McClatchy willing to sell Seattle Times stake

(Editor's Note: Seattle Times Co. spokeswoman Corey Digiacinto was misidentified in an earlier version of this article.)

Struggling with falling profits and revenue, The McClatchy Co. said Tuesday that it's willing to sell its 49.5 percent share of The Seattle Times Co.

Answering a shareholder's question during the Sacramento, Calif.-based company's annual meeting, McClatchy Chairman and Chief Executive Gary Pruitt responded, "Long term, we would be open to selling" that investment, confirmed McClatchy treasurer Elaine Lintecum, who was at the meeting.

McClatchy owns 49.5 percent of the voting shares in the Times Co. and 70.6 percent of its nonvoting common stock.

The family-controlled Blethen Corp. of Seattle owns the remaining 50.5 percent of the Times Co., which participates in a joint operating agreement with The Hearst Corp., owner of the Seattle P-I.

Lintecum said McClatchy's willingness to sell its stake in The Times Co. was nothing new.

"We have been willing to sell it ever since we acquired it," she said. "We're not unhappy with the investment, but we always look at all our investments, and particularly things that aren't core investments to us, on an ongoing basis."

McClatchy's valuation of its interest in the Times Co. has declined steadily since March 2006, when it acquired the interest through its $4.1 billion purchase of Knight Ridder Inc.

It put the investment's carrying value at $102.2 million in December 2006, at $89.9 million in June 2007 and at $19.3 million as of Dec. 30. In a federal filing Friday, it said the investment's carrying value was $12.1 million as of March 30.

A company's carrying value is not the same as its market value. Carrying value usually refers to the estimated worth of an asset that is hard to assess precisely. Market value is the price at which an asset would sell.

Lintecum said such declines aren't limited to the Times Co.

"We ourselves have declined in value, and so have many other companies," she said.

McClatchy owns 30 daily newspapers in 29 U.S. markets. Among its papers are The Sacramento Bee, The Miami Herald, and four Washington papers: The News Tribune of Tacoma, The Olympian, The Bellingham Herald and the Tri-City Herald.

Lintecum declined to say whether McClatchy has been in touch with the Blethen Corp. or any other potential buyer over selling its investment.

Times Co. spokeswoman Corey Digiacinto declined to comment on whether the Blethen Corp. has any interest in buying back the shares.

Seattle P-I Editor and Publisher Roger Oglesby also declined to comment on whether Hearst might buy them. A Hearst spokesman couldn't be reached for comment late Tuesday afternoon.

As for McClatchy overall, Pruitt said he can't tell when the company's revenue decline will end.

For the quarter ended March 31, McClatchy reported a net loss of $849,000, or 1 cent per share, compared with net income of $9 million, or 11 cents per share, in the year-ago period. First-quarter revenue was $488.3 million, compared with $566.6 million in first-quarter 2007.