Man Who Forced Knight Ridder Sale
Says Goodbye to Newspapers
By Mark Fitzgerald
Bruce Sherman, whose Private Capital Management (PCM) investment firm nearly single-handedly forced the sale of Knight Ridder -- ushering in the era of Wa
ll Street antipathy toward newspaper stocks -- formally bid the sector goodbye in a series of regulatory filings Thursday.In documents filed with the Securities and Exchange Commission (SEC), PCM said it no longer owned any stock in The New York Times Co., Lee Enterprises or Belo, and that it was effectively done as an investor in The McClatchy Co.
Sherman had signaled months ago that he was through with newspaper investing for now, and Thursday's filings amounted to a final housecleaning.
Still, it was remarkable to see all those 0.0% ownerships of class in filing after filing because PCM not long ago had serious stakes in the nation's biggest publishers.
In September of 2005, for instance, PCM owned a gigantic 37.61% of McClatchy common stock. Thursday, the firm reported that it directly owned no shares at all, and was simply managing on behalf of an investor a tiny portfolio of 9,164 shares.
In that same period, PCM owned a 15.07% stake in the Times Co., an 18.96% stake in Lee, and a 22.31% stake in Belo. It also had substantial positions in Gannett and a small amount of Tribune Co. stock.
PCM was once both an angel and an irritant to publicly traded newspaper companies, buying up their stock -- but also agitating certain chains when he thought their stock performance was lagging.
Knight Ridder was his most famous target. In a November 2005 letter to Knight Ridder's board, Sherman demanded that what was then the nation's second-largest newspaper publisher "aggressively pursue the competitive sale of the company." Nine months later, Knight Ridder had been sold to McClatchy, which then sold off a dozen of the dailies to other companies.
It could be said that PCM stirred the hive of institutional investors and shareholders impatient with the plunging stocks of newspaper companies. Since Knight Ridder's forced sale, the ownership of Tribune and Dow Jones changed hands, the New York Times and Media General have come under attack from restive shareholders, and Belo and E.W. Scripps effectively distanced themselves from the newspaper business with spin-offs.
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Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is E&P's editor-at-large.
Goldsmith made millions of dollars in greenmail, plundering the rubber industry and causing thousands of layoffs to pay him to go away.
ReplyDeleteSherman pillaged and plundered the newspaper industry, in particular Knight-Ridder, but didn't find the pot of gold he expected. However, hundreds of people were dumped from newsrooms and other newspaper departments. And retirees like me had their "lifetime" medical and prescription coverage scuttled. The effect has been a backdoor pension cut (in my case, nearly $1,800 in additional prescription costs, probably more for others).
So Sherman walks away from newspapers. But, like another Sherman, he leaves a scorched earth in his wake.
-- John Olesky