yes, the worker-friendly buyout of Knight-Ridder -- or at least the 12 K-R papers new owner McClatchy wants to unload, including the San Jose Mercury News and the Philadelphia Inquirer -- is still alive.
According to a FAQ posted yesterday on the Newspaper Guild's knightridderwatch.org site, the 12-paper employee buyout proposal is being backed by Yucaipa Companies, a pro-union private equity firm based in Los Angeles, and owned by major Democratic philanthropist and "supermarket magnate" Ron Burkle, 53.
Burkle is "very active in Los Angeles civic affairs, as well as state and national Democratic politics," he is No. 112 on Forbes' list of wealthiest Americans, and he "counts former President Bill Clinton, former Vice President Al Gore and civil rights leaders like the Rev. Jesse Jackson among his friends and business partners." (btw, he doesn't have a college degree, starting as a stock boy in his dad's small grocery store).
Folks, we've seen lots of discussion here about the need for truly "fair and balanced" media, and we've seen lots of praise of Knight-Ridder's Iraq reporting, and other coverage, too. I've seen any number of wistful "why can't George Soros set up his own media empire?" posts.
Well, this looks even better -- a potential employee-owned media empire -- and it looks like it really might happen!
Yucaipa has an "almost 20-year track record as a worker-friendly company that respects unions and employee rights." They want to buy all 12 papers McClatchy wants to sell, and they're prepared to put up "all the money necessary to close the transaction," and then offer employees an Employee Stock Ownership Plan.
Q. So how would the buyout effort work?
A. Yucaipa will make a bid for the 12 papers. If successful, Yucaipa would write a rather large check for all of the properties. At that point, Yucaipa would be the sole owner of the 12 papers.
Q. When would employees have an opportunity to decide whether they want to take an ownership share of the new company?
A. Within a few months after Yucaipa buys the papers, employees would be given an opportunity to invest [on a "fully voluntary basis"]. They would review a detailed business plan and other proprietary documents in making their decisions.
Why is Burkle interested in buying newspapers?
Like Armando, Burkle is convinced that "newspapers are not going to go away." Yucaipa "makes its money by investing in companies and growing revenues over a long period."
Following from that position, Yucaipa sees in the Knight Ridder union papers the seed to grow a larger media company. Yucaipa believes newspapers are a good investment because they produce cash and often are in markets where they maintain a legal monopoly position. Yucaipa also believes in the opportunity to combine newspapers with Web and electronic media properties.
As a member of Yahoo's board of directors, Burkle's "expertise will help us chart an effective digital strategy to capitalize on our competitive advantage in content."
Unlike other buyout firms, which "seek to slash expenses, bleed the company of all profits and then sell out as soon as possible," Yucaipa's long-term growth philosophy gives any new company "an opportunity to invest in news resources, marketing, and employee training and development."
Will Burkle seek to influence the Knight-Ridder papers' news coverage?
A key question that has been posed is how he envisions his role: Would he attempt to influence news side policy or leave that to the newsroom managers he employs? Mackin, the Guild's consultant, replied that he has seen no evidence of Burkle's interest in a playing a political role with newspapers. All discussions that have taken place with Burkle and Yucaipa have focused on newspapers as an investment opportunity. Yucaipa's track record to date also would suggest its respect for allowing management - in this case publishers and editors - to do their jobs without interference.
quite something, and even more interesting info at the link. Also Kossacks should check out the brand-new "Save the Merc" web site, put up by San Jose Mercury News employees, and consider sending an email to sign their "Community Statement of Support."
Most signers so far are from the Bay Area community, but let's demonstrate that the "community of support" for the quality journalism put out by the Mercury News and other Knight-Ridder papers extends far beyond the circle of readers who can find the Merc at their local newstand.