McClatchy Co. (MNI) Chief Executive Gary Pruitt resigned from four family trusts that control about 41 percent of the newspaper company's voting power.
The trusts hold 12.5 million Class B shares, the Sacramento, Calif.-based company said in a regulatory filing Friday. Pruitt holds 1.2 percent of the Class A shares that have one-tenth the voting rights.
The 51-year-old executive's departure as co-trustee could be a sign that the founding McClatchy family plans to review its options for the company, said Ken Doctor, an analyst at media consultant Outsell in Burlingame, Calif.
McClatchy, which owns The Miami Herald, has lost 93 percent of its market value since March 2006, when Pruitt announced the $4.1 billion acquisition of Knight Ridder.
''They've got to be looking at some kind of a financial restructuring,'' said Doctor, who worked at Knight Ridder before McClatchy bought the company.
McClatchy climbed 20 cents, or 5.8 percent, to $3.66 Friday in New York Stock Exchange composite trading and has dropped 71 percent this year.
The family may be looking at a range of options, including a change of leadership, diversifying its holdings or a going- private transaction in which Pruitt may even participate, Doctor said. Pruitt isn't a family member, he added.
''You can't be on both ends of the transaction,'' Doctor said.
Will the McClatchy family join with Pruitt to take McClatchy private? Or, is the family about to dump Pruitt? Or, maybe assemble a leadership team which includes Pruitt?
The company is overburdened with debt and hasn't had success getting its internet operations competitive. For McClatchy to show it is committed to becoming a successful company, McClatchy needs to give Pruitt his walking papers. But, given the track record of the McClatchy family, I'm betting they will stand by Pruitt as he steers the company right into the ditch.
Coincidentally, McClatchy Watch has been taking a close look at Gary Pruitt this week. Friday we went back in the time machine and looked at Pruitt's 2007 video to employees after the Knight Ridder deal was closed. Also Friday we raised questions about Pruitt's Hawker jet. And, we've been running a poll for readers to pick a theme song for Gary Pruitt. (The poll is still open if you want to help pick the song.) I expect to announce the winning theme song on Sunday.
Stay tuned as more details emerge.
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Should McClatchy's Gary Pruitt take a pay cut?
4 comments:
...Perhaps this slight rise in stock price and movement in the Titanic's deck chairs represents the insider trading that will inevitably preceed any real decision. If they're gonna sell McClatchy, it would probably be better to do so before all they have left is a hole in the water where they used to reside.
Yeah, McClatchy's stock will probably go up Monday, and maybe a few days after that.
Gary Pruitt got a vote of no confidence from the board of directors, and now is arranging his affairs in preparation for a departure within days. After this disaster, he is being allowed to resign. Wait and see it unfold.
Speculation that the company is going private is nonsense. This company is in no position to go private because it is already choking on its debt. Although they might want to do this, they do not have the credit standing to raise the money needed to buy out shareholders.
I'm expecting anyone who takes Pruitt's job will make a a clean sweep of corporate offices, get rid of these six vice presidents. It will be very messy for a while, but housecleaning long overdue.
What has astonished me is the McClatchy clan's catatonia as Wonder Boy Pruitt took the company down. The bleeding of wealth is almost beyond comprehension.
This joker had no idea of the black hole awaiting in the Knight Ridder deal.
Pruitt has his stash. Now get rid of him, at long last.
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