PULITZER INC, 10-K, 2000-03-24

PULITZER INC
10-K, 2000-03-24
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
-------------------------

<TABLE>
<CAPTION>
(MARK ONE)
<S> <C>
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 26, 1999 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM -------- TO --------
COMMISSION FILE NUMBER 1-9329
</TABLE>

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PULITZER INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------------

<TABLE>
<S> <C>
DELAWARE 43-1819711
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>

900 NORTH TUCKER BOULEVARD,
ST. LOUIS, MISSOURI 63101
(Address of principal executive offices)

(314) 340-8000
(Registrant's telephone number, including area code)

-------------------------

Securities registered pursuant to Section 12(b) of the Act: Common Stock,
par value $.01 per share -- New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
-------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes F No ____

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $288,988,925 as of the close of business on
March 20, 2000.

The number of shares of Common Stock, $.01 par value, outstanding as of
March 20, 2000 was 8,005,931.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement to be used in
connection with its Annual Meeting of Stockholders to be held on May 17, 2000
are incorporated by reference into Part III of this Annual Report.

The registrant's fiscal year ends on the last Sunday of December of each
calendar year. For ease of presentation, the registrant has used December 31 as
the fiscal year-end in this Annual Report. Except as otherwise stated, the
information in this Annual Report on Form 10-K is as of December 31, 1999.
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<PAGE> 2

ITEM 1. BUSINESS

INTRODUCTION

Pulitzer Inc. (the "Company") was capitalized on March 18, 1999 with
approximately $550 million in cash and all the other assets of Pulitzer
Publishing Company ("Old Pulitzer") (other than broadcasting assets) as a result
of the Spin-off (as defined below) and is operating the newspaper publishing and
related "new media" businesses formerly operated by Old Pulitzer. The Company
was organized as a corporation in 1998 and, prior to the Spin-off, was a
wholly-owned subsidiary of Old Pulitzer. Prior to the Transactions (as defined
below), Old Pulitzer was engaged in newspaper publishing and television and
radio broadcasting.

Pursuant to an Amended and Restated Agreement and Plan of Merger, dated as
of May 25, 1998 (the "Merger Agreement"), by and among Old Pulitzer, the Company
and Hearst-Argyle Television, Inc. ("Hearst-Argyle"), on March 18, 1999
Hearst-Argyle acquired, through the merger (the "Merger") of Old Pulitzer with
and into Hearst-Argyle, Old Pulitzer's television and radio broadcasting
operations (collectively, the "Broadcasting Business") in exchange for the
issuance to Old Pulitzer's stockholders of 37,096,774 shares of Hearst-Argyle's
Series A common stock. Old Pulitzer's Broadcasting Business consisted of nine
network-affiliated television stations and five radio stations owned and
operated by Pulitzer Broadcasting Company and its wholly-owned subsidiaries.
Prior to the Merger, Old Pulitzer's newspaper publishing and related new media
businesses were contributed to the Company in a tax-free "spin-off" to Old
Pulitzer stockholders (the "Spin-off"). The Merger and Spin-off are collectively
referred to as the "Transactions."

Old Pulitzer's historical basis in its newspaper publishing and related new
media assets and liabilities has been carried over to the Company. The
Transactions represent a reverse-spin transaction and, accordingly, the
Company's results of operations for periods prior to the consummation of the
Transactions are identical to the historical results previously reported by Old
Pulitzer. The results of the Broadcasting Business owned by Old Pulitzer prior
to the Merger are reported as discontinued operations in the financial
statements included in Item 8 of this Annual Report on Form 10-K.

RECENT EVENTS

On January 11, 2000, the Company acquired in an asset purchase The
Pantagraph, a daily and Sunday newspaper that serves the central Illinois cities
of Bloomington and Normal, and a group of seven community newspapers known as
the Illinois Valley Press, from The Chronicle Publishing Company of San
Francisco ("Chronicle") for an aggregate of $180 million. The purchase price
excludes acquisition costs and working capital, which will be settled with
Chronicle through a separate working capital adjustment. The Company funded this
acquisition with the proceeds from the sale of a portion of its investments in
marketable securities.

