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Home Front: Culture Wars
Worst newspaper in US destroys value
2006-12-27
Thomas Lifson
The McClatchy Company, recent purchaser of the Knight-Ridder chain of newspapers, is taking a huge loss on its 1998 purchase of the Minneapolis Star-Tribune, considered by many to be the worst, most politically correct newspaper in the United States. According to an article in the Star-Tribune, quoting a parent company/purchaser joint press release:
The Star Tribune is being sold by The McClatchy Company to private equity firm Avista Capital Partners, McClatchy and Avista announced today. The companies say they have a definitive agreement to sell the Star Tribune for $530 million to Avista, which has offices in New York and Houston. ...

McClatchy bought the Star Tribune from the Cowles Media Company in 1998 for a net price of $1.2 billion, after selling off Cowles' magazine and book publishing businesses.

That's a whopping 56% loss in 8 or so years. Even worse than New York Times Company stock.

The press release goes on to say that the purchaser plans to keep existing management and staff intact:
Harte said he expected the Star Tribune management team to remain intact, with current Publisher and President Keith Moyer continuing to lead the newspaper and also serve on the newspaper's board.

"We are excited to be partnering with the strong management team at the Star Tribune," Harte said. "We believe there is a great future for newspapers like the Star Tribune that produce an excellent local product for their communities and are focused on what readers want. Furthermore, the Star Tribune does a terrific job of making its content available over the Internet and in other forms."

This is rather strange, given the miserable track record of management in destroying shareholder value.

The Minneapolis-St. Paul metropolitan area has a very healthy economy and a rapidly growing population, almost unique among frostbelt metropolises. Its educated population should be able to support an excellent and profitable local newspaper. Yet the Star-Tribune has continued to insult the intelligence of area residents with highly biased coverage. Local websites like Powerline and Captain's Quarters have gained large national audiences in part by debunking the serious deficiencies in local newspapering.

There is no way to put a good face on the disaster that the Star-Tribune has been for McClatchy despite the cheery tone of the press release. I cannot believe a smart investor would come in and plan no changes. Stay tuned for what should be an interesting story.
Can you say Air America? They're keeping the assholes in charge because they are doing precisely what the Learjet Liberals want.
Posted by:.com

#7  TS has had the effect of limiting damage to the NYT brand by ensuring that bloggers couldn't tee-off on MoDo

It also has the happy by-product of limiting interest in what they write.
Posted by: Shipman   2006-12-27 14:06  

#6  I love how the 'Times Select' has put a fence around Dowd, Rich, Herbert, Goodman, etc. Obstensibly to raise revenue, TS has had the effect of limiting damage to the NYT brand by ensuring that bloggers couldn't tee-off on MoDo every day. I'm sure that alone slowed the slide in the NYT stock.

Fences are bad for immigration but good for NYT columnists.
Posted by: Steve White   2006-12-27 11:20  

#5  Lileks writes the "Daily Quirk" column and other stuff for the Strib and a syndicated op-ed for Newhouse News Service, along with the legendary "Daily Bleat." He's never been shy about critiquing the Strib's house editorials or other Strib columnists in his web commentary. (For example.) If he worked at the NYT, he'd be gone by now.
Posted by: Mike   2006-12-27 10:18  

#4  Lileks is syndicated and runs on the editorial page of our local paper. I presume it's the Strib column, but perhaps he has another for syndication. He is like Steyn...where do they find the time?
Posted by: Nimble Spemble   2006-12-27 09:43  

#3  If the Strib had brains, they'd be trying to syndicate Lileks and encouraging him to write for the editorial pages.

They don't; that should tell you how smart they are.

Oh, and they keep trying to take on and discredit the Powerline guys. Again, not the smartest thing in the world.
Posted by: Rob Crawford   2006-12-27 09:41  

#2  The Tallahassee Democrat when it was Knight-Ridder owned served as the minor leagues for the MST.
Posted by: Shipman   2006-12-27 08:04  

#1  The Strib is wretched, but I'm not sure it's worse than the NYT. The Strib has James Lileks, and is smart enough to let him write what he wants to write without interference. The NYT has . . . nobody a tenth as good. Maureen Dowd? Frank Rich? Bob Herbert? Ellen Goodman? The whole lot of 'em, put together, aren't writers enough to be worthy to change Lileks' toner cartridges.

Oh, and that bit about the management team? That's the press release way of saying "we haven't negotiated their severance packages yet."
Posted by: Mike   2006-12-27 07:17  

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