Warthen the Red

Comerade Brad takes time out of his busy day to inform us that "the market makes no sense." Perhaps it makes no sense to him. Then again, no one ever accused Brad Warthen of having the intellectual heft of, say, a John Kenneth Galbraith or a Snoop Dog.

Brad can't understand why Wal-mart is considered a better investment than The State even though the latter has higher profit margins.

Let's put it this way: Wal-Mart has over $200 billion in market capitalization. They have over $300 billion in sales. They have over $4.5 billion in the bank. They could buy Knight Ridder in cash tomorrow and it would look like a rounding error on their balance sheet.

But perhaps more important than the statics are the dynamics. People aren't wondering whether retail shopping is going to exist in 15 years. They do wonder whether newspapers can possibly sustain themselves. Arrogant, badly written, out-of-touch, low-value-added newspapers are worst—and that's where The State and Knight Ridder come in.

The investors are playing with their own money. They're smart. They can see the handwriting on the wall. And maybe they're getting out while there's still time.

Does Brad Warthen Read his Own Newspaper?

The State dutifully reports that state government has found that it's spending $7,500 a shot for a piece of paper—"National Board Certification" for teachers—that has zero added value. (Unsurprisingly, Inez Tenenbaum defends the program.)

Will Brad Warthen remember this fact the next time he lectures us on how well our government runs the public schools?

The State under siege: poor profits, bad reporting, mismanagement to blame?

It looks as if Knight Ridder, the parent company of The State, is for sale.

We've long since stopped relying on that newspaper to tell us anything intelligent about the world around us. But never does The State come closer to being useful than when it's pontificating about...itself.

So what's the upshot? It looks as though investors who actually held stock in the company found that it was being managed—how to put this gently?—imprudently.

A man named Bruce S. Sherman, whose Private Capital Management company owns 19 percent of Knight Ridder’s stock (even more than I do) wrote a letter telling the corporate brass to put the company up for sale, or else. Last week, the company took a step in that direction. But while the stock has jumped up close to the price at which I bought it, nobody has rushed to scoop us up yet.

Could it be the case that rampant bias had taken the place of maximizing value for the shareholder, reader, and community? Is it possible that agenda-driven coverage had displaced straight reporting and timely, unvarnished news delivery?

We can't be sure but all media accounts report that the situation is dire:

Knight Ridder Inc., the second-largest newspaper publisher in the country, is under attack from its largest shareholders, who are demanding that the company be sold....Yet as Knight Ridder moved to please stockholders by buying back shares, the increased borrowing led to two downward revisions in its credit rating

Now it looks as if shareholders—people like you and me—are finally looking to fight back and turn a profit after years of lazy and inaccurate reporting made the newspaper conglomerate a money-loser. The complacent "journo" types are worried:

Question: What would it mean for a nonmedia investment, or financial, firm to buy Knight Ridder?

Answer: The fear among journalists is that such a purchaser would not consider public service reporting a priority, said Randy Covington, director of Columbia’s IFRA Newsplex. Instead, a financial firm could focus solely on maximizing profits.

How about this? What if The State and other Knight Ridder newspapers would actually focus on getting the news to their communities? You remember "the news:" a bunch of facts on issues of the day in their community. No fancy rhetoric, no furrowed-brow analysis, no hand-wrenching/navel-gazing bloviating on the place of journalists in society. Just the facts.

It's no wonder that The Wall Street Journal is pessimistic about the prospects for selling a bunch of "mostly second-rate newspapers."