GENERAL

The Company is engaged in newspaper publishing and related "new media"
businesses. Its newspaper operations consist of two major metropolitan dailies:
the St. Louis Post-Dispatch (the "Post-Dispatch"), the only major daily
newspaper serving the St. Louis metropolitan area; and The Arizona Daily
Star(the "Star"), serving the Tucson metropolitan area. Each of these
publications also operates electronic news, information and communication web
sites on the Internet. In addition, the Company's Pulitzer Community Newspaper
group (the "PCN Group") includes 12 dailies which serve markets in the Midwest,
Southwest and West, as well as a number of weekly and bi-weekly publications.

The Company is the successor to the company founded by the first Joseph
Pulitzer in 1878 to publish the original St. Louis Post-Dispatch. The Company
and its predecessor have operated continuously since 1878 under the direction of
the Pulitzer family. Michael E. Pulitzer, a grandson of the founder, currently
serves as Chairman of the Board of the Company.

2
<PAGE> 3

ITEM 1. BUSINESS -- CONTINUED
The following table sets forth certain historical financial information
regarding the Company's operations for the periods and at the dates indicated.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996(3) 1995
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Operating revenues -- net................. $391,383 $372,924 $357,969 $309,096 $269,388
======== ======== ======== ======== ========
Operating income (loss):
Operating locations..................... $ 77,472 $ 69,456 $ 66,994 $ 46,549 $ 37,895
Stock option cash-out and bonuses(1).... (26,685)
St. Louis Agency adjustment............. (25,029) (20,729) (19,450) (13,972) (12,502)
General corporate expense............... (6,662) (5,806) (6,007) (5,532) (4,666)
-------- -------- -------- -------- --------
Total................................ $ 19,096 $ 42,921 $ 41,537 $ 27,045 $ 20,727
======== ======== ======== ======== ========
Depreciation and amortization............. $ 17,091 $ 14,054 $ 13,007 $ 8,660 $ 4,307
======== ======== ======== ======== ========
Operating margins(2)...................... 19.8% 18.6% 18.7% 15.1% 14.1%
Assets.................................... $978,287 $546,393 $464,311 $398,416 $333,641
======== ======== ======== ======== ========
</TABLE>

- ---------------
(1) In 1999, the Company recorded expense of $26.7 million representing the cost
of stock option cash-outs and bonuses paid to publishing employees in
connection with the Transactions.

(2) Operating margins represent operating income compared to operating revenues.
Operating income used in margin calculations excludes the St. Louis Agency
adjustment (see "-- Publishing -- Agency Agreements."), stock option
cash-out and bonuses and general corporate expense (which are recorded as
operating expenses for financial reporting purposes).

(3) In 1996, the amounts included a partial year of operations for Scripps
League Newspapers, Inc. (subsequently renamed Pulitzer Community Newspapers,
Inc.) following its acquisition on July 1, 1996.

OPERATING STRATEGY

The Company's long-term operating strategy is to maximize each property's
growth and profitability through maintenance of editorial excellence, leadership
in locally-responsive news, and prudent control of costs. Management believes
that editorial excellence and leadership in locally-responsive news will, over
the long-term, allow the Company to maximize its market share in each of its
respective markets. In addition, providing a portfolio of products designed to
serve each property's broader market area as well as niche audiences, and
including both print and new media delivery, is considered a key to maintaining
and strengthening the Company's local market franchises. Experienced local
managers implement the Company's strategy in each market, with centralized
management providing oversight and guidance in all areas of planning and
operations.

