apparent to him that a sale to a buyout firm was the most likely outcome. “We took some soundings from strategic buyers and rich individuals in Minneapolis,” he said, “and we went forward knowing it would be a private equity buyer.” Avista Capital Partners bought the paper in December 2006 for $530 million.
Pruitt also heartily endorsed the dual-class share structure that keeps the McClatchy family in control of the company. “It helps to have that insulation” from hostile takeovers, he said. And that insulation is coming in handy now. McClatchy’s stock price is down by about 38% over the last 12 months—that is, since the Knight-Ridder acquisition.—Jeffrey Kanige
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