Ridder Publications, and/or Northwest Publications, etc. (JSK_BE2_F42)

              IlmgM-iMddeF will become ehc and joe mdder
laFgesi aM-naewspaper fom
The largest company engaged almost
wholly in the business of publishing news¬
papers in the United States is being
formed by the merger of Knight Newspa¬
pers Inc. and Ridder Publications Inc.
Stockholder ratification of the plan is
expected to be accomplished at meetings
November 20 in New York and Miami.
After final action November 29 at Rid¬
der offices in St. Paul, Knight-Ridder
Newspapers Inc. will come into existence
at the close of business November 30 with
these salient statistics:
• 35 daily newspapers in 25 cities from
New York to California and Washington.
• 23 Sunday newspapers.
• Average weekday circulation of 3,-
834,116.
o Average Sunday circulation of 4,-
193,348.
• 8 non-daily newspapers.
• 10 morning-evening-Sunday combina¬
tions.
• Nationwide news and feature serv¬
ice.
• National commodity news wire.
® Annual operating income in excess of
$500 million.
• Revenue from advertising and circu¬
lation of $488 million.
o Annual advertising of 928 million
lines.
o 14,500 fulltime employes and 3,300
part time employes.
• Buildings and equipment valued at
$240 million.
• Labor contracts with 55 unions.
o Annual newsprint consumption of
680,000 tons.
• Total assets of $468 million.
• Total operating revenue of $506 mil¬
lion.
® Net income of $36 million.
The merger plan, requiring a two-thirds
vote of the outstanding shares of com¬
mon stock of the Knight and a simple ma¬
jority of Ridder shareholders, has been
certified by the Internal Revenue Service
as a tax-free reorganization. It will be
executed in a series of steps, under the
corporation laws of Delaware, that began
recently with the creation of Knight
Newspapers of Delaware Inc. with nom¬
inal assets and liabilities. Ridder has held
a Delaware charter since 1942.
Knight-Delaware will be merged into
Ridder and an exchange of stock—10
shares of Ridder common for six shares
of Knight common—will convert Ridder
into a wholly-owned subsidiary of Knight.
Newly formed Knight-Ridder will be an
Ohio corporation with headquarters in the
Miami Herald Building.
A new Knight Series One Preference
Stock will absorb Ridder preferred stock
and will be convertible to Knight common
at the rate of 6.4 shares of common for
one share of the new preferred issue.
There are about 4,800 owners of Knight
common and 2,800 owners of Ridder com¬
mon. Preferred shares of both companies
are closely held. Almost half of the 10
million shares of Knight common out-
12
standing are controlled by Knight officers
and directors. Close to 50% of Ridder
common also is controlled by management.
Selling broadcast stations
Under provisions of the consolidation
pact, Knight and Ridder will sell off their /
holdings in radio and television broad-.,
casting companies "on acceptable terms."
Due to the present market conditions and
other factors, the Federal Communica¬
tions Commission has given permission
for the broadcast assets to be placed in
voting trusts so the newspaper merger
can go forward this year.
What distinguishes Knight-Ridder from
other large companies publishing newspa¬
pers is its commitment to that business
alone. Others have diversified properties,
including books and magazines, broad¬
casting, insurance, shipping, paper prod¬
ucts, lumber, etc.
The claim to being No. 1 in circulation
is based on the fact that the Knight-Rid¬
der figure will surpass the aggregate to¬
tal of the Tribune Company group that
includes the New York News, with the
country's largest circulation both week¬
days and Sunday. Recent calculations
gave the Trib group 3,622,524 weekdays.
On the basis of current available sta¬
tistics, the Trib's Sunday papers top the
Knight-Ridder Sunday papers by about
200,000.
