TNG-CWA Enlists Financial Support for 'Worker-Friendly' Buyout of Nine Knight Ridder Newspapers

Washington, D.C. – The Newspaper Guild-Communications Workers of America today announced a partnership with the nation's largest "worker-friendly" private equity firm, The Yucaipa Companies, in support of its effort to engineer the acquisition of nine (9) unionized newspapers that are part of the Knight Ridder newspaper chain.

The newspapers are the Akron Beacon Journal, the Duluth News Tribune, the Grand Forks Herald, the Lexington Herald-Leader, The Monterey County Herald, The Philadelphia Inquirer and the Philadelphia Daily News, the Saint Paul Pioneer Press and the San Jose Mercury News. The papers have a combined employment of 7,000 and a combined daily circulation of 1.3 million.

The Guild's partnership with Yucaipa strengthens the ability of the union-led bid to form alliances with various other financial and strategic bidders for the Knight Ridder properties. To date, Knight Ridder has said it is only entertaining bids for all of its newspaper properties and related assets. The Guild's partnership with Yucaipa does not secure direct access to the ongoing bidding process, but it should strengthen the appeal of the Guild's bid.

"Today's announcement of our partnership with Yucaipa is a breakthrough," said TNG-CWA President Linda Foley. "It is an important step along the way in what could be a lengthy process. There is no guarantee that our interest in preserving the union properties will be taken up by the prevailing acquisition group. But at the very least, with Yucaipa's critical support, we should be seen as an attractive partner. There are sound economic reasons why the announced first-tier bidders will likely want to talk with us. And we welcome the conversation."

Commenting upon the partnership with The Newspaper Guild-CWA, Yucaipa Managing Partner Ron Burkle said, "We commend the Guild for its initiative in exploring the possible 'worker-friendly' buyout of the union newspapers of the Knight Ridder chain. Yucaipa is ready to apply its resources and expertise to form a mutually beneficial alliance with one or more announced bidders for the Knight Ridder chain. We believe in the future potential of these papers."

On December 22, 2005, The Newspaper Guild-CWA announced its intention to enter the bidding process on behalf of its members at the nine Knight Ridder newspapers identified for acquisition. Two advisory firms named in that announcement, Duff & Phelps Securities, LLC of Chicago, and Ownership Associates Inc. of Cambridge, MA, recruited involvement by Yucaipa. Those advisors will continue to work with the Guild and Yucaipa to attempt to finalize a "worker-friendly" transaction for the union papers. One potential element of this transaction will be an option for Guild members and all other union and non-union employees of these papers to invest side by side with Yucaipa, thereby creating a partially employee owned entity. The Newspaper Guild-CWA itself will not be an investor in a future entity.

Bill Boarman, chair of the CWA/ITU Negotiated Pension Plan, also expressed support for The Newspaper Guild-CWA/Yucaipa effort. "The sector of 'worker-friendly' private equity firms is coming into its own within national capital markets. Yucaipa would be an excellent partner for this effort, and I applaud their interest in our industry – the newspaper industry – which is critical for the future of our democracy." Boarman is president of CWA's printing sector.

A web site with information on The Newspaper Guild-CWA/Yucaipa effort has been launched at www.valueplusmedia.com. ValuePlus Media Corporation is the preliminary name for the acquisition corporation that would purchase the union papers. Regular updates will be posted at www.valueplusmedia.com.

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The Newspaper Guild-CWA represents 35,000 workers in the United States, Canada and Puerto Rico. CWA overall represents 700,000 workers in telecommunications, IT, journalism, broadcasting, public service, manufacturing, airlines and other sectors. Contacts: Candice Johnson, CWA Communications, 202-434-1168, cjohnson@cwa-union.org, 202-415-6566 (cell).

Chris Mackin, Ownership Associates Inc., at 617-388-0650, and Richard May, Duff & Phelps Securities, LLC, at 312-543-1985.

The Yucaipa Companies is a premier private equity investment firm that has established a record of fostering economic value through the growth and responsible development of companies. Since its founding in 1986, the firm has completed mergers and acquisitions valued at more than $30 billion. As an investor, Yucaipa works with management to strategically reposition businesses and implement operational improvements, resulting in value creation for investors. Contact: Frank Quintero, 310-228-2895.