101 YEARS OF DANIELS OWNERSHIP END WITH THE STROKE OF A PEN
Light-hearted decorations on the statue of Josephus Daniels mark a momentous day in the history of The News & Observer.
STAFF PHOTO BY ROGER WINSTEAD
Sale of N&O completed
Few changes expected with transfer of ownership to McClatchy
BY KYLE MARSHALL
STAFF WRITER
The News & Observer’s sale to McClatchy Newspapers Inc. was completed quietly Tuesday, closing a deal worth about $373 million and ending 101 years of ownership by the Daniels family.
The change in ownership was accomplished with a few strokes of the pen Monday and wire transfers of money Tuesday.
About the only things noticeably different were the decorations that appeared on the statue of Josephus Daniels in Nash Square across McDowell Street from the N&O building. The likeness of the man who bought the paper at a bankruptcy sale in 1894 was festooned with streamers and bal-loons, probably done under cover of night by N&O employees.
The only potential hang-up came Monday when Ad/Sat, a company that delivers national advertising to local newspapers, sought to derail the sale on the grounds that McClatchy’s purchase will make the Raleigh newspaper market anti-competitive.
That effort was turned aside by a federal judge in California late Monday.
Even if the closing was uneventful, The News and Observer Publishing Co. unquestionably entered a new era Tuesday morning. The company’s management now will report to the top people at McClatchy headquarters in Sacramento, Calif. And no longer will The N&0 be among the nation’s biggest family-owned, independent daily newspapers.
But the transition from ownership by a Raleigh family to ownership by a publicly held company 3,000 miles away will be marked more by what doesn’t change than by what does.
The name and appearance of The N&O will stay the same. The N&O management will remain in place, including Frank Daniels Jr., who stays on as publisher, probably until his scheduled retirement next year.
The paper’s editorial page is expected to remain the same, right down to the quote from Josephus Daniels’ will. Likewise, news coverage won’t be significantly different, executives of both McClatchy and The N&O have said.
Also, the installation of new presses, a $40 million project expected to be completed next spring, will continue on schedule.
The N&O’s New Media division, which oversees NandO.net and other electronic publishing ventures, will continue to operate. McClatchy and N&O executives are discussing how New Media will fit into McClatchy’s corporate structure.
Gary Pruitt, president and chief operating officer of McClatchy Newspapers, said the sale “went very smoothly when you consider. the size of the deal and its complexity. The more we got to know the company and the market, the better we felt.
“The two things that were most encouraging were getting to know the employees of the paper a little bit and the management staff,” Pruitt said. “Frank Daniels Jr. and his team had plans that existed before McClatchy bought it. We at McClatchy plan to have those folks continue to run the paper and make the decisions. They know the market. We don’t feel comfortable substituting our knowledge for theirs.” Daniels said he has had no second thoughts about selling the company since the sales agreement was announced in May.
“We’re comfortable with the fact that it’s the right thing to do for the community, the family and the employees,” he said. The publisher said he has been familiar with McClatchy since the company bought five smaller newspapers in South Carolina from The News and Observer Publishing Co. in 1990.
McClatchy also owns daily newspapers in Sacramento, Fresno and Modesto, Calif.; Tacoma, Wash.; and Anchorage, Alaska. The company’s financial performance has been solid in recent years, reaching record net income last year of $46.6 million on revenue of $471.4 million.
But the Sacramento Bee, McClatchy’s biggest newspaper, expects to feel the effects of the closing of McClellan Air Force Base near Sacramento. On Mon-day, the newspaper began offering early retirement incentives to 56 managers and supervisors in an effort to cut expenses.
Daniels said his family was not forced to sell The N&0. But such pressures might have built in the next few years due to difficulty in raising new capital to grow with the Triangle market.
“What I have consistently said is it was pretty much our belief that we were going to want to sell,” he said. “It then became a question of not if we were going to sell, but when. It just was the right time to do it. And, I think, the right buyer.”
Daniels didn’t display sadness over the passing of the paper to people whose last name isn’t the same as his.
“I don’t think having someone in the family [at The N&O] is all that important,” he said. “I hope whoever is running the paper in 50 years is someone with the strong belief that the newspaper speaks up for people who don’t have anyone else to speak up for them.
“It’s important for it to be the ‘tocsin,’ ” he said, referring to a portion of his grandfather’s will reprinted on the editorial page, which advises future owners to continue the paper’s role as both a warning bell and a voice of justice for the underprivileged. “Any newspaper should be ahead of its community.”