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Knight Ridder moving headquarters

Knight Ridder Inc., the nation's second-largest newspaper publisher, said Tuesday it will move its headquarters from Miami, where it publishes the Miami Herald, to Silicon Valley in a bid to remake its image from a traditional newspaper company into a high-technology information provider.

Though only 148 employees will be affected, the move is seen as a blow to Miami-Dade County and South Florida. Knight Ridder is considered one of the region's most influential and philanthropic corporations. And it is one of only two Fortune 500 corporations in South Florida (the other is Ryder System).

"Obviously, it's not the kind of news that I wanted to hear today when Tony Ridder called," said Miami Mayor Joe Carollo, whose city is struggling through financial problems.

Knight Ridder estimated that about 65 top executives, including chairman and chief executive P. Anthony Ridder, would relocate to California where the company owns the San Jose Mercury News and Knight Ridder New Media, which leads the company's online efforts.

"There is no doubt that new technology and the emerging power of the Internet will greatly affect how people will get their news and information," Ridder said in a news release Tuesday. "As a news and information company, we want to stay very close to developments related to this new medium."

The move should be completed by early 1999. The company has not decided where to locate its new corporate headquarters, but it is expected to be between San Francisco and San Jose, company spokesman Polk Laffoon said.

About 80 employees who will not be transferred to California were expected to be moved to other company jobs, though analysts predicted that layoffs are possible.

Ridder announced the move at 4 p.m. Tuesday after the stock market closed and as stockholders headed home from the company's annual meeting. Neither he nor anyone else mentioned the move during the company's 90-minute annual shareholders meeting Tuesday morning.

At the meeting, shareholders soundly defeated a union proposal to link Knight Ridder's executive pay in part to the quality of its news coverage. The publisher is struggling with labor unrest.

While union members demonstrated outside the company's annual meeting, 98 percent of shareholders rejected the Newspaper Guild's proposal. The plan also sought to ensure that the company's 31 daily newspapers would deal fairly with advertisers, vendors, employees and communities.

The company's board of directors would have been required to consider compliance with the so-called Monterey Principles in its annual review of executive compensation.

Knight Ridder said the union guidelines were unnecessary because the company already maintains "the highest ethical principles." The proposal attempted to dictate content decisions reserved for publishers and editors, the company said.

The proposal was in response to Knight Ridder's requirement that the staff of the Monterey County (Calif.) Herald reapply for jobs after the company took over in August 1997. That labor dispute added to rancor caused by a strike of 2,500 workers against the company's Detroit Free Press.

Both cases generated union complaints of unfair labor practices with the National Labor Relations Board. The board found no violations in Monterey but hasn't released its findings about Detroit.

Labor disputes remain in Detroit, where the strike ended in February 1997 when unions made an unconditional offer to return to work. Knight Ridder kept replacement workers and said former strikers could return as jobs became available. About half have returned.

Ridder said after the meeting that the company is focusing on cutting its debt and would look for acquisitions only if "something really compelling" comes along. The company last year bought four Walt Disney Co. papers for $1.65-billion.

Knight Ridder's profits rose 54 percent to $413-million last year from $268-million in 1996, which had been its highest point since 1989. For 1997, the company had revenues of $3.14-billion. The company's stock has consistently performed below the Standard & Poor's 500-stock index and S&P's index of newspaper publishing stocks.

Shares of Knight Ridder rose 62{ cents Tuesday to close at $56.87{.

_ Information from the Associated Press, Bloomberg News, the San Jose Mercury News and the Miami Herald was used in this report.