Brethren, our brother, Tony Ridder, is trying to win a losing battle. As the CEO of Knight Ridder he’s suffering deep casualties on his two major fronts. One being the incessant pressure from his shareholders and Wall Street to maximize profit and the other, the pressure from the journalism community and his employees to strictly adhere to the sacrosanct codes of journalism. These two demanding parties are at loggerheads. Tony, in his attempt to satisfy them both, has ended up doing just about the opposite.
His concentration, from the onset, was the financial improvement of Knight Ridder
Tony Ridder assumed office of the CEO when the stock price of Knight Ridder was $26 and their revenue was $2.2bn. His sole aim, it seemed, was to elevate these numbers. Notably, he did just that by utilizing methods like selling off loss-incurring properties and forcing cuts at underperforming papers.
Downsizing
In response to the economic downturn, and in pursuance of his ambitious goals, Tony reduced the staff strength of Inquirer and Herald by 11%. He also laid off staff from Mercury News amidst loud protests from senior publishers. This communicated a disregard for the welfare of his labour force in favour of financial gains; a position his former well-regarded publisher at Knight Rider, Jay Harris, described as a “myopic focus on numbers”. Jay, like a few other notable officials in the company resigned when they realised that the principles of good journalism were being sacrificed for better profit margins.
Changes to the Operating Assumptions
He individualized the profit targets for each newspaper under Knight Ridder. This was a dramatic shift from the status quo of operations. Lesser performing newspapers, whose deficiencies were formerly covered by the bigger newspapers, were now required to fend for themselves with regards to profitability goals. This further drove home the narrative that journalistic integrity and purity was being traded in for a healthier balancing sheet.
He tried to distance himself from the cuts
At the aggravating point of his challenges, Tony tried to distance himself from these sporadic cuts. This, he did from inside the company by weaponizing the chain of command and handing down nearly unachievable profit margin benchmarks. Separating himself from these decisions was far from what one would expect from a leader.
He still disappointed Wall Street
Despite all the cuts, sale of properties and general financial improvements to Knight Ridder (at the expense of Journalism), Tony still did not live up to the hefty demands of wall street. The Street expected a 25% profit margin compared to the 18.4% Knight Ridder attained in 2001, it lso demanded lower staffing as the ratio of Knight ridders staff to paper sold was much higher than the industry average. These were all still separate from the impending 1.5% industry revenue decline about to hit the newspaper industry in the coming year.
Tony Ridder is caught in your typical “damned if I do, damned if I don’t” web. What should he do? Honestly, if you ask me, na who I go ask? I’m just a Lagos boy, running MBA and hustling to get my green (moneywise and ‘blogwise’).
He can consult my good friends at Gravity Payments though. I’m sure Dan would have just the right Price for him. See what I did there? No? Okay.
Love and Light.
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