How profit became king. Books on KR

New books on Knight Ridder

Two new books by Knight Ridder veterans examine how the company -- and the industry -- demoted journalism from first to second among their priorities.

The here-and-now hot topic in newspapers these days is, as Richard Reeves has put it, "the future of journalism -- if any."

Read an excerpt from "Knightfall" by Davis Merritt:
After the book (about public journalism) was published and I returned to the Eagle in 1995, my world was totally changed. Jim Batten, who had been the rock behind KR's support for public journalism as well as a great friend, was dying.

Read an excerpt from "The Vanishing Newspaper" by Phil Meyer:
In (Knight Rider CEO's Alvah) Chapman's view, Wall Street's preoccupation with quarterly earnings growth was not all bad. "There's some discipline there that a well-managed business needs to be aware of at least to protect itself....
Worthy questions all. But the companion story of how newspapers may have weakened themselves by weakening their commitment to news and public service remains highly relevant. It was not so very long ago -- the 1970s and 1980s -- that a high-minded commitment to quality and business success seemed entirely compatible. The Knight-Ridder chain was exemplary back then, a coast-to-coast enterprise that grew and prospered and consistently produced first-rate journalism.

What has gone wrong since is chronicled in Phil Meyer's "The Vanishing Newspaper" and Buzz Merritt's "Knightfall." The excerpts here go straight to the time the troubles began, the recession of 1990-91 and the prosperous, but oddly pressured, balance of that decade.

The perspectives are quite different. Meyer, who left the business for scholarly pursuits 20-plus years ago, stylishly weaves personal memoir and a perspective on industry history into a series of empirical studies of news quality and business results. Merritt, who has a hand in academia too as a practitioner and theorist of public journalism, is first of all an impassioned in-the-trenches editor. While seeking to avoid nostalgia or score-settling, he can't conceal being frankly teed off at what happened to the company and the newspaper (The Wichita Eagle) where he spent his career.

There is overlap in the accounts. Meyer quotes Merritt on the jolt to Knight Ridder editorial culture when the beloved Jim Batten died and was succeeded by the comparatively frosty Tony Ridder. They don't paint Ridder as a callous villain but argue that he has been unable to articulate an engaged commitment to journalism in the language of the editorial side.

Merritt's account of his final wrenching round of budget cuts at Wichita ends with a decision to discontinue service to 10,000 subscribers in outlying rural areas. That made business sense since advertisers didn't particularly value this readership, but it was a giveaway of the statewide influence The Eagle had built through the years. That matches a favorite Meyer theory -- that the true product of newspapers is influence, and they fritter it away at their peril.

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It should be noted that both books cover a broader turf than these excerpts might suggest.

Meyer's, in particular, is a rich collection of studies that suggest how quality and commitment of resources have eroded over the years, leaving newspapers with plenty of profit but a straight downward trend in circulation and trust.

His studies show a clear correlation between measures of quality and capacity and business success. The trouble is that the relationship appears to be a reinforcing loop in which causation is hard to nail down. It may be, in many cases, as executives and publishers will say privately, that successful papers, especially in growing markets, can simply "afford" a somewhat higher level of journalism.

Further, the evidence suggests that small differences in journalistic quality and news-editorial investment don't make a quick or meaningful difference to the bottom line. It is big departures from the norm, especially in competitive situations -- like those Knight-Ridder approved for The Fort Worth Star Telegram when it was directly challenged by The Dallas Morning News -- that pay off in territorial control and increased revenue.

So the temptation for newspapers companies is to pinch and whittle on news staff and news space. Understandable, maybe, but Meyer doesn't give the executive fraternity a free ride for a collective strategy that is destructive of the core of the newspaper -- its daily report and the influence a good one exerts in a community and confers on advertisers.

The chapter, "How Newspapers Were Captured by Wall Street," points to the element of voluntary surrender as companies chose to go public, either as a device to preserve family control with two classes of stock or to raise a pool of cash for acquisitions. Crusty patriarch Jack Knight told analysts at his first meeting with them in 1981 that "we did not intend to be regulated or directed by them in any respect." But as analysts often point out, you voluntarily join the Wall Street game, you're exposed to the rules of the game, and you're competing for capital with all the other players.

Perhaps the business had been too easy for too long. As Meyer's capsule account of Alvah Chapman's tenure as Knight-Ridder CEO suggests, smooth sailing continued on well into the public ownership era. But when times got tougher newspaper companies went right on "harvesting" available profits; to this day only a minority have been gutsy enough to reinvest in the core franchise or nimble enough to create substantive new media spin-offs.

Merritt tells a version of the same story with a bit less shading and a minimum of theory. He holds up Knight-Ridder as the industry in microcosm, ending up in an unhappy present and future, where places like Wichita get little by way of public service and newspapers are in partial default on their traditional role in informing the democratic process. (Ridder conceded as much at an industry conference a year ago. Asked how he would grade his company's newspapers on public service, he replied, "Some of our larger papers have the resources to do a lot more, but I would say it wouldn't be any higher than a C").

The big point is valid, timely and troubling -- who will do the tough stories and complicated reporting if newspapers don't? Still, many of Merritt's readers, including the legions of Knight-Ridder alumni, will find the spicy particulars of the company history especially engaging. Merritt's research uncovered the disorderly collection of "duchies" that was the Ridder empire pre-merger and the reasons the Knight brothers failed to build a controlling class of family shares into their public offering.

The books end in a very similar place -- the authors expressing a confidence that there will somehow be a continuing market for journalism in electronic formats supported by business models to be determined. The languid pace of book publishing leaves both authors trailing events. The story has ripened in the year since these manuscripts headed into the editing pipeline, and the threat to a traditional newspaper business model and hold on readership is all the more apparent with a host of identifiable non-newspaper protagonists. To my mind, though, that only makes the question Meyer and Merritt pose all the more urgent: doesn't the industry have a more compelling story to tell and invest in than continued profit-taking?