BOB GARFIELD: This is On the Media. I'm Bob Garfield. On Sunday night, the newspaper chain Knight Ridder, publisher of 32 papers across the country, was bought by the McClatchy Company, a publisher roughly half its size. The sale came after shareholders, disappointed with the performance of Knight Ridder's stock, forced the company onto the auction block. Because of the scale of the purchase, McClatchy announced its plans to keep only 20 of the freshly-bought papers. The rest will be again put on the block, bringing no end of insecurity at papers in San Jose, California; Philadelphia; Akron, Ohio; Aberdeen, South Dakota; Monterey, California; Duluth, Minnesota; Grand Forks, North Dakota; Fort Wayne, Indiana and St. Paul, Minnesota. Some fear that the purchase and double purchase of these properties will affect the quality of their reporting and is yet another indicator of the woeful state of the newspaper industry. Buzz Merritt was a Knight Ridder employee for more than 40 years. He ultimately retired as editor of the Wichita Eagle and is author of Knightfall: Knight Ridder and How the Erosion of Newspaper Journalism is Putting Democracy at Risk. He joins us now. Buzz, welcome to the show.

BUZZ MERRITT: Thank you.

BOB GARFIELD: Was a time when Knight Ridder was, I think, widely considered the gold standard of newspaper chains. The last four or five years, particularly the last two years, I would say, has seen that reputation just completely obliterated. Tell me what's happened to Knight Ridder.

BUZZ MERRITT: Well, the economic pressures from Wall Street were just beating the company up something terrible because Knight Ridder only had one tier of stock. Stockholders, once the Knight and Ridder families were virtually out of it, the shareholders controlled the company and Wall Street controlled the goals that were set for the company.

BOB GARFIELD: Historically though, it has been a publicly-held company. How did Knight Ridder in the '70s and '80s and into the '90s manage to stay synonymous with quality journalism while, at least nominally, meeting the profit expectations of investors?

BUZZ MERRITT: Well, I think a number of things happened. One is the leadership of the company changed over time. Another was that the whole attitude of Wall Street changed to the go-go '90s Wall Street that demanded increasing profits every quarter, if not every week. Knight Ridder and other companies with single tiers of stock have virtually no defense against that. The only option, when the demand is for ever-increasing profits, one is to increase the revenue and the newspaper environment was not right for that, so all that was left was to cut costs. And when you cut costs in a newspaper company, you're taking reporters off the street and editors out of the offices and doing things that contrive to drive readers away, and it only reinforces the problem. It was, I think, terrifically ironic that the things that Knight Ridder felt it had to do in the way of cutting costs were to save the company from precisely what has happened, from a takeover.

BOB GARFIELD: In fact, it's your view, is it not, that rather than the Internet being the greatest peril to the newspaper business today, that it's Wall Street itself and its unrealistic expectations for 20, 25, 30 percent profit margins from newspaper chains.

BUZZ MERRITT: Yeah, it's not just that it's 20 percent. Historically, newspaper operating returns have been very high. You had to be pretty stupid not to make a lot of money with a newspaper for about 60 years in this country. But it's the ever-increasing expectation if you did 20 this year, then next year you better do 22 and the next year after that 25. And there's a point at which the only way you can do that is to cut costs. Now, the issue for me is not so much can we save newspapers? The issue is can we save newspaper journalism and get it migrated onto the Internet and these other platforms before it's totally eroded by the economic pressures?

BOB GARFIELD: Getting back to this transaction itself, what will be lost with the end of Knight Ridder as we've known it?

BUZZ MERRITT: Oh, a lot of fine journalism history, for one thing. I think one thing that could be lost is the very good Knight Ridder Washington bureau. I hope it won't be. The people will still be there. I assume that McClatchy has every intention of operating a strong, broad bureau, as it has been operating, but I think it'd be a tragedy if there were a lesser commitment on the part of McClatchy to that Washington bureau.

BOB GARFIELD: One of the possibilities to emerge from the resale of these properties by McClatchy is the Newspaper Guild being a bidder for the Inquirer and other papers.

BUZZ MERRITT: Mm-hmm [AFFIRMATIVE].

BOB GARFIELD: What do you make of that idea?

BUZZ MERRITT: Well, it's an interesting idea and apparently they have some people they think can put up the money. I'm not sure that has worked in other places where the employees took over the newspaper, whether they were unionized or not. It did not work well in St. Louis a number of years ago. I know the people at those 12 papers aren't, but I'm excited about the possibility for those 12 newspapers that McClatchy is divesting, because they may be bought by non-public companies, which would shield them from what is the primary problem right now for newspaper companies, which is the profit pressure of Wall Street. I see that there's a group of people in Philadelphia who say they want to do a Green Bay Packers kind of thing with a broad community involvement. And the way they're expressing it is this is a long-term investment and it's also a civic venture, which ought to be encouraging words for the people at the Inquirer and the Daily News.

BOB GARFIELD: Back in the late '60s and early '70s, Ben Bagdikian was quite a prophet of doom about the future of newspapers because of what he deemed to be the trend, which has since been borne out, of the concentration of ownership to – [OVERTALK]

BUZZ MERRITT: Mm-hmm.

BOB GARFIELD: - companies like Gannett and Knight Ridder, for that matter. Will Knight Ridder on its tombstone have the words "Bagdikian was Right?"

BUZZ MERRITT: As far as Knight Ridder was concerned, that die was cast in 1969 and 1974 when they went public with just one tier of stock. If you want to have somebody quoted on the tombstone, you would have to say Jack Knight was right, who said in 1969 that when you go public, you lose control of your destiny.

BOB GARFIELD: All right, Buzz. Well, thank you very much.

BUZZ MERRITT: Thanks.

BOB GARFIELD: Buzz Merritt is visiting professor of journalism at the University of North Carolina and author of Knightfall.