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Mcclatchy Announces Sale Of The Newspaper Network To AP, Vertis

Press release from the issuing company

SACRAMENTO, CA, April 10, 2003 - The McClatchy Company has entered into separate agreements to sell the assets of The Newspaper Network, Inc., a wholly owned subsidiary, to The Associated Press (AP) and Vertis, Inc., the three companies announced today. Terms of the agreements were not disclosed. The transactions are expected to be completed in June 2003. The Newspaper Network, Inc. (TNN), is a national sales and marketing company that provides services to both advertisers and newspapers. It offers advertisers a wide variety of print advertising services specializing in the planning, pricing and placement of newspaper advertising throughout the country. TNN serves newspapers by making it more compelling for advertisers to capitalize on the strengths of newspaper advertising and has become an important competitive force with direct mail on a national basis on behalf of newspapers. AP, headquartered in New York, NY, will purchase TNN's ad-processing operations responsible for all placement and billing processes. The acquisition will complement AP's existing ad-processing business, AP AdVantage. Both processing operations are located in Sacramento. Separately, Vertis, headquartered in Baltimore, MD, will purchase the sales, marketing and media planning assets of TNN and operate them as The Newspaper Network, a Vertis company. That company will continue to do business from current TNN offices in Sacramento, Atlanta, New York and Greenville, SC. The integration of TNN’s media functions with Vertis’ Media & Marketing Services is expected to result in media billings exceeding $1 billion annually, establishing Vertis as the second largest newspaper media-buying agency in the U.S. AP and Vertis have entered into an agreement for AdVantage to provide and manage Vertis' TNN placement and billing services. Bob Weil, vice president of operations at McClatchy, said, "We feel very good about placing the future of TNN in the hands of Vertis and Associated Press, two companies that are respected in the newspaper and advertising industries and promote values and goals similar to TNN." Tom Brettingen, AP vice president of business development, said, "The acquisition demonstrates AP's commitment to growing our ad management services business. The TNN operation is a major addition to our present AP AdVantage ad-processing business and our AP AdSEND ad delivery business." AP has operated AdSEND since 1994 and transmits about 1 million advertisements a year to newspapers in the United States. AP entered the ad-processing business in late 2001 with the acquisition of the Newspaper Industry Communications Center (NICC) from the Newspaper Association of America. Ad processing comprises delivery of insertion orders from advertisers or ad agencies, approval or modification of the orders by newspapers, collection of tearsheets, collection of newspaper invoices, resolution of invoice discrepancies, consolidation of bills to advertisers, and cash processing. Herb Moloney, Vertis chief operating officer, North America, said, “This acquisition provides us with additional media expertise that reinforces Vertis’ leadership position as an innovative, integrated marketing solutions creator. Our Media & Marketing Services unit will be even better equipped to serve large, national clients in key industry markets, including retail, automotive, grocery and financial. The acquisition will result in Vertis increasing its ability to provide effective media planning and placement services.”