McClatchy Limiting Bid Data, Union Says
A union representing newspaper employees complained Friday that it was being denied access to some financial information on papers being sold by McClatchy Co., hampering a union-supported bid for the publications.
McClatchy plans to sell the 12 Knight Ridder Inc. papers as part of its $4.5-billion acquisition of the San Jose-based company. McClatchy, which is based in Sacramento, has asked that bids be submitted by Tuesday.
The Newspaper Guild-Communications Workers of America is teaming with Los Angeles investment firm Yucaipa Cos. in an effort to acquire the papers, which include the San Jose Mercury News, the Philadelphia Inquirer and the St. Paul (Minn.) Pioneer Press.
The union, which represents workers at eight of the papers, said McClatchy wouldn’t let its advisors review all of the internal financial data it requested despite promises by the advisors not to share the information with union leaders.
The union acknowledged that it apparently was in the same boat with any prospective buyer that wasn’t involved in the earlier bidding for all of Knight Ridder. Those parties, which included McClatchy and other big newspaper companies such as MediaNews Group Inc. and Gannett Co., were privy to more financial data than McClatchy is releasing on the 12 papers.
McClatchy implied Friday that serious bidders would get the data they needed after demonstrating their commitment and ability to finance a purchase.
“McClatchy has received scores of inquiries, requests for information and expressions of interest from prospective buyers,” the company said in a written statement. “It is obviously in McClatchy’s interest to consider bids from all potential buyers. After we have received bids, we will carefully consider each of them and act in the best interest of McClatchy.”
Industry analyst John Morton said, “You don’t want to just give this information to every Tom, Dick and Harry. You only want to give it to people who are going to do something with it.”
Union financial advisor Chris Mackin said Yucaipa, which is controlled by L.A. billionaire Ron Burkle, would still submit a bid Tuesday. The firm expects to be able to submit a revised bid later, although Mackin said delays in receiving the additional information could handicap that effort.
The dispute underscores the tension that comes with the union’s entry into the auction process. If another company ends up winning control of the papers, it might be uncomfortable with the union knowing such sensitive information as how much each publisher is paid.
The union said McClatchy might be shortchanging its shareholders by not providing enough financial information for all interested parties to make the highest possible bid.
“It just doesn’t make any sense to us,” Mackin said. “Presumably, this process is supposed to result in the highest possible bid.”
MediaNews of Denver, which is led by William Dean Singleton, is expected to bid for at least the Mercury News and the Contra Costa Times and perhaps several other papers. Gannett executives said Thursday that they were investigating bids for some of the papers, though analysts said monopoly laws and restrictions on companies’ owning TV stations and papers in the same markets could complicate deals for the Inquirer, the Pioneer Press and the Akron (Ohio) Beacon Journal.
Other possible bidders include New York-based Hearst Corp. for the papers in the Bay Area near its San Francisco Chronicle; Iowa-based Lee Enterprises Inc. for smaller papers in the Dakotas; and Advance Publications Inc. for the Beacon Journal, near its Cleveland Plain Dealer.