The Company complements its internal growth strategies with a disciplined
and opportunistic acquisition strategy that is focused on acquiring publishing
properties that the Company believes are a good fit with its operating strategy,
possess attractive growth potential, generate strong cash flows and will offer
an attractive return on investment. Management believes that the Company's
reputation, financial position, cash flow and conservative capital structure,
among other factors, will assist the Company in pursuing acquisitions.

The Company believes that cost controls are an important tool in the
management of media properties that are subject to significant fluctuations in
advertising volume. The Company believes that prudent control of costs will
permit it to respond quickly when positive operating conditions offer
opportunities to expand market share and profitability and, alternatively, when
deteriorating operating conditions require cost reductions to protect
profitability. The Company's disciplined budgeting process is one of the key
elements in

3
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ITEM 1. BUSINESS -- CONTINUED
controlling costs. The Company employs production technology in all of its media
operations in order to minimize production costs and produce an attractive and
timely news product for its readers.

The Company's operations are geographically diverse, placing the Company in
the Midwest, Southwest and Western regions of the United States. Due to the
close relationship between economic activity and advertising volume, the Company
believes that geographic diversity will provide the Company with valuable
protection from regional economic variances.

PUBLISHING

The Company intends to continue the tradition of reporting and editorial
excellence that has resulted in the receipt of 17 Pulitzer Prizes* over the
years.

The Company publishes two major metropolitan daily newspapers, the
Post-Dispatch and the Star. Both daily newspapers have weekly total market
coverage sections that provide advertisers with market saturation, and both
offer alternative delivery systems that provide advertisers with either targeted
or total market coverage.

The PCN Group's 12 daily newspapers have a combined average daily
circulation of approximately 200,000. In addition, the PCN Group also publishes
more than 20 weekly newspapers associated with its dailies. The markets served
by these newspapers and their locations provide the Company with further
diversification and participation in several high growth areas of the western
United States. A strong focus on local reporting and editorial excellence is
also considered a key to long-term success in these markets.

The Company's revenues are derived primarily from advertising and
circulation, which averaged approximately 88 percent of total revenue over the
last five years. Advertising rates and rate structures and resulting revenues
vary among publications based, among other things, on circulation, type of
advertising, local market conditions and competition. The following table
provides a breakdown of the Company's revenues for the past five years.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996(1) 1995
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Advertising:
Retail.................................. $111,050 $111,028 $107,916 $ 91,373 $ 78,362
General................................. 17,371 12,380 10,466 10,123 7,645
Classified.............................. 129,443 117,313 109,435 90,443 75,925
-------- -------- -------- -------- --------
Total.............................. 257,864 240,721 227,817 191,939 161,932
Circulation............................... 85,965 88,075 87,611 81,434 76,349
Other..................................... 47,554 44,128 42,541 35,723 31,107
-------- -------- -------- -------- --------
Total.............................. $391,383 $372,924 $357,969 $309,096 $269,388
======== ======== ======== ======== ========
</TABLE>

- ---------------
(1) Revenue amounts for 1996 included a partial year of operations of Scripps
League Newspapers, Inc. (subsequently renamed Pulitzer Community Newspapers,
Inc.) following its acquisition on July 1, 1996.

ST. LOUIS POST-DISPATCH

Founded in 1878 by the first Joseph Pulitzer, the Post-Dispatch has a long
history of reporting and editorial excellence and innovation in newspaper
publishing under the direction of the Pulitzer family. The Post-Dispatch is a
morning daily and Sunday newspaper serving primarily the greater St. Louis
metropolitan area. St. Louis is currently the 17th largest metropolitan
statistical area in the United States with a population of approximately 2.6
million.

