Industry News

No Major Changes, New Owner Tells Pioneer Press

John Welbes, St. Paul Pioneer Press

The fate of the Pioneer Press became a little clearer Thursday as William Dean Singleton said the newspaper won't see major changes after his company becomes its owner sometime this summer.

"You're joining us because we want you," Singleton, the CEO of MediaNews Group Inc., told employees packed into a stifling conference room. "We think there's a lot of opportunity here, and if we didn't want it, we wouldn't have bought it."

His arrival at the Pioneer Press followed the announcement Wednesday of a four-paper acquisition by MediaNews, which is based in Denver. Singleton's company, teaming with Hearst Corp., is buying the St. Paul paper and three California papers in a complicated $1 billion deal.

The deal, expected to close this summer, won't cause the loss of jobs, wages or benefits at the Pioneer Press, Singleton said. He added that the status of the newspaper's labor contracts, which cover about 90 percent of its 960 workers, will be up to local management. Publisher Par Ridder will remain with the newspaper, he said.

"We've been in competitive markets, and we thought it'd be fun" to enter another one in the Twin Cities, he said. MediaNews owns 49 daily newspapers, the largest being the Denver Post and the Detroit News.

Sporting a navy pinstripe suit and a bit of a drawl, Singleton said he intends to continue competing with the Minneapolis-based Star Tribune. That will involve going after growing areas on the fringe of the Twin Cities and trying to take away market share.

He said he's "totally on board" with the newspaper's current strategy, which involves pursuing local news and local advertisers — both large and small — to keep the paper growing.

"You'll be happy after the closing," Singleton said. "You will barely know it happens."

Singleton said that given the challenging newspaper industry environment, he couldn't promise there would never be layoffs at the paper. But he added if there are, they'll be in response to local market conditions.

Singleton generated laughter and applause when he explained why he won't pursue a joint operating agreement with the Star Tribune.

Such a deal allows newspapers to combine business operations while maintaining separate newsrooms — a cost-saving move. But he said regulators only permit that in a market where one of the papers is failing. The Pioneer Press isn't failing, he said, and "the Star Tribune isn't failing — yet."

Afterward, several employees said they found the meeting reassuring.

"I think it kind of eased my mind," said Aric Sorenson, an advertising account executive. He said he is glad that he can now answer advertisers' questions about the newspaper's future.

Because Ridder will remain as publisher, it's also expected that his team of top managers will remain.

The newspaper industry as a whole is working through tough times, as more advertisers are taking their ads to specialized online sites and fewer young people are subscribing.

Singleton said he and the top people at his newspapers are trying to craft the best strategy for growth on the Internet side of the business.

"Long term, we've got to get paid for news (online) or we can't keep producing it," he said. But he said that has to be an industry-wide solution and not just one paper acting alone.

Larger issues still surround McClatchy's deal to buy Knight Ridder, the Pioneer Press' parent company. McClatchy, which owns the Star Tribune, is selling off 12 of Knight Ridder's 32 newspapers — including St. Paul — to help finance the deal. McClatchy said antitrust issues in the Twin Cities prompted its sale of the Pioneer Press. MediaNews' $1 billion deal also includes the San Jose Mercury News, Contra Costa Times and Monterey County Herald, all in California.

On Thursday, a union that represents hundreds of Pioneer Press employees said that the four-newspaper deal announced Wednesday "warrants closer scrutiny by regulators, shareholders and communities" served by the newspapers.

Linda Foley, president of the Newspaper Guild-Communications Workers of America, said a small circle of companies that dominates the newspaper industry just got smaller, and antitrust concerns need to be examined.

Some of those reviews already are under way. The U.S. Department of Justice recently told McClatchy that it's seeking additional information about the Twin Cities newspaper market.

That second review for the Twin Cities area might slow things down, as the Justice Department can take more time to complete its work, said Stephen Barnett, an antitrust expert and law professor at the University of California-Berkeley.

The pending sale of the Pioneer Press to MediaNews, though, could speed it back up, he said. Once McClatchy sells the paper to someone not currently competing in the Twin Cities market, he said antitrust pressures are relieved.

"It's a capitalistic economy, and McClatchy can decide to sell to anyone it wants to, other than a competitor (in the Twin Cities market)," Barnett said.


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