Combining the Knight and the Ridder
newspapers had its genesis in conversa¬
tions between two longtime personal and
professional friends, Lee Hills and Ber¬
nard H. Ridder Jr. Beginning about five
years ago they considered the advantages
in group ownership and expansion. The
success which Gannett and a few other
newspaper companies had in offering
stock to the public inspired Knight and
Ridder managements to take the same
route to raise capital for acquisition pro¬
grams. The merger now brings together
two regional groups—Knight mainly in
the East and South and Ridder mainly
in the Midwest and West—into a truly
national network.
As described to shareholders the merits
of the merger are: "a broader and more
diversified income base, greater newspaper
size, mix and geographical distribution,
and a stronger balance sheet."
Both Knight and Ridder "went public"
in 1969 and their stock issues were well
received on the market, both eventually
being listed on the New York Stock Ex¬
change. During 1972, after the two com¬
panies had floated secondary issues, the
price for Knight shares rose to almost $58
and the price for Ridder went as high as
$34.50, with adjustment for splits. In re¬
cent trading Knight has been quoted at
$20.50 and Ridder at $12.50.
Goldman, Sachs & Co., which managed
the underwriting for the Knight offerings,
received approximately $580,000 in gross
commissions (before expenses). For its
assistance in negotiation of the Ridder
merger the same firm received a fee of
oppose merger plan
Two members of the Ridder family have
announced they will vote against the
merger with Knight Newspapers Inc. when
their company meets in New York on
November 20.
In a statement issued by Ridder Publi¬
cations on November 12, it was disclosed
that Eric Ridder, publisher of the New
York Journal of Commerce and Joseph B.
Ridder, publisher of the San Jose (Calif.)
Mercury-News, would vote against the
merger.
Confirmed by Ben Schneider, Bidder's
financial vicepresident, the statement gave
no reason why the two Bidders had made
the decision. They own shares totaling 9.6
percent of the Ridder company. Only a
simple majority is needed to approve the
merger.
$100,000.
Goldman, Sachs has also shared in com¬
missions paid for the Ridder stock issues
handled with Lehman Brothers, the total
amount being about $130,000. The Lehman
house is receiving a fee of $115,000 from
Ridder for its work on the merger.
Knight is continuing the banking invest¬
ment service of Goldman, Sachs & Co. and
John L. Weinberg, a partner in the firm,
remains on the board of directors of
Knight-Ridder. He owns 2,000 shares of
Knight common.
New board of directors
Ridder will have five members of the
enlarged board of Knight-'Ridder. The 10
Knight members will be: Peyton Ander¬
son, retired publisher of the Macon news¬
papers; Alvah H. Chapman Jr., president;
J. Montgomery Curtis, vicepresident/de¬
velopment; Byron B. Harless, vicepi'csi-dent/
personnel; Lee Hills, chairman;
James L. Knight, chairman of the execu¬
tive committee; John S. Knight, editorial
chairman; C. Blake McDowell, legal coun¬
sel ; E. J. Thomas, retired Goodyear Tire &
Rubber Co. executive; and John L. Wein¬
berg, Goldman, Sachs partner.
C. Landon Knight, president of the
Portage Newspaper Supply Co., a subsid¬
iary, and Ben Maidenburg, publisher of
the Akron Beacon Journal, leave the board.
Directors from the Ridder group will be:
Clark M. Clifford, Washington attorney;
Bernard J. Ridder, chairman of the Ridder
board; Bernard H. Ridder Jr., president;
Walter T. Ridder, vicepresident/editor of
the Washington News Bureau; and Ben V.
Schneider Jr., financial vicepresident.
Bernard Ridder Jr. and Schneider will
replace Curtis and Harless on the execu¬
tive committee of Knight-Ridder.
Direct remuneration of seven Knight
directors receiving more than $40,000 a
year ranged from $57,500 for Curtis to
$165,000 for Hills in 1973. For nine on
the Ridder board the remuneration scale
in 1973 varied from $71,570 for Robert B.
Ridder, director of broadcasting, to $124,-
075 for Bernard Ridder Jr., president.
The principal owners of Knight's com¬
mon stock are the brothers, John S. and
(Continued on next page)
EDITOR & PUBLISHER for November 16, 1974