- ---------------

* Pulitzer Prizes are awarded annually at Columbia University by the Pulitzer
Prize Board, an independent entity affiliated with the Columbia University
School of Journalism, founded by the first Joseph Pulitzer.
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<PAGE> 5

ITEM 1. BUSINESS -- CONTINUED
Over the past several years, the Company has taken a number of steps
designed to strengthen the market position of the Post-Dispatch. In 1997, the
Post-Dispatch completed an extensive redesign intended to make the newspaper
more accessible and relevant to readers, and the Company is continuing to make
investments to enhance its news coverage capabilities and strengthen its
circulation and advertising operations. During 1998 and 1999, the Post-Dispatch
increased its local news coverage of suburban communities in the St. Louis area
by expanding to eight zone editions. These local news and advertising zone
sections, targeted at specific geographic areas, are included in the
Post-Dispatch twice a week.

The Post-Dispatch operates under an Agency Agreement, dated March 1, 1961,
as amended (the "St. Louis Agency Agreement"), between the Company and The
Herald Company, Inc. (the "Herald Company") pursuant to which the Company
performs all activities relating to the day-to-day operations of the newspaper,
but pursuant to which it must share one-half of the agency's operating income or
one-half of the agency's operating loss with the Herald Company (the "St. Louis
Agency"). The following table sets forth for the past five years certain
circulation and advertising information for the Post-Dispatch and operating
revenues for the St. Louis Agency, all of which are included in the Company's
consolidated financial statements. See "-- Agency Agreements."

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Post-Dispatch:
Circulation(1):
Daily (including Saturday)........ 307,375 324,059 319,887 319,203 323,137
Sunday............................ 509,110 520,635 530,442 540,434 545,882
Advertising linage (in thousands of
inches):
Retail............................... 774 832 841 819 880
General.............................. 152 102 91 101 75
Classified........................... 1,082 1,004 1,003 1,007 1,057
-------- -------- -------- -------- --------
Total............................. 2,008 1,938 1,935 1,927 2,012
Part run(2).......................... 836 571 607 792 594
-------- -------- -------- -------- --------
Total inches...................... 2,844 2,509 2,542 2,719 2,606
======== ======== ======== ======== ========
Operating revenues (in thousands):
Advertising.......................... $167,395 $156,309 $147,770 $137,054 $130,175
Circulation.......................... 60,650 63,208 63,216 63,858 64,862
Other(3)............................. 24,357 23,423 23,269 21,530 22,871
-------- -------- -------- -------- --------
Total............................. $252,402 $242,940 $234,255 $222,442 $217,908
======== ======== ======== ======== ========
</TABLE>

- ---------------
(1) Amounts for 1999 based on internal records of the Company for the
twelve-month period ended September 30. Amounts for prior years based on ABC
Publisher's Statements for the twelve-month periods ended September 30.

(2) Part run inches represent advertisements that are published in selected
copies (i.e., less than the full press run) of a daily edition of the
newspaper to specifically target certain geographic locations. The
advertisements typically appear in a special news and advertising section
designed specifically for the targeted geographic locations.

(3) Primarily revenues from preprinted inserts.

The Post-Dispatch has consistently been a leader in technological
innovation in the newspaper industry. The Company's commitment to the ongoing
enhancement of its operating systems has enabled the Post-Dispatch to offer a
continually improving product to both readers and advertisers while also
realizing substantial savings in labor cost. The Company believes the
Post-Dispatch has adequate facilities to sustain up to at least a 35 percent
increase in daily circulation without incurring significant capital
expenditures.

5
<PAGE> 6

ITEM 1. BUSINESS -- CONTINUED
The Post-Dispatch is distributed primarily through independent home
delivery carriers and single copy dealers. Home delivery accounted for
approximately 75 percent of circulation for the daily Post-Dispatch and
approximately 55 percent of circulation for the Sunday edition during 1999.

THE ARIZONA DAILY STAR

Founded in 1877, the Star is published in Tucson, Arizona, by the Company's
wholly-owned subsidiary, Star Publishing Company. The Star, a morning and Sunday
newspaper, and the Tucson Citizen (the "Citizen"), an afternoon newspaper owned
by Gannett Co., Inc. ("Gannett"), are southern Arizona's leading dailies. The
Star and the Citizen are published through an agency operation (the "Tucson
Agency") pursuant to an Agency Agreement, dated March 28, 1940, as amended and
restated (the "Tucson Agency Agreement"), and have a combined weekday
circulation of approximately 140,000. Tucson is currently the 69th largest
metropolitan statistical area in the United States with a population of
approximately 800,000.

