Last week, the newspaper industry was shaken up when The McClatchy Company bought Knight Ridder, the Akron Beacon Journal’s parent company. Seeing Knight Ridder go was definitely saddening, considering one of the first newspapers it bought was the Beacon in 1903. However, it is too early to speculate whether the sale is a good thing for journalism.
According to The New York Times, The McClatchy Company, which primarily owned West Coast newspapers like The Sacramento Bee, would gain control of the 32 daily newspapers Knight Ridder currently owns. But The McClatchy Company shocked the journalism and business world when it revealed its plans to sell 12 of Knight Ridder’s newspapers, including the Beacon.
“That represents 45 percent of the company,” Knight Ridder chairman and CEO Tony Ridder told The New York Times, referring to the profit those 12 papers brought in.
McClatchy chairman Gary Pruitt said the Knight Ridder newspapers he wants to sell are “profitable, but in difficult, slow-growth markets.” Knight Ridder was often disappointed with the Beacon’s revenue returns, because apparently a 15-17 percent profit margin isn’t high enough. Knight Ridder expects all its ventures to operate at roughly a 20-25 percent profit margin. Any other type of corporation having profit margins like this would be astronomically incredulous.
“From the time I started in 1998 to when I left in 2003, there was definitely that pressure to keep those profit margins,” said Jan Leach, professional in residence at the School of Journalism and Mass Communication and former executive editor of the Beacon.
How this move will affect the Beacon is too early to tell. There haven’t been any credible reports yet about companies interested in buying it. We’re just crossing our fingers that the Beacon will still be functioning. We hate to see neighboring newspapers like the Cleveland Plain Dealer try to cram the Beacon’s extensive coverage into its already packed paper. This newspaper is probably one of the most important establishments in Northeast Ohio, and we only want that history to continue.
We’ve grown to love the Akron Beacon Journal throughout our college careers, and we know that our fellow journalism professors, some of whom are former Beacon employees themselves, have loved it longer. Ridder now says he regrets selling his company because he didn’t expect the McClatchy company to sell that many Knight Ridder establishments. Why sell in the first place?
Ridder said he had little or no choice because the company’s stock was declining. Private Capital Management, an investment firm that owned a majority of Knight Ridder’s shares, convinced Ridder to put the company up for sale last fall.
Newspaper corporations like these have excessive lust for profit, which may come at the expense of quality journalism. Should a newspaper not be able to maintain these profit goals, newsrooms may have to slash budgets on resources and even lay-off workers. As a result, newspapers are less capable of providing comprehensive coverage of the communities it serves.
Many members of this editorial board plan on working in newspapers and magazines, and we’re worried with how these profit demands will affect our dreams of practicing journalism.
The above editorial is the consensus of the Daily Kent Stater editorial board.