McClatchy CEO knows what we all want

April 23, 2008

You can say one thing for Gary Pruitt , McClatchy’s CEO and perhaps the most ardent defender of the newspaper business — he knows what we all want.

Here’s his comment from the analyst call he did today to discuss McClatchy’s first-quarter earnings :

We want to make sure we maintain our ability to generate revenue.

Who could ask for anything more?

Pruitt also showed off his lighter side in an exchange with Goldman Sachs’s Peter Appert. When the analyst said he was going to ask an unfair question, Pruitt responded, “That’s because I’m going to give you an unfair answer.”

Cue laughter, then cue crying because Appert’s question is at the heart of what most newspaper people want to know: Isn’t there a point where you can’t cut your way to profitability anymore?

Pruitt’s answer:

We feel we have no choice. Given the revenue trends, we’re simply going to have to reduce costs. We do believe that we can sustain a good record on costs throughout this year. We face increasing newsprint prices later in the year and that will work against us. But on the other hand, we are looking at further efficiencies throughout the company and we suspect that when you exclude any severance costs and the effect of newsprint pricing, we should be able to sustain a double-digit run rate on expense decline.

(Photo: Reuters)


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Those sickening sounds you hear are ice cracking under Pruitt’s feet as he now joins Gatehouse, Lee and other debt-laden news operations throwing the crew overboard to save the ship. He doesn’t have much choice, given MNI’s stock collapse, and the debt load he recklessly took on buying KRI. He should have waited and bought at the bankruptcy sale if he wanted those properties.

Posted by edward | Report as abusive

It’s hard to know what to wish for anymore. It’s easy (hey me too) to get rankled by the business types who want to cut to the bone and who use corporate speak – making it seem as if they could just as easily be selling Coke or bunion pads.

On the other hand, you don’t have to be a Wharton MBA to know that there are genuine and huge obstacles ahead. And they won’t be solved by shorter stories, better headlines or more enterprize. It’s a business problem that will have to be solved – or that won’t be solved – by the guys with the nice suits and haircuts.

I do know that most newspapers are doing things horribly wrong right now. Very few are charging for online content, or requiring that readers be a subscriber. I understand why that is – trying to build an online presence in a hurry. On the other hand, imagine two lemonaid stands – at one you get the product free, at the other you have to pay. The drink is the same – except, with the online version you get extra stuff … a few more cookies.

So the death of the printed newspaper becomes a self-fulfilling prophecy – you shift staff to online, you trim what you spend on print and buff up what you do online. And the newspaper gets thinner and the online product gets fatter. Then you sit there fat, happy and amazed that you have continued decline in print.

Posted by Susanne Ross | Report as abusive

In reference to further efficiencies, could we take a second look at, say, Pruitt’s $4.2 million in total compensation for 2008. Then how about this proliferation of McClatchy vice presidents for operations, who must have a hell of a job finding much to operate these days. There is a price for failure, and I don’t see why the indians have to pay for it, and not the chiefs.

Posted by ted | Report as abusive

To Susan: If my memory serves me correctly, I believe Pruitt said the company’s online revenue was more than 11% of the total advertising revenue. I also remember their online revenue last year was something like $175 million.

Posted by Print Lover | Report as abusive

Ted is absolutely correct. Why are Pruitt and others at the helm in this industry continuing to take massive pay in the face of job losses and other cuts. Come on, Gary. Take one for the team! Can’t you get by on say – oh, I don’t know – $100,000 a year until you figure this thing out? Aren’t you embarrassed when you cash that check every week while you’re slashing jobs?

Posted by AJ | Report as abusive