The Tucson Agency operates through TNI Partners Inc. ("TNI Partners"), an
agency partnership which is owned half by the Company and half by Gannett. TNI
Partners is responsible for all aspects of the business of the two newspapers
other than editorial opinion and gathering and reporting news. Revenues and
expenses are generally shared equally by the Star and the Citizen. Unlike the
St. Louis Agency, the Company's consolidated financial statements include only
its share of the combined operating revenues and operating expenses of the two
newspapers. See "-- Agency Agreements."

As a result of the Tucson Agency, the financial performance of the
Company's Star Publishing Company subsidiary is directly affected by the
operations and performance of both the Star and the Citizen.

The following table sets forth certain information concerning circulation
and combined advertising linage of the Star and the Citizen and the Company's
share of the operating revenues of the Star and the Citizen for the past five
years.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Circulation(1):
Star daily........................... 97,598 96,142 96,101 96,198 97,134
Citizen daily........................ 40,625 42,444 44,009 46,062 47,240
Star Sunday.......................... 173,082 174,173 175,659 178,820 180,170
Combined advertising linage (in
thousands of inches):
Full run (all zones)
Retail............................ 1,703 1,581 1,587 1,499 1,565
General........................... 83 81 51 45 49
Classified........................ 2,068 1,852 1,713 1,684 1,682
-------- -------- -------- -------- --------
Total........................... 3,854 3,514 3,351 3,228 3,296
Part run(2)....................... 303 314 264 201 171
-------- -------- -------- -------- --------
Total inches.................... 4,157 3,828 3,615 3,429 3,467
======== ======== ======== ======== ========
Operating revenues (in thousands):
Advertising.......................... $ 37,828 $ 36,344 $ 34,302 $ 31,765 $ 31,332
Circulation.......................... 11,117 10,928 11,023 11,194 11,487
Other(3)............................. 8,268 7,909 7,712 7,139 6,703
-------- -------- -------- -------- --------
Total........................... $ 57,213 $ 55,181 $ 53,037 $ 50,098 $ 49,522
======== ======== ======== ======== ========
</TABLE>

- ---------------
(1) Amounts for 1999 are based on the internal records of the Company. Amounts
for 1998, 1997 and 1996 are based on ABC Publisher's Statements for the 52
week period ended December 31. Amounts for 1995 are based on ABC Publisher's
Statement for the 53 week period ended December 31.

6
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ITEM 1. BUSINESS -- CONTINUED
(2) Part run inches represent advertisements that are published in selected
copies (i.e., less than the full press run) of a daily edition of the
newspaper to specifically target certain geographic locations. The
advertisements typically appear in a special news and advertising section
designed specifically for the targeted geographic locations.

(3) Primarily revenues from preprinted inserts.

In 1999, the Star's daily edition accounted for approximately 71 percent of
the combined daily circulation of the Tucson Agency publications. The Star's
daily and Sunday editions accounted for approximately 59 percent of the agency's
total full run advertising linage.

The Star and the Citizen are printed at TNI Partners' modern, computerized
facility equipped with two, eight-unit Metro offset presses. The writing,
editing and composing functions have been computerized, increasing efficiency
and reducing workforce requirements.

PULITZER COMMUNITY NEWSPAPERS, INC.

On July 1, 1996, the Company acquired for approximately $216 million all
the stock of Scripps League Newspapers, Inc. (subsequently renamed Pulitzer
Community Newspapers, Inc.), a privately owned publisher of community newspapers
serving markets in the Midwest, Southwest and West. The PCN Group acquired The
Pantagraph on January 11, 2000 for approximately $180 million and now includes
12 daily newspapers which publish morning or afternoon editions during the week
and, generally, morning editions on the weekend. Home delivery through
independent contract carriers accounts for the significant portion of each
newspaper's circulation.

