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"Good 5 Cent Cigar"----Student newspaper at the University of Rhode Island

    The Kansas City Business Journal is reporting (1/24) that Knight Ridder Inc., parent company of the Kansas City Star, is looking at cuts in staff and benefits and reducing its news hole to make the newspaper more attractive to potential buyers. 

    Rumors that Gannett Co. might be interested has Star employees very nervous since the nation's largest newspaper chain has a reputation for major cutbacks in the newspapers it takes over. 

Star's owner considers cuts in staff, benefits

Knight Ridder Inc. is considering cutting jobs and benefits and shrinking its news pages to make itself more attractive to potential buyers, the Wall Street Journal reported Tuesday.

Knight Ridder (NYSE: KRI), based in San Jose, Calif., is the nation's second-largest newspaper company behind Gannett Co. Inc. (NYSE: GCI) of McLean, Va. Knight Ridder owns 32 daily newspapers, including The Kansas City Star, the Philadelphia Inquirer and the Miami Herald.

Knight Ridder said Nov. 15 that it was exploring a possible sale of the company among "strategic alternatives" to improve its value for shareholders. A few days earlier, the company's largest shareholder, Private Capital Management LP, had said in a regulatory filing that it may propose its own slate for the company's board at Knight Ridder's 2006 annual meeting.

The Wall Street Journal reported Tuesday, quoting but not naming sources familiar with presentations Knight Ridder has made to potential buyers, that the company plans to improve its margins by as much as $150 million.

A Knight Ridder spokeswoman couldn't be reached for comment.

Among the groups that Knight Ridder has reportedly made presentations to are privately held MediaNews, which publishes 50 papers including the Oakland Tribune and the Denver Post; McClatchy Co. (NYSE: MNI), based in Sacramento, Calif., which owns 12 dailies, including The Sacramento Bee; and private equity firm Texas Pacific, which has been reported to be working with private equity firms Thomas H. Lee Partners, Hellman & Friedman and Bain Capital on a possible joint bid.

The Kansas City Star has more than 1,600 employees, according to a profile on the Knight Ridder Web site.

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