Pete Carey, Mercury News
SEATTLE – Two newspaper executives took time out from negotiations for the purchase of the Mercury News and three other Knight Ridder papers Tuesday to discuss the future of the newspaper industry.
Gary Pruitt, chairman and chief executive of McClatchy, and Dean Singleton, vice chairman and chief executive officer of MediaNews, agreed that newspapers aren’t headed for extinction despite the slow erosion of readers. The industry is holding up better than television and radio, which are fragmenting.
But the Internet is another matter.
“There is no bigger problem in our industry today,” said Singleton, who sources say is in negotiations with Pruitt to buy the Mercury News, Contra Costa Times, Monterey County Herald and St. Paul Pioneer Press. Knight Ridder agreed to be purchased by McClatchy on March 13 in a cash and stock deal then valued at $4.5 billion. McClatchy is selling 12 of Knight Ridder’s 32 newspapers to help pay for the deal.
Singleton, whose company owns 50 daily newspapers including the Denver Post, said newspapers have to find a way to make money off the content they now put online for free.
“We have to get paid for it,” Singleton said. WWe either have to come together as an industry or partner with Google or Yahoo or whomever. If we don’t get paid for it, we aren’t going to continue to be able to produce it.”
But Pruitt had some reservations about charging for online, risking the loss of readers.
“I don’t think it has to be charged. Broadcast did pretty well without charging,” he said.
The two were panelists at the American Society of Newspaper Editors annual convention, held this year in Seattle. Other panelists were Alberto Ibarguen, president of the Knight Foundation, and William Drewry, a newspaper analyst with Credit Suisse Securities.
Pruitt declined Ibarguen’s invitation to discuss negotiations for the sale of the 12 Knight Ridder papers. He did explain why he was selling them, though.
“We weren’t picking a journalistic all-star team. We would have kept San Jose and Philadelphia if we were.” The decision to sell them “came from a clear-eyed analysis, looking at all sorts of criteria,” Pruitt said. These included household growth rates, economic diversity, and retail advertising that is consistent with McClatchy’s strategy.
Singleton and Pruitt were optimistic about the future of the newspaper industry, and Singleton pointed out he’s installing new presses in Denver, Salt Lake City and Northern California, where he owns eight Bay Area newspapers.
“The whole story is local,” said Singleton. “National, international, have become commoditized,” but no one has been able to duplicate newspapers’ local depth. “It’s fun to send people to Iraq, we did our share, but it’s not nearly as important as covering social injustice in the local community, or covering immigration in the local community. That’s our game,” said Singleton.