Toward a one newspaper town
Is the St. Paul Pioneer Press doomed? The question is worth asking in the wake of last week's announcement that the investment firm Private Capital Management--the biggest shareholder in the Pi Press' parent company, Knight Ridder--wants out.
There is no shortage of speculation about what happens if the nation's second largest newspaper chain winds up on the auction block. But if KR papers are sold off separately, as some predict, it's a good bet that the McClatchy Company, which owns the Star Tribune, will make a play for the Pi Press.
There are plenty of good business reasons for this. Most obviously, it would give McClatchy virtual monopoly control over advertising rates in the Twin Cities market, thereby boosting earnings at the Strib and simultaneously easing investors' worries at a time when Wall Street is freaking out about the future of the newspaper industry.
But for the folks at Private Capital Management, a McClatchy purchase of the Pi Press would also represent a two-fer. Why? Because, as Pi Press business writer Dave Beal pointed out Saturday, not only does PCM hold a 19 percent share of Knight Ridder stock, it owns 37 percent of McClatchy.
Of course, there is always the possibility that anti-trust regulators might block a McClatchy takeover of the Pi Press. But that's a slim hope. Fewer than 10 newspaper markets in the country are now served by more than one daily newspaper, down from about 50 just two decades ago. That didn't just happen; it happened with the blessing of investors and regulators.