The 12 daily newspapers in the PCN Group, ranked in order of circulation
based on ABC Publisher's Statements for the 52 week period ended September 30,
1999 (except where noted), are:

<TABLE>
<CAPTION>
CIRCULATION
----------------
DAILY SUNDAY
------ ------
<S> <C> <C> <C>
The Pantagraph........................... Bloomington, Illinois 49,148 53,336
The Daily Herald......................... Provo, Utah 29,357 31,652
Santa Maria Times........................ Santa Maria, California 19,490 20,679
The Napa Valley Register................. Napa, California 18,598 19,050
The World................................ Coos Bay, Oregon 14,709 16,359
The Hanford Sentinel..................... Hanford, California 13,453 13,347
The Arizona Daily Sun.................... Flagstaff, Arizona 12,508 14,135
Troy Daily News.......................... Troy, Ohio 11,043 12,742
The Daily Chronicle...................... DeKalb, Illinois 9,847 10,950
The Daily Journal........................ Park Hills, Missouri 9,239 9,531
The Garden Island........................ Lihue, Hawaii 8,312 9,138
The Daily News........................... Rhinelander, Wisconsin(1) 4,547 5,248
</TABLE>

- ---------------
(1) Amounts are based on the internal records of the Company.

In addition, the PCN Group operates weekly newspapers in Petaluma,
California and Farmington and Fredericktown, Missouri and three weekly newspaper
groups in conjunction with its properties in Bloomington, Illinois and Hanford
and Santa Maria, California.

The markets served by the PCN Group are attractive because they generally
have desirable demographic characteristics and above-average growth rates.
Collectively, the PCN Group's markets exceed U.S. averages in such key measures
as annual household growth rate, median household income and median years of
school completed. In addition, the median home value in these markets exceeds
the U.S. median.

7
<PAGE> 8

ITEM 1. BUSINESS -- CONTINUED
Further, these markets, which often are not served by major metropolitan
media, tend to be characterized by less media competition, which gives the
Company an opportunity to sustain and expand market shares. The following table
sets forth for the past four years the operating revenues of the PCN Group.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1999 1998 1997 1996(1)
------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Operating revenues:
Advertising........................................... $52,641 $48,068 $45,745 $23,120
Circulation........................................... 14,198 13,939 13,372 6,382
Other(2).............................................. 12,880 11,060 10,553 5,353
------- ------- ------- -------
Total................................................... $79,719 $73,067 $69,670 $34,855
======= ======= ======= =======
</TABLE>

- ---------------
(1) Amounts include revenues for the six month period from July 1, 1996 to
December 31, 1996, subsequent to the Company's acquisition of the PCN Group
on July 1, 1996.

(2) Primarily revenues from preprinted inserts.

The Company has recently made a significant investment in new computer
systems which handle typesetting, editing and web publishing, as well as
financial and statistical reporting, for its PCN Group properties. The
standardized systems permit centralized maintenance and support.

RELATED "NEW MEDIA" OPERATIONS

The Company has developed "new media" operations that are designed to
enhance, complement and add value to its traditional newspaper publishing
businesses by providing consumer and advertiser services through electronic
dissemination of information via the world wide web/Internet. The Company's
objective in these operations is to build audience to generate revenues in
support of its publishing franchises.

At the center of the Company's Internet strategy are the websites developed
in conjunction with the Company's newspaper properties. Each of the websites
takes full advantage of the newspapers' extensive intelligence of the
communities they serve, strong advertiser relationships and substantial
marketing expertise to produce deep, relevant, locally focused online
publications.

