Knight Moves

Jeff Tolbert

When talking to journalists, be it those on his own staff or from other news organizations, Star Tribune publisher John Schueler makes sure to temper management's enthusiasm for doing business on the World Wide Web with a solemn nod to the sanctity of the printed word. Will the Strib's parent company McClatchy Co. continue to toss capital at the still-unprofitable Internet? Yes. Do the changing habits of consumers, especially those who use classified ads, necessitate that the company's 11 dailies commit to a strong online presence? Absolutely. "But," Schueler is known to quickly quip, "as far as I can see, this business will always be about ink on dead trees."

Given how touchy print reporters can get when it's suggested that theirs is a dying art, Schueler's soft-shoe--standard procedure among higher-ups in the McClatchy chain--is not surprising. It also seems to be working. Of the many complaints employees in the Strib's newsroom have about their Sacramento-based parent company (and that list grows by the day), there is seldom mention of, which logs 19 million page-views a month and ranks first among Twin Cities sites.

It seems Knight Ridder, the nation's second largest newspaper publisher and owner of the St. Paul Pioneer Press, could learn a thing or two about public relations from Schueler and his crew. Like McClatchy, Knight Ridder too has an affinity for all things digital. This past fall the Center for E-Business at the Massachusetts Institute of Technology ranked the chain in the top fifth of companies participating in the Internet economy. In part this is because their national network of regional online hubs, which debuted in August under the name Real Cities, is expected to generate $30 million in revenues during the next fiscal year.

Instead of viewing this success as a sign that there is indeed a future for online journalism (which is Schueler's mantra, by the way), Knight Ridder has convinced itself it can compete with the likes of Yahoo!--sites driven by commerce, not content. And as far as many veteran journalists from St. Paul to Miami are concerned, Knight Ridder's top executives aren't even bothering to pay lip service to the importance of online newsgathering.

In early November the San Jose-based company announced that it would be creating, a separate business unit for its 45 local and regional Web sites, including the recently unrolled and Pioneer Planet (the latter of which logs 6.5 million page-views a month). Instead of being overseen by print executives, the subsidiary--scheduled to be in place by March 2000--will enjoy managerial autonomy and financial independence from the rest of the media company.

In part the restructuring is being done in the name of efficiency. Primarily, though, the move is a calculated effort to attract money from venture capitalists who've shown themselves to be slow to invest in big newspaper chains but eager to take a gamble on the Internet.

Given how rapidly the tides can shift on the Web, it's hard to argue with the x's and o's of Knight Ridder's new game plan. If properly managed, a smaller, stand-alone division can more quickly adapt to changing technologies and online fads. (For instance, in 1997 Push technology was all the rage; a year later everyone was pouring their money into e-commerce). "It's a direction that any media company with online ambitions must move," says James Ledbetter, who writes a regular column about new media for the Columbia Journalism Review. "The way things are set up now is a logistical headache. You've got something like 30 papers, each of which is doing something online that has to be coordinated among 30 separate publishers. It's kind of like NATO trying to fight in Kosovo."

But even those media critics who acknowledge that some kind of restructuring was inevitable worry that Knight Ridder, which built its empire with barrels of ink, will eventually turn its best news sites into nothing more than conduits for capitalism. "Once you've decided to take your newspaper content and make it into a viable Web business, something funny happens," Ledbetter observes. "You begin to rely on strategies that are similar to those done on commercial Web sites: online auctions, or restaurant listing designed to encourage reservations. And when you construct a site that way, there's no doubt that you will push the journalism to the margins."

In St. Paul no one seems sure what visitors to Pioneer Planet will see come next spring. Senior online editor Brett Benson points out that the PiPress's parent company is still in "the discussion and discovery stage." The sense in the newsroom, though, is that will be pushed harder than Pioneer Planet, where the daily paper is offered for free. That's because (which has a cooperative relationship with City Pages online) is a portal: a first stop for surfers heading into the Web. Successful portals, such as Yahoo! and Excite, can easily sell advertising because they host a high number of visitors. And, if constructed imaginatively, portals can entice users to stick around to check sports scores, stock quotes, or interactive ads.

They do not, however, offer much in the way of original content. That kind of thing will be at least a mouse click away. "In order for this thing to make money, it's going to have to be spun away from the newspaper, and that's not going to benefit reporters or the people who read our paper," one reporter at the Pi Press complains. "Financially it probably makes sense. But so far it doesn't look like this thing is going to have much to do with the paper."

It doesn't help that Knight Ridder has already told the Newspaper Guild of the Twin Cities that none of the Web employees in St. Paul will be covered by the existing union contract--further evidence that the participation of actual reporters in this new venture will be limited. "The company has told us there will be no guild members laid off. Guild people working online will be given an opportunity to work for the new company as nonunion employees or go to work for the Pioneer Press," Mike Sweeney, the guild's executive officer, says. "All we know is that they're planning on closing the [online] operation at the paper and moving it off site. But they still haven't decided how they're going to set it up or where it's going to be. Will they eventually allow us to negotiate a union contract? My hope is that they will. My guess is that they won't. Knight Ridder isn't exactly union friendly."

In this case Knight Ridder hasn't been very media savvy, either. "If we're going to be successful in the Internet, we've got to be free to compete with everybody," chairman and chief executive officer Tony Ridder told reporters the same day he announced the company's internal split. "If that hurts the print business, we're a separate division and free to operate in a way that allows us to do that."

As if a CEO's admission that he expects to one day compete against his own newspapers weren't enough, Bob Ingle, president of Knight Ridder's new media operations, then publicly predicted a paperless future. "Before too much longer it will be more cost-effective to give away electronic devices than to maintain circulation systems and departments," he told a gathering of newspaper executives from the Midwest earlier this month. "We'd all better keep an eye on the date when it no longer makes economic sense to make investments in press capacity." The former print editor from San Jose then guessed that the newspaper would go the way of the dinosaur within a decade.

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