Trials and Stribulations

Staffs gutted. Secrets stolen. A traitorous publisher forced to defend his actions in court. The future has never looked bleaker for the Star Tribune and the Pioneer Press.

Taking the stand in Judge David Higgs's courtroom, Par Ridder couldn't have looked more like a rich boarding-school kid. The 38-year-old publishing scion was decked out in country-club navy blue with a haircut that was square in every sense of the word.

His counterpart, MediaNews CEO William Dean Singleton, a self-made media mogul from Graham, Texas, cracked wise with reporters in the gallery outside the courtroom. Shuffling on legs hobbled by multiple sclerosis, the 55-year-old was in town just to enjoy the show—and to watch Ridder squirm.

The ignoble occasion was a three-day hearing in late June that pitted the Pioneer Press against the Star Tribune, Minnesota's two largest daily newspapers. Ridder had raised eyebrows in March when he announced he was stepping down as publisher of the Pioneer Press to take the top job at the Star Tribune. Ridder's family had run the St. Paul daily for nearly 80 years. In that time, the two broadsheets went to war over scoops, revenues, and readers. To switch sides was the publishing equivalent of treason.

David Kern

But the real bombshell came in April, when MediaNews, parent company of the Pioneer Press, sued Ridder and the Star Tribune in Ramsey County District Court. In unseemly detail, the civil complaint laid out accusations that Ridder stole a laptop computer, sensitive financial data, and top employees when he jumped ship to the Strib.

"This theft of confidential information—and its receipt by the Star Tribune—was a clear violation of the law," one court document reads, asserting that Ridder and others used "wiping programs" to "cover their tracks."

Now, here Ridder was on the stand essentially admitting he had done all he was accused of. He even expressed regret for his actions.

"I would do it differently," Ridder said of taking spreadsheets with him across the river. "I wish I didn't have the information."

But a sense of entitlement still crept in. "I thought I would spend my career with Knight Ridder," he said, referring to the longtime owner of the Pioneer Press. "My family has a long history with that company."

For the two days Ridder was on the stand, the courtroom was the best show in town. So many lawyers populated the gallery that one observer said, "I've tried to tally up all the firms represented here, but I gave up." Laughter rippled through the room when Ridder admitted that he met one exec from the St. Paul paper at a Lund's grocery store in Eagan so that they wouldn't be seen together. Here was a man from a family of millionaires, pulling in nearly half a million a year, reduced to holding a business meeting in the baked goods section of a supermarket.

Like a cat batting around a cornered mouse, Singleton relished every uncomfortable minute. When Ridder's testimony wrapped and court adjourned for the day, Singleton turned to a couple of reporters and chortled, "Now tell me, boys, would you buy a car from that man?"

The last year has been a period of unprecedented turbulence for the state's two biggest daily newspapers, each of which has changed ownership.

The Pioneer Press was first on the auction block. Under pressure from Wall Street, the Knight Ridder newspaper chain sold its 32 daily papers to the McClatchy Company in June 2006. But because McClatchy already owned the Star Tribune, it quickly announced plans to re-sell the Pioneer Press in order to avoid running afoul of antitrust regulations. Denver-based MediaNews then purchased the St. Paul paper and three California newspapers for $1 billion.

Just six months later, McClatchy announced it was selling the Star Tribune, the flagship paper in its chain of 33 dailies. If the sale was a surprise, the price was downright astonishing. Avista Capital Partners, a private equity firm with no prior experience in the newspaper business, agreed to buy the Strib for $530 million—less than half what McClatchy had paid for the paper eight years earlier. McClatchy tried to put a positive spin on the shortfall by pointing out that the sale would save the company $160 million in taxes. But the Strib sale nonetheless became a national benchmark for how steeply the value of daily newspapers has tumbled in recent years.

"I was stunned," says Tim J. McGuire, the newspaper's former top editor. "I didn't realize that revenues had declined quite as much as they obviously had."

The ensuing months have seen continued turmoil. The Star Tribune has undergone two rounds of buyouts, resulting in the loss of 75 newsroom employees—or roughly 20 percent of its editorial staff. Among the departed are many marquee names, including metro columnist Doug Grow, one-time Pulitzer finalist Sharon Schmickle, redoubtable sports reporter Jay Weiner, and political guru Dane Smith. "I've used the term lobotomy to describe it," says Smith, who left in March after 30 years as a Minneapolis daily newspaper reporter.

The bloodletting hasn't been confined to the editorial ranks either. Last week, chief financial officer Mike Riggs announced he was leaving the Strib to take a position with Meredith Corporation in Des Moines.

The news is just as grim across the river. The 380 Pioneer Press employees represented by the Minnesota Newspaper Guild Typographical Union recently began negotiations on a new labor contract with MediaNews. The company, which has a well-earned reputation for cold-blooded fiscal calculations, is seeking a slew of concessions, from cutting gas reimbursements by 30 percent to allowing for unlimited use of freelance workers.

Next Page »