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A CEO's Passion for Papers

Gary B. Pruitt's bid for Knight Ridder reflects his against-the-grain view of the industry.

March 14, 2006|James Rainey and Marc Lifsher | Times Staff Writers

SACRAMENTO — Gary B. Pruitt says that he would have been perfectly happy to remain in his former career as a 1st Amendment attorney -- fending off libel suits and arguing for the public's right to know on behalf of the Sacramento Bee and other McClatchy Co. newspapers.

Even after taking the helm of the McClatchy chain a decade ago, Pruitt maintained his everyman image -- chatting with journalists about his beloved Rolling Stones, eating in the employee cafeteria and refusing to lay off workers, even in hard times.

But Pruitt's calm and unassuming demeanor doesn't begin to reflect the 48-year-old's competitiveness and passion for newspapers, friends and co-workers say. Those characteristics came into clearer view in the last few days, as he pushed McClatchy past bigger rivals to a successful bid for Knight Ridder Inc.

Under the $4.5-billion deal announced Monday, McClatchy would become the nation's second-largest newspaper chain and Pruitt would emerge as America's newest media master -- heading an empire that would boast 3.2 million readers at 32 papers.

The deal reflects Pruitt's against-the-grain view of the newspaper industry's future.

"I understand the conventional wisdom that we are in a bad business," he said.

"But I also think the conventional wisdom is wrong," he added. "And if you look at our audience in print and the unduplicated reach of our website and direct mail, our audience is growing, even with circulation down. That can't be said of many media businesses. And that is hardly the profile of a dying industry."

Even so, several major newspaper chains saw their shares plunge by 20% or more last year as advertisers shifted resources to Google Inc. and other Internet portals. McClatchy's own 20-year run of circulation growth ended.

One of Pruitt's biggest challenges would be reassuring Wall Street investors who have seen other media mergers founder (McClatchy's stock initially fell nearly 8% on Monday before recovering to $51.55, a decline of $1.51, or 2.9%). He also would have to pay down $2 billion in debt with the sale of 12 Knight Ridder papers that don't operate in the high-growth communities McClatchy prefers.

Pruitt and his top managers were scheduled to be in Miami today to visit the Herald, the largest of the Knight Ridder papers that would join McClatchy. Then it's on to a meeting in Naples, Fla., with Bruce Sherman, the Private Capital Management fund executive who drove the sale when he complained about Knight Ridder's performance.

The following two weeks are filled with more meetings -- with investors, journalists and managers of other Knight Ridder papers.

McClatchy papers have been known for solid if not spectacular journalism, garnering five Pulitzer Prizes since 1935 (not counting Pulitzers won by papers that were later acquired by the chain).

Descendants of its Gold Rush pioneers still hold a controlling interest in the McClatchy operation. Pruitt, who earned $2.2 million in 2004, would be challenged to produce the steady circulation and revenue growth that has made the company a Wall Street favorite, while maintaining the benevolent, public-spirited management that has been embraced by employees.

"Pruitt and the McClatchys have always been the good guys before," said one worker, who asked not to be named because he was not authorized by the company to speak. "It might not be as easy now."

If somewhat unknown to the media's Eastern establishment, Pruitt has long been a golden boy within the McClatchy chain, whose stock gains have been second only to those of E.W. Scripps Co. papers over the last decade.

Born in Virginia the youngest of four children and raised not far from the Kennedy Space Center in Satellite Beach, Fla., Pruitt grew up bodysurfing and playing tennis. He studied political science at the University of Florida before earning a master's degree in public policy and a law degree at UC Berkeley.

After a short time in private firms, he joined McClatchy in 1984 and instantly became a favorite of journalists and free speech advocates because he pushed hard to get reporters' stories in print.

"He feels very passionately about the rights of reporters and editors and the important work that they do," said Kelli Sager, a media lawyer for the Los Angeles Times and other publications who worked with Pruitt years ago. "He makes sure news is being reported and issues aren't being sidestepped just because it might be difficult."

Sacramento Bee reporter Denny Walsh recalls that Pruitt beat back a libel suit by then-U.S. Sen. Paul Laxalt (R-Nev.) over a 1984 story. The piece said that Internal Revenue Service agents suspected that gambling winnings at a casino owned by Laxalt's family were being skimmed to avoid taxes. Laxalt sued for libel, and the Bee countersued.

Asked what made him proudest from those days, Pruitt said: "I cleared thousands of news stories and never killed one.... I loved being a 1st Amendment lawyer. It was a great job. I reluctantly left it."

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