Family Quit Paper Over Stock Repurchase Dispute

The abrupt resignation of the prominent Newhall family from the top three posts at the Newhall Signal this week was prompted by a dispute over stock ownership, the family and paper’s parent company said Wednesday.

Charles H. Morris, president of Morris Newspaper Corp., which owns the Signal, said the dispute stemmed from publisher Tony Newhall’s desire to buy back 19.2% of the paper’s stock, which he had sold to Morris five years ago.

Family patriarch Scott Newhall, the Signal’s flamboyant editorial writer and former owner, agreed that the stock dispute drove the family to sever its ties with the paper after 25 years.

But Newhall also called it the final blow in a festering conflict between the paper, an institution in the Santa Clarita Valley, and the parent company.

“Looking back, I can see that this whole thing has been coming since I sold the paper back in 1978,” Newhall, 74, said. The crux of the matter, he said, was a clash between his desire to pay the employees well and penny-pinching corporate bookkeepers.

“We’re not in the same business,” said Newhall’s wife, Ruth Newhall, 78, the editor. “They are in a corporate business and we are in the newspaper business.”

She said that starting reporters earn about $300 a week. After working at the paper for a year or two, they make more than $400 a week “but not a great deal over that,” she said, and most reporters can’t afford to live in the affluent and fast-growing Santa Clarita Valley they cover.

“It’s awfully hard for us to ask our people to work for less than we pay our gardener,” said the independently wealthy Scott Newhall.

Newhall is the great-grandson of Henry Mayo Newhall, a pioneer land baron who put together the 37,000-acre Newhall Ranch on which the planned community of Valencia is being developed. He is a board member and stockholder of the Newhall Land & Farming Co., which last year had $183.3 million in revenue.

Scott Newhall served for 20 years as editor of the San Francisco Chronicle, where he became famous for fostering colorful and uninhibited journalism. He bought the Signal in 1963 and made it famous for long editorials, bristling with baroque prose, that he ran atop the front page, attacking local officials.

Scott’s son, Tony Newhall, 47, the Signal’s publisher for 20 years, abruptly announced the family’s resignations at a meeting of employees Tuesday after a negotiating session with Morris executives.

Morris said he declined to sell the stock to Tony Newhall because Newhall wanted to purchase the stock at the 1983 price.

“I just didn’t feel like that would be fair to anybody else in the company,” Morris said in a telephone interview from the corporation’s headquarters in Savannah, Ga.

He refused to disclose the 1983 sale price. He would not say how much the stock had appreciated since then, but said the figure was in the area of “a million or so bucks.”

In 1983, Tony Newhall said, Morris “unfairly coerced me into selling my stock to him and I felt that he had a moral obligation, if he wished me to remain at the paper, to allow me to buy back half of the stock at the same price.”

Tony Newhall said he sold the stock because after five years, Morris kept all the profits from the paper and “I didn’t get a dime.” He said Morris told him he could look elsewhere for a job if he did not sell the stock to him.

“I didn’t want to leave,” he said.

All three Newhalls praised Morris for giving them total editorial freedom after selling the paper to him 10 years ago.

“They’ve lost sight of the human being,” Scott Newhall said. The newspaper is run by bookkeepers who look only at profits and have little regard for the employees and readers, he said.

Morris Newspaper Corp., a 17-year-old company, owns 39 papers and four television stations throughout the country. In addition to the Signal, it owns four small newspapers in central and Northern California.

With a circulation of 40,000, the Signal is the largest of the company’s newspapers. “The paper’s obscenely profitable,” Scott Newhall said.

Morris said he and his sister are now sole owners of the paper. He described the Newhalls’ departure from the chain as “a very heart-wrenching time for all of us--a real shame.”

“I really have affection and respect for all of the Newhalls,” he said.

At the Signal’s offices Wednesday, the mood was somber. Some employees wore black armbands.

“It was a big shock and we’re all numb,” managing editor Jeanne Feeney said of the Newhalls’ departure. “It’s as if our family had resigned. I can’t imagine what we’ll do without them.”

Reporter Sharon Hormell said that the Newhalls are held in “extremely high esteem” by employees.

“There were quite a few tears yesterday,” she said.