The recent sale of Knight Ridder to McClatchy was one of those events that speak volumes about an entire industry. The newspaper business's long-term, seemingly inexorable decline is an old story that is hardly fodder for stop-the-presses, page-one play anymore. But in the same way that every misstep made by Ford or General Motors prompts a rash of stories and hand-wringing about the U.S. auto industry's disintegration, so does the Knight Ridder-McClatchy deal remind everyone of the wrenching changes that are transforming how people get their news.
In itself, the sale on March 12 of San Jose, Calif.-based Knight Ridder for $4.5 billion in cash and stock and $2 billion in assumed debt fell into the inherently newsworthy category. As the second largest newspaper concern in the United States prior to the sale, the fate of Knight Ridder's 32 properties was important to millions of readers and thousands of employees across the country. Equally newsworthy, and perhaps more stunning, was the immediate announcement by McClatchy, a newspaper chain based in Sacramento, Calif., that it would sell 12 of the papers it had just acquired, notably those located in regions of slow population growth. Among them are The Philadelphia Inquirer, The Philadelphia Daily News, The San Jose Mercury News, and papers in Minnesota, Ohio and Indiana.
Faculty members at Wharton and at journalism schools across the country say the Knight Ridder sale, which followed one of the most difficult years the industry has had -- declining circulation, job losses and falling stock prices -- markedly underscores the transformation sweeping the industry. Newspapers have two big strikes against them: They are in a mature industry (the first regularly published newspaper came out some 400 years ago in Europe) and they are a textbook example (stockbrokers are another) of an intermediary between sources of information and customers -- a role that is being increasingly challenged by the Internet.
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