SAN FRANCISCO (MarketWatch) -- Private Capital Management, which earlier this month called for a sale of newspaper publisher Knight Ridder, said Thursday it may nominate a slate of directors to Knight Ridder's board because the company hasn't acted quickly enough to address its concerns.

The investment firm had asked the board to solicit competitive offers for the company and then let shareholders decide whether the subsequent bids reflected the fair value of the company's assets. Harris Associates L.P., Knight Ridder's third-largest shareholder, called for a sale of the company two days later.

Since then, however, according to PCM, Knight Ridder has had a "limited response" to its concerns and those of other shareholders. As a result, the firm said it might nominate directors to the Knight Ridder board at the 2006 annual meeting.

PCM also said in the filing it intends to "unilaterally engage in other activities focused on realizing fair value for the company's shareholders," including discussions with Knight Ridder, other stockholders and certain third parties.

A Knight Ridder spokeswoman declined to comment.

Knight Ridder shares are down about 5% this year but had fallen 20% before PCM outlined its demands on Nov. 1.

San Jose, Calif.-based Knight Ridder, second-largest U.S. newspaper publisher, faces the same problems that confront the entire industry. Newspapers are coping with an uneven advertising environment, with marked weakness in classified automotive ads and many national categories, including technology, movies, wireless and transportation.

Most of the good news in newspaper publishing has come from online ad revenue, which has soared amid greater use of Web-based help-wanted and real-estate ads.

Circulation is also declining, as more readers, particularly younger people, get their news online. Further, the National Do Not Call Registry, implemented two years ago, has made it more difficult for newspapers to solicit new subscribers.

Part of Knight Ridder's response to these issues, like that of many of its peers, has been an effort to exert greater cost control. In September, the company said 100 newsroom employees would be laid off from its Philadelphia newspapers, the Inquirer and Daily News.

Knight Ridder shares rose $1.29, or 2%, to close at $63.32.

David B. Wilkerson is a reporter for MarketWatch in San Francisco.

Commentary:
The right wing continues its bid to buy up or destroy every news outlet in the country.