The Company's strategy is most fully developed at Postnet.com
(www.postnet.com) in St. Louis and Starnet (www.azstarnet.com) in Tucson. Both
websites offer on-line versions of the daily newspapers and enhanced online
advertiser services featuring the three major classified advertising categories
- -- automotive, real estate and help wanted. In addition, the websites also serve
as city portals, providing community information and acting as a community
center and marketplace, enabling businesses and individuals to build
relationships with each other and the newspaper. As the Company's websites play
these key community roles, the Company is creating revenue streams from
advertising and from service and transaction fees.

In February, 2000, Editor & Publisher, a trade magazine and research center
for the newspaper industry, awarded Postnet.com with an EPpy award for having
the best Arts & Entertainment section among 400

8
<PAGE> 9

ITEM 1. BUSINESS -- CONTINUED
competing websites associated with newspapers. Listed below are two key
statistics for both the Postnet and Starnet websites.

<TABLE>
<CAPTION>
FOURTH QUARTER
--------------
1999 1998 % CHANGE
----- ----- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Postnet.com (Launched 1/96):
Average page views per day (1)............................ 279.7 218.4 28.1%
Average sessions per day (2).............................. 75.7 65.4 15.7%
Starnet.com (Launched 6/95):
Average page views per day (1)............................ 143 132 8.3%
Average sessions per day (2).............................. 41 36 13.9%
</TABLE>

- ---------------
(1) A "page view" occurs when a web server is asked to provide an HTML page to a
website visitor.

(2) A "session" is a collection of "page views" seen by a particular visitor at
one time.

ACQUISITION STRATEGY

One of the Company's primary growth strategies has been a disciplined and
opportunistic acquisition program. In evaluating acquisition opportunities, the
Company requires that candidates must: (i) be in businesses related to the
Company's core publishing competencies; (ii) have strong cash flows; (iii)
possess good growth or economic characteristics and, where possible, offer a
clustering opportunity with respect to present or future properties; (iv)
provide an opportunity for its disciplined management approach to add value; and
(v) offer an attractive return on investment.

AGENCY AGREEMENTS

Newspapers in approximately 12 cities operate under joint operating or
agency agreements. Agency agreements generally provide for newspapers servicing
the same market to share certain printing and other facilities and to pool
certain revenues and expenses in order to decrease aggregate expenses and
thereby allow the continuing operation of multiple newspapers serving the same
market. The Newspaper Preservation Act of 1970 permits joint operating
agreements between newspapers under certain circumstances without violation of
the Federal antitrust laws.

St. Louis Agency. An agency operation between the Company and the Herald
Company is conducted under the provisions of the St. Louis Agency Agreement. For
many years, the Post-Dispatch was the afternoon and Sunday newspaper serving St.
Louis, and the St. Louis Globe-Democrat (the "Globe Democrat") was the morning
paper and also published a weekend edition. Although separately owned, from 1961
through February 1984, the publication of both the Post-Dispatch and the
Globe-Democrat was governed by the St. Louis Agency Agreement. From 1961 to
1979, the two newspapers controlled their own news, editorial, advertising,
circulation, accounting and promotion departments and Old Pulitzer managed the
production and printing of both newspapers. In 1979, Old Pulitzer assumed full
responsibility for advertising, circulation, accounting and promotion for both
newspapers. In February 1984, after a number of years of unfavorable financial
results at the St. Louis Agency, the Globe-Democrat was sold by the Herald
Company and the St. Louis Agency Agreement was revised to eliminate any
continuing relationship between the two newspapers and to permit the
repositioning of the daily Post-Dispatch as a morning newspaper.

Following the renegotiation of the St. Louis Agency Agreement at the time
of the sale of the Globe-Democrat, the Herald Company retained the contractual
right to half the profits or losses (as defined) of the operations of the St.
Louis Agency, which from February 1984 forward consisted solely of the
publication of the Post-Dispatch. The St. Louis Agency Agreement generally
provides for the