A little after 11 this morning Par Ridder took the stand in his own defense. It would be an understatement to say he and his legal team have a ways to go to get back in the game. The battle is over him essentially waiving his own non-compete to leave St. Paul for Minneapolis and what on some level at least is a staggering amount of potentially critical, highly confidential financial he had a hand in transferring from the Pioneer Press to the Star Tribune. But their strategy became clear almost immediately.
In short, it comes down to this: It was all an innocent mistake. By “all” we mean that transfer and “migration” of confidential Pioneer Press financial data to Star Tribune computers anyway. (I had to leave before Ridder got into his explanation for the non-compete business.)
Ridder explained that what he did when arriving at the Star Tribune was exactly what he had done when arriving at the Pioneer Press from San Luis Obispo in 2004. He simply wanted his new paper’s financial data copied on to his “18 to 20” custom-built spreadsheets. Under his attorney’s gentle questioning Ridder explained that his laptop contained 10 years worth of sales and other financial data from every place he has worked.
The critical difference of course being that until he jumped to the Star Tribune he had only worked for one of his family’s newspapers and had never before slipped across town over a weekend to work for a direct competitor.
The prosecution team [excuse me, “attorneys for the plaintiff”], established yesterday that the names and contract specifics of 3890 Pioneer Press advertisers were on the files Ridder — or someone — downloaded from Pioneer Press hardware on or about March 6, 2007. In the early moments of Ridder’s testimony today he named only Star Tribune CFO, Mike Riggs and Sr. VP for Sales Mike LaBonia as people who had been given access to confidential Pioneer Press files, each with specific instructions from him, in e-mails, to “be careful” with the files.
Riggs was required to replicate the spread sheets Ridder preferred to use and LaBonia, apparently, to get an idea of how Ridder liked to break out advertisers by categories.
(For all you jargon lovers, Ridder described his “Three Bucket” delineation process. “Select” accounts for heavy-hitting customers like Macy’s and car dealers. “Key” accounts for middling clients, and “territory” accounts for small businesses in specific metro areas.)
During a mid-morning break I stopped MediaNews CEO Dean Singleton working his way back from the men’s room. I reminded him I was the guy who asked him yesterday if Avista had yet offered to settle this thing before a full and final public humiliation. “Yes, and I think I said I didn’t want to say anything about that.”
“Yeah, but my question really is whether a judgment against Par Ridder himself is enough. Would that alone satisfy you?”
“What do you mean?”
“I mean, in a barroom conversation yesterday I said a major businessman like you long ago learned to dial out emotion and to never let things like this get personal.”
“This isn’t personal. This is simply about what’s right and what’s wrong, and what was done here was wrong.”
“Right. But my question is is it enough to simply establish that, or, again, as a hard-nosed businessman isn’t the real vindication in the financial sting of a judgment in your favor?”
Singleton looked down, looked up, looked at the bank of elevators, and then said, “Look, I’ve been in newspapers since I was 15. Its really the only business I know. And all I’m really say here is that this wasn’t ethical, or right.”
“OK. Well, let me ask you this, are you surprised that Avista hasn’t separated itself from Ridder by now?”
“These are Wall Street people, investors. They are not newspaper people. I don’t think they understand the conflict of interest in this case.” He added, “In the case of Par I think some of the explanation [for his actions] lies in the fact that he had everything given to him. He felt he was entitled to act as he has.”
About this time Chris Harte, the lone newspaper person among the Avista hierarchy walked up. The two men clearly have known each other for some time and betray no animosity.
A small crowd began to gather and another reporter asked Singleton and Harte if they see “a floor” to the miserable state of the newspaper
industry.
“I hope so,” said Singleton with a rueful chuckle. He then launched into a familiar enough description of “the perfect storm” afflicting the industry today — cratering real estate listings, “migrating” employment listings and an automobile industry in worse shape than newspapers. To all this Harte nodded in agreement.
“Fine,” I said, “but isn’t another significant factor unrealistic profit expectations by companies like yours?” meaning both MediaNews and Avista.
“Well,” said Singleton, who has heard that one before, “a lot of people in this industry are fighting to make any profit at all.” He then mentioned the situation in Boston, and Harte reminded him of Seattle’s meltdown. Both the Pioneer Press and the Star Tribune, though, are currently profitable. Maybe not next year. But right now they’re making money.
As the recess ended I asked Harte, “Has Avista considered separating itself from Ridder?”
“Absolutely not,” Harte replied, shooting Singleton a quick glance, “not when we were threatened with a criminal suit.”
“But if you lose and it means making a large payment to Mr. Singleton would you then consider legal action against Mr. Ridder?”
Harte looked displeased with the question. His expression was of someone with a smelly sock stuffed under his nose. “No. Because I think what’s clear here, what the public will see, is that this,” meaning Singleton’s suit, “is an attempt to vilify someone for competitive advantage.”
Finally, the last prosecution witness before Ridder took the stand today was Karen Clary former VP of HR for the Pioneer Press. She reiterated that Ridder had originally asked to sign a non-compete like other members of the PiPress’ “Operating Committee”, or “Op-Com” as Clary called it in military command-speak.
She then said that Ridder personally instructed her to remove the non-competes from company files “sometime around December of 2005”. She said he told her, “he had decided to rescind the agreement”, because PiPress executives with long-term attachments to St. Paul would be left in a difficult situation after the sale of Knight-Ridder went down.
“Par asked if I was comfortable doing this,” she said, referring to pulling the files. “I said I was, but than I thought about it a bit and I went back to him and said I was not comfortable doing it without corporate approval.”
At this point she says Ridder told her he would talk to corporate, specifically Knight Ridder Sr. VP, Art Brisbane. Clary testified that Ridder got back to her, “a few days later and said he had talked to Brisbane and gotten the OK.” Brisbane’s videotaped deposition yesterday had him failing to “really recall” the conversation much less giving the “OK”. Either way, no written waiver exists.
Clary was asked about any concerns she had over the whole waiving of the non-competes business, and she replied that she did think it a bit odd, “that Mr. Ridder would be releasing himself” from a non-compete.
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