BOTTOM LINE NEEDS TO MAKE ROOM FOR VALUES AS AN ASSET

Guy Gannett sale shows how hard it is to put a price on a public trust

"Family values" is a political buzz phrase that denotes whether a candidate is toeing the line on a number of issues, ranging from abortion to drug abuse, from religion to extra-marital sex. It can cut across political lines (ask Rep. Dan Burton, R-Ind., or President Clinton).

It's too bad the politicos have usurped the phrase; it could mean so much more.

"Family values" sprang to mind as I was reading Senior Editor Pete Wetmore's story inside about the Seattle Times Co.'s acquisition of Guy Gannett Communications' five newspapers: The Blethen family (majority owners of the Times Co.) shares the same values as the Gannett family.

Guy Gannett officials were scrupulous to say that the process of the sale was purely a financial transaction, where no factors other than money were considered.

Nonetheless, Guy Gannett has been a holder of a certain amount of public trust in Maine for a long time. The community may not have agreed 100 percent of the time with the owners of the Portland Press Herald and two other dailies in the state, but it knew that the family had the best interests of Maine at heart.

So it was not unusual that the community became concerned when the Gannett family decided to liquidate its holdings (because no heir was interested in managing the company). A citizens committee was formed, and employees were so upset by the potential of new owners that they organized a drive to acquire the company themselves.

Why did these things happen?

Because the residents of Maine – whether they were community activists or employees – knew there was a potential for someone to come in to run the papers purely for profit, someone who would not share their values.

In a way, this was an indictment of not just the companies that they named (and I won't name them here, but you know who they were talking about), but our entire business.

The perception of the man (or woman) on the street is that publishers are bad – just like polluters, pornographers or politicians. Of course, when you talk to publishers themselves, you learn that they aren't bad people and they frequently don't even have bad policies. To quote Jessica Rabbit from the classic hybrid live-action and animated movie Roger Rabbit, they're "just drawn that way."

So it's interesting that the Gannett family felt compelled to make its choice of an acquirer completely a business transaction. There are certainly issues of returning full value to the heirs of the founders and managers – not to mention an issue of maintaining a status as good businesspeople. But the big question in my mind is: Why couldn't the Gannett family have weighed the values of the potential acquirers along with the financial bids of the acquirers?

Why shouldn't values be an asset?

Strikingly, some of our most successful colleagues – those from the New York Times Co. and the Washington Post Co. come to mind immediately – come from publicly traded companies that continue to be controlled by the families that founded them. The values of the Ochs and Graham families still influence the way these companies are run. And, as the balance sheet and Wall Street show, these values of quality and public service can be enormously profitable.

The era of the family-owned newspaper is probably dead, as the nature of the business has been to consolidate. But the era of the family-controlled newspaper business continues to flourish. Whether that family name is Decherd or Pulliam (A.H. Belo Corp. and Central Newspapers Inc.), Ridder or McClatchy (Knight Ridder and The McClatchy Co.), or Pulitzer or Howard (Pulitzer Publishing Co. and E.W. Scripps Co.), the people who have newspapering in their blood will continue to run American newspapers successfully.

And, in Maine, the community will get a well-known guardian of the public trust, the Blethen family. Residents of Maine may not agree with the Blethens 100 percent of the time, but they will know that the Blethens have the state's best interests at heart.

– David M. Cole

Inside ...

• A family tradition in Maine will continue under another name
• Newsprint hedging: Bringing order to a key expense
• New guns are cocked in the hunt for campaign ad bucks
• Cap Cities' style infuses management of a start-up called Lionheart
• Got empty racks? Start an evening edition
• Paying for 'Net content has a future
• Persons

From NEWSINC., Sept. 14, 1998, Copyright © 1998, The Cole Group. All Rights Reserved.