President Clinton Emerges in Group Bidding for Philadelphia Inquirer

A private investment group whose board of directors includes President Clinton made a bid yesterday to take over a dozen daily newspapers owned by Knight Ridder, including the Philadelphia Inquirer.Mr. Clinton serves as a senior adviser to the Yucaipa Companies, a Los Angeles-based investment firm that has joined with a journalists’ union, the Newspaper Guild, to seek control of the 12 newspapers and gradually transfer ownership to the news outlets’ employees.“The Yucaipa Companies are putting in a bid today for the 12,” a spokeswoman for the union, Candice Johnson, said in an interview. She declined to say how much the union-backed group is offering. “We think the bid will be a very strong bid,” she said.The papers on the auction block include both of Philadelphia’s leading newspapers, the Inquirer and the Daily News, as well as the St. Paul Pioneer Press and the San Jose Mercury News. Industry analysts have estimated that the dozen newspapers will fetch between $1.4 billion and $2 billion.Earlier this month, the McClatchy Company agreed to buy the Knight Ridder chain for $6.5 billion. Mc-Clatchy, which is based in Sacramento, surprised many observers by immediately announcing plans to shed a dozen of Knight Ridder’s 29 newspapers. McClatchy’s CEO, Gary Pruitt, said most of the papers being sold are in slow growing markets.The Yucaipa-led bidding group has been locked in a dispute with the firms selling the newspapers over access to confidential financial information about the papers’ performance. In a statement last week, the president of the Newspaper Guild, Linda Foley, complained about unfair treatment and threatened to involve unnamed powerful allies if McClatchy refused to turn over financial data given to other bidders.“I am prepared to recruit the strength of friends of the labor movement in the investment community as well as opinion leaders in the various communities where my members practice their profession to assist us in the process of insuring that our bid is treated fairly,” Ms. Foley said.McClatchy has denied any favoritism.A spokesman for Mr. Clinton, who delivered a speech in London yesterday at a conference on globalization, said the former president has not played a role in the proposed newspaper acquisition.“President Clinton has been traveling overseas on a tsunami and AIDS trip and is not involved in this,” the spokesman, Jay Carson, said. He declined to elaborate on Mr. Clinton’s work with the investment firm behind the deal.During his presidency, Mr. Clinton rarely visited Los Angeles without stopping at the home of the supermarket magnate who founded Yucaipa, Ronald Burkle. In his memoir, the former president described Mr. Burkle as “one of my best friends.”In 2002, Mr. Burkle’s investor group announced that Mr. Clinton had signed on as a senior adviser to Yucaipa American Funds and Yucaipa Corporate Initiatives Fund. Mr. Burkle, who is known for orchestrating leveraged buyouts at companies that have suffered from union strife, said in a statement that the funds were pursuing socially conscious investments in low-income neighborhoods.Senator Clinton’s financial disclosure forms indicate that Mr. Clinton was a partner in Yucaipa Global Opportunities Fund I and received “guaranteed payments” of more than $1,000 in 2003 and 2004. The forms do not require disclosure of the exact amounts.There is no indication that Mr. Clinton holds an equity interest in any of the Yucaipa funds, but Mr. Burkle told reporters in 2002 that the former president would be paid based on the performance of the investments, which draw much of their money from public employee pension funds.A spokesman for Yucaipa did not re turn calls seeking comment for this story.The editor of the American Journalism Review, Rem Rieder, said he would not be disturbed by Mr. Clinton playing a role in a newspaper chain, up to a point.“The key question is how the newspaper is run,” Mr. Rieder said. “I wouldn’t be very comfortable with Bill Clinton making coverage decisions, but as long as the ownership had a tradition of not interfering with the way news is covered, it wouldn’t bother me.”The author of a new book on the newspapers run by America’s Founding Fathers, “Infamous Scribblers,” said he was not aware of any leading American politicians who then went into publishing. “I just don’t remember anything like this having happened,” the author, Eric Burns, said.However, he noted that two Cabinet secretaries to President Washington, Alexander Hamilton and Thomas Jefferson, used government money to start newspapers.“Frankly, there is a long tradition of people who own newspapers and newspaper chains using the muscle of those chains to be active politically,” Mr. Burns, who hosts a press criticism program for Fox News, said.Mr. Clinton’s vice president, Albert Gore, has made a foray into television, launching a cable channel for young people, Current TV. Much of its programming grapples with contentious issues, but it is not news in a strict sense.Mr. Burkle has been a generous donor to Democratic candidates, though in California he has also supported Republicans, such as Governor Schwarzenegger and a former governor, Pete Wilson. Mr. Burkle is also close to the Reverend Jesse Jackson Jr., who reportedly serves on Yucaipa’s board.A Philadelphia businessman, Bruce Toll, confirmed yesterday that he submitted a bid for the two newspapers located in that city. Two existing newspaper chains were also expected to file bids, the Gannett Company, based in McLean, Va., and the MediaNews Group of Denver.

President Clinton Emerges in Group Bidding for Philadelphia Inquirer

President Clinton Emerges in Group Bidding for Philadelphia Inquirer

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