McClatchy To Buy The News & Observer of Raleigh
RALEIGH, N.C. (AP) _ A century of family ownership at The News & Observer of Raleigh will end in August when it is sold to McClatchy Newspapers Inc. in a deal worth about $373 million.
``You want to be in a position that if you decide you want to sell something, you can sell it on your terms,″ Frank Daniels Jr., president and publisher of The News and Observer Publishing Co., said Wednesday.
Daniels, who previously said he would retire when he reaches 65 in a year and a half, said he will remain as publisher and that his retirement would depend upon the wishes of his new boss. Daniels also is chairman of the board of directors of The Associated Press.
McClatchy’s offer, agreed upon Tuesday afternoon and final Aug. 1, includes about $250 million to buy shares from the private company’s 36 family and 37 employee stockholders and assumption of $123 million in debt. Some of the debt was incurred for plant expansion and the installation of new presses, which is still under way.
McClatchy is publicly held and based in Sacramento, Calif., where it publishes The Sacramento Bee. In all, the company publishes 12 daily newspapers and eight non-daily newspapers on the West Coast and South Carolina.
``McClatchy is a lot like we are,″ Daniels said. ``The thing I like about it is McClatchy is at least as liberal as The News & Observer.″
The newspaper has a liberal editorial philosophy and has endorsed Democratic Party candidates for years.
Frank Daniels III, the N&O’s executive editor, said he will remain in his present position for the foreseeable future and will become more involved in the company’s electronic publishing venture.
The News & Observer, owned by the Daniels family since Josephus Daniels bought it at a bankruptcy auction in 1894, has a circulation of about 153,000 daily and 200,000 on Sunday. Also included in the purchase are six non-daily newspapers, Business North Carolina magazine, Benson Print Company and NandO.net, an on-line information service providing access to the Internet.
News of the sale was broken to the newspaper’s editorial staff by Frank Daniels III at a morning meeting. Standing on a desk in the newsroom, he reminded employees that McClatchy had bought newspapers from The News and Observer Publishing Co. in South Carolina five years ago and had not cut staff.
``They treat their people incredibly well,″ he said.
The News and Observer Publishing Co. has about 900 employees.
McClatchy president Erwin Potts, a North Carolina native, had been a director of The News and Observer Publishing Co., but resigned when told the company was for sale, Frank Daniels Jr. said in a letter to employees.
In the letter, Daniels said McClatchy shared his company’s vision of the future and had the capital to invest to help make the vision a reality.
``Looking 10 or 12 years down the road we do not see any scenario that keeps The News and Observer in the Daniels family,″ he wrote. ``To keep up with a growing community requires capital, but our access to capital is limited.″
McClatchy earned $46.6 million on sales of $471.4 million in 1994. The News and Observer Publishing Co.’s total revenues in 1995 are projected to be $118 million, compared with $107 million in 1994, and come primarily from The News & Observer.
The non-daily newspapers included in the sale are The Chapel Hill News, The Cary News, The Smithfield Herald, the Mount Olive Tribune, The Zebulon Record and the Gold Leaf Farmer of Wendell.