Knight Ridder was up as those who invest money in American newspapers have got accustomed with large profits, a teacher on management at the University of Georgia Conrad Fink assures. Investors were also frightened with analysts’ allegations on the market of a printing mass media as having no future.
The Washington Post representative Deborah Howell is sure that all the American city newspapers face similar problems: low circulation (thus, the audience of Washington Post has decreased to 7 % since 2003), stagnated profits for advertisements and expenses increase. To remain alive, the newspapers have to pull in their belts.
Knight Ridder had also been following the politics of expenses minimization for not only a year. Once, the newspaper which was in the Holding – Philadelphia Inquirer had a wide net of correspondents’ points all over the world: in Moscow, London, Jerusalem, South Africa, New Deli and Berlin. Now only one special correspondent point of this net is left – in Jerusalem. And Miami Herald also has one foreign employee in Bogotá, which had its own correspondents in Beijing, Berlin, Jerusalem, Rio de Janeiro and Salvador before.
However, it is not possible to solve all the problems of a publishing business just by expenses decreasing. Moreover, it may become even worse. According to the annual report of the school of journalism at the Columbian University, the wide spread Internet did not result in news number increase.
Experts agree in opinions that newspapers should change. The problem is that no one knows in which way. Commenting upon the sale of Knight Ridder, Deborah Howell from the Washington Post writes that it will be possible to stop circulations decreasing if a newspaper lesser cares about prestigious journalistic awards but more for readers.
The chief of News Corporation Rupert Murdoch thinks otherwise. According to him, that mass media which hoped for their past will be buried in oblivion. Those chosen a new and correct way for content presentation will survive. At the same time Murdoch asserts that they will change not only the way to present a context but also the way of newspapers and magazines reading, watching TV and listening to Radio. One of the most influential managers in the world of media managers considers that in future mass media will differ lesser from fast food. “People will watch news, sport programs, films on the way. That will become possible thanks to cell phones and pocket PCs (like Sony Playstation Portable)”, Murdoch considers.
Still in November observers stated that the sale of Knight Ridder is to show how many investors believing in newspapers’ future there are in the US. In spite of the suggestion on purchase made by the largest in America newspapers publisher Gannett, the majority of serious players in the market (Washington Post Company, Tribune Company and Dow Jones are among them) have ignored the news on Knight Ridder sale.
When last week the American regional newspapers publisher McClatchy announced about the purchase of Knight Ridder for $4, 5 mld, experts appreciated the news. However, they lost optimism the following day when it became known that the new owner was going to get rid of several purchased newspapers.
Total 12 editions were up, including Philadelphia Inquirer which was one of the oldest American newspapers. McClatchy’s representatives say about their intention to sell the newspapers published for stagnated markets. It is of a special curiosity that the money from the sale of newspapers is to be paid for McClatchy’s deal with Knight Ridder. That means on practice that the assets are to be resold on purpose to get profits from the difference between the sell and buy prices. Or we speak of speculation according to dictionaries determining similar deals this way.
In the last year end, when Knight Ridder was up, some asserted that the deal had indicated the market maturity. “When profits get lower, the best way to increase them is to cut down the expenses”, as the vice-president of the research company Borrell Associates Colby Atwood says. At the same time, he reminded that making a company large is one of the ways to minimize expenses.
The purchase of Knight Ridder and the following sale of 12 newspapers put such estimation under doubts. Speculators celebrate when serious investors stop getting interested in the market.

Andrey Lomkin