Al's Further Adventures

By Richard N. Ostling

Combative, outspoken Al Neuharth was, on the whole, good to the Gannett Co. He built the firm into the biggest U.S. newspaper chain, gave it a vivacious national flagship, USA Today, and swept up many other media properties. Then again, Gannett was good to Neuharth. It paid him handsomely, and when he retired in 1989, at 65, gave him stock worth $5.1 million and $300,000 a year, guaranteed for life. Any gratitude was short-lived. In the two years since, the man who wrote Confessions of an S.O.B. has turned to global press philanthropy -- in no small measure at Gannett expense.

The vehicle for Neuharth's reinvigorated ambitions is the Freedom Forum of Arlington, Va., formerly the Gannett Foundation, whose assets consisted entirely of stock donated by the communication firm's founder. Upon retirement, Neuharth retained the foundation's chairmanship. Last year he infuriated his former employers by deciding to sell all that stock -- 10% of Gannett's shares -- to the highest bidder. Reason: dividends on the Gannett stock were less than the amount the institution is required to give away.

Neuharth's announcement amounted to putting the company in play for corporate raiders. Last April, Gannett fended off the threat by buying the foundation's holdings for $670 million, $130 million more than the company had previously offered. As part of the sale, Neuharth agreed to rename the foundation.

Neuharth struck again last month when the Oakland Tribune (circ. 137,000), America's only black-owned metropolitan daily, announced it was about to go bankrupt. In a highly publicized rescue, the Freedom Forum committed $7.5 ! million in loans and guarantees to the Tribune while Gannett swallowed $29 million of the newspaper's debt. Freedom Forum acquired rights to one-fifth of the Tribune.

Gannett officials refuse all comment on Neuharth, but the voices of employees and company trustees -- current and former -- frost over when his name is mentioned. "There's bad feeling and bad blood," says the editor of one major Gannett paper. Adds an executive with the Washington Journalism Review: "They loathe him and don't want to say so."

Meantime, Neuharth has created a truly baronial fiefdom at a swank building across the street from the headquarters of Gannett and USA Today. Renovations for the building (carved stone staircases, suede-covered file cabinets) cost $15 million. A $5 million high-tech conference center on the roof is under construction.

With $32 million a year in revenues to spend, Neuharth is further shocking some Gannett old-timers by shifting the foundation's focus from charities in cities where Gannett newspapers are published. An important new interest is postcommunist Europe. The Forum has granted $110,000 to provide the Associated Press wire to 10 independent newspapers in Eastern Europe. An additional $150,000 will fund polls of East European and Soviet attitudes on democracy. Just back last week from a whirlwind visit to the Soviet Union, Neuharth says, "I think we're in a position to make an important impact on the world."

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CAPTION: FREEDOM FORUM

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CAPTION: GANNETT CO.

With reporting by Ann Blackman/Washington