Today: Star Owner Goes from Golden Boy to ‘Baghdad Bob’ & Captain of Titanic

Let’s take another look at Kansas City Star parent McClatchy head guy Gary Pruitt...

As my former colleagues at 18th and Grand hunker down and await another likely pre holiday bloodletting, yesterday’s column wondered aloud how Pruitt, having blundered so badly, has managed keep his job. He’s been doling out plank walks by the hundreds to journalists whose only crimes were working at a company he foolishly leveraged at the exact wrong time.

To be clear, layoffs would have come to the Star even if Knight-Ridder still owned the biz. But by Pruitt’s taking on such huge debt, the casualties have been far greater than they likely otherwise would have been. And piloting McClatchy’s stock from $63 to an all but worthless buck is no small feat.

Yet Pruitt still has his job. In what universe does that logic exist?

"Pruitt was always a golden boy in the eyes of the Wall Street analysts — even now they treat him with obvious respect even though it’s all gone to the crapper," says one prominant news exec. "I think the McClatchy family must love him like a son."

Just how golden was Pruitt in his pre Star hey days? Very.

Take the blowjob administered by American Journalism Review writer Susan Paterno in 2003:

"Pruitt presented himself at the Ritz as he often does, a modern Candide, always positive, always on message, always looking as though he stepped from the pages of a Ralph Lauren catalog, running a company as trim and fit and athletic as he is. He has a smile that probably broke a hundred hearts in high school and an endearing goofy charm, stumbling over Hegel and rattling off Rolling Stone lyrics in the same conversation, likening his Wall Street strategy to a Lenny Kravitz tune for analysts, talking as guilelessly about journalism as he does about redecorating his office from the dark wood paneling of the previous regime to a streamlined modern gray and blue, with matching Expressionist paintings and a light fixture that his mentor and predecessor Erwin Potts told him looks vaguely pornographic."

There’s more…

"At 46, Pruitt represents the future of journalism, a new game whose rules have changed considerably from the ’70s and ’80s…" Paterno panted. "Today, McClatchy papers are thoroughly modern and professionally designed newsgathering machines…"

Paterno’s yarn did contain insight into what would become Pruitt’s Achille’s Heel; his appetitite for acquiring other newspapers.

"Pruitt’s strategy is straightforward: Pay what it takes to acquire newspapers in growing regions, eschew all ‘national pretensions,’ as he has said, make the papers the best for their size, maintain the leading local Web site and boost advertising market share, all the while defusing unions, raising readership and tightly controlling expenses," Paterno wrote. " ‘A company our size either has to grow or die,’ says (former Star editor) David Zeeck, executive editor of the News Tribune in Tacoma, a midsize McClatchy daily. ‘It’s gonna eat or get eaten by somebody. Gary talks about that all the time. You’re either gonna be eaten or [be] an eater. We want to be an eater.’ "

Unfortunately for the Star and McClatchy stockholders, Pruitt ate too much at the exact wrong time.

Two years after buying Knight-Ridder and the Star, Pruitt made 24/7 Wall St.‘s list of "10 CEOs That Need to Leave."

"The company’s corporate governance section does show ‘an annual CEO review’ and we would suggest the company get on this…" 24/7 wrote, adding, "The problems will likely continue under a new head, but this company looks ripe for new blood to lead the day to day operations."

That same year, NewsBusters nicknamed Pruitt "Bagdad Bob."

"He was the Iraqi press spokesmen who caused much amusement in the West because of his unrealistically upbeat pronouncements when Iraq was invaded by the United States and its allies in 2003," NewsBusters wrote. "Among Baghdad Bob’s funnier announcements was his declaration that no Americans were in Baghdad at the same moment when American troops were patrolling the streets of that city just a few hundred yards from where he was holding that press conference.

"Well, the newspaper industry has its own Baghdad Bob in the form of McClatchy CEO, Gary Pruitt, who in early 2007 gave his own unrealistically upbeat reports to his company’s employees on the purchase of Knight-Ridder in 2006. That purchase quickly turned into an utter disaster as evidenced that the former Knight-Ridder flagship newspaper, the Miami Herald, is now being put up for sale by McClatchy."

CNBC’s Jim Cramer has called Pruitt "a walking disaster…a one-man black hole for shareholder value,"  further adding that, “If Gary Pruitt had been the captain of the Titanic, that would not have been an accident, hitting that iceberg.”

Yet five years into a steep slide that has cost thousands their jobs, Pruitt remains large and in charge.

At this point the only way McClatchy and the Star are likely to free themselves of Pruitt’s death grip is if the company is forced into bankruptcy, insiders suggest.

"And a whole new management regime comes in, like what has been happening with Journal Register company, which is in the hands of a hedge fund or some kind of private equity company…," the news exec adds. "That is what the end game is looking llike for these companies…(but)  bottom line, it is hard to see a sunny outcome."

Aside from whatever’s left of the Pruitt mythology – the cool, modern guy, who likes rock n roll and goes surfing – this much is clear: "He’s not Steve Jobs or Superman."

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13 Responses to Today: Star Owner Goes from Golden Boy to ‘Baghdad Bob’ & Captain of Titanic

  1. kcfred says:

    jeebus, man….
    Sour grapes for lunch?
    Second story on the evil empire in two days…pining for your days there?
    We get it, you are still consumed with the Star.
    With this stuff and the masturbatory material Craig writes, you guys are blazing your own trail, that’s for sure…where I am not sure, though, is where the trail is going.

  2. Robertoe says:

    But at least he’s still knocking down $$$$ millions!
    No. There’s a relevant bigger story here. Lets do it with a quote and a link:

    Sacramento Business Journal
    Date: Friday, April 1, 2011,
    “Chairman and chief executive officer Pruitt had his compensation fall to $3.71 million last year, down from $3.75 million in 2009, according to a filing with the Securities and Exchange Commission. The compensation includes salary, bonus and non-cash compensation.
    On Jan. 24, McClatchy

  3. Hearne Christopher says:

    Do I detect a little thin skin?

  4. Hearne Christopher says:

    Nice add.

  5. kcfred says:

    Thin skin?
    …have no idea what you mean.

  6. Hearne Christopher says:

    Look, dude – this isn’t about me. This is about a guy who’s got one of the worst imaginable track records in business. A guy who’s about to announce quarterly results that will probably cost dozens to 100s of more people their jobs.

    If you didn’t think the story was interesting or worthwhile, why did you bother reading it?

  7. Orphan of the Road says:

    Interesting
    Shit, I’ve still got a hard-on for the dick who found out he would get $6–million for selling the company to his pal over at BP. But to get the deal done they had to divest their 82.5% of their spinoff company. And then the CEO of a former spinoff of the same company had a hard on for our company and bought them out from underneath a multi-hantional to a lil’ bitty TX co. The asshole of that company was a TX A&M grad.

    The week of the take over stock was at $40 a share. Three days later it went to $11. My 401K was tanked. Downsized and out of work.

    Uh, what was the thread about again?

    So Hearne has a boner for his ex-employer’s executioner. So do lots of Americans. Sometimes he is petty about it but he makes points as well. Is it the blind squirrel and the nut or journalism? Hell if I know but I read the shit.

    The break up of Knight-Ridder was brought on by folks who, once again, thought they were the smartest guys in the room. Smarter than the folks who built the businesses.

    BTW my company was eventually bought out by a Russian with ties to the mob who took it private. Got a helluva payout when that happened and missed reinvesting in the market when it crashed.

    Karma is a sweet bitch sometimes.

  8. kcfred says:

    I did read it
    …still not on board with the thin skin remark but oh well…this story isn’t much different than what has happened to a lot of people with their employers. They get tossed and the head guy who tossed them gets rich because of the tossing he does somehow makes the company “more efficient.” Happening in board rooms across this great capalitalistic society of ours. I think that’s what the occupy america thing is about. People who bunkrupt their companies get rich. The people who get tossed get their own website to bitch about it. That’s cool.

  9. Hearne Christopher says:

    Well, here’s why I’m following this story in particular…

    It affects and has affected many of my friends and associates. OK, including me. Second, it’s very local and I have plenty of connections and perspective on the inside story. Third, it’s local media, which I’ve always written about and been interested in.

    As for the company getting rich, that’s obviously not the case here. Not when the stock goes from $70 to a buck. Which makes it all the more difficult to understand.

    What kind of schmooze can somebody possibly have to perform this poorly and still keep a very healthy seven figure job? Doesn’t make sense.

    Lastly, outside of those calls a couple three years ago for Pruitt’s head, I haven’t seen anybody really point out the obvious in the past year or more. And not locally. So I’m posing the question and pointing out the facts in the form of an overview to stimulate some head scratching if you will.

    That’s all.

  10. Hearne Christopher says:

    No boners (nice word choice) here, Orph

  11. bschloz says:

    Right On
    I’m glad you are reporting on this. Lot of local collateral damage to the City with all these Conglomerates.
    Sprint is really getting punched in the gut….I think Hesse is knocking down $5 million and the stock has lost 83% under his watch.
    Debt is a killer…..really hope Star is still making a profit. I hope they can entice someone to come in and continue.
    Funny thing is I love the paper…I can’t quit it …just part of waking up for me.

    This one got a lot of attention this week.
    http://tinyurl.com/3vj9axf

  12. Mike says:

    Nice article, Hearne…
    This is what mainstream business journalism fails to do on so many levels (especially in financials), is to point out the failings of CEO’s, the plummeting value of the companies they run…and the willful ignorance (or worse) of the boards that oversee the CEO, which reward failures with exorbitant raises (because they’re all in cahoots), while the regular rank-and-file suffer.

    Thanks for pointing this out and staying on top of it.

  13. Robertoe says:

    This Wall Street and CEO bullshit has got to go
    Actually that link article BSchloz posted is the one to crow about. That Joshua Brown nailed it:

    “… it is the small business owner who’s really been wronged here, not the fringe elements you mockingly dismiss. The business owner whose losses are not socialized like yours, the business owner without the government in his pocket, the business owner who is forced to play by the rules that you have paid to have written. He’s not a hippie, he’s not a Marxist…but he’s waking up, dummy.

    You blew the second chance you got with TARP to re-enter society as a productive component of commerce. You went back to bonus-swilling, full-retard mode as though nothing ever happened and 13 million people weren’t sitting around in their post credit-bubble joblessness for three years now. Your tone-deafness and utter disconnection from the rest of the country has produced something extraordinary – You’ve managed to awaken one of the most indolent, lethargic and apathetic populaces in the history of the world. You’ve now stirred a slumbering nation of 300 million from it’s Entennman’s and Zoloft-induced stupor. America is awake now and it’s pissed.

    Good luck with that.”

    They’re gonna need more than luck. Anyone with any smarts is mucho pissed off. Heads need to roll.

    Heads they won. Tails we bailed them out for trillions.

    Recent Bloomberg article headline :”Wall Street Aristocracy Got $1.2 Trillion in Secret Loans”:

    Did you see the Rolling Stone Magazine article where the Morgan Stanley’s CEO’s wife tapped into some of that with zero business experience or track record? “”… the government lent taxpayer money to the same assholes who caused the crisis, so that they could then lend that money back out on the market virtually risk-free, at an enormous profit.”

    http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

    Or here’s Forbes:”The Fed’s $16 Trillion Bailouts Under-reported” It it all went to cover their fucking gambling losses. And now they’re clueless and rolling around in their own bonus money. No it shouldn’t be their money. They should be toast! This should not stand. It won’t. Its gonna get ugly. And I hope everyone rasies the heat on these pigster assholes. Bring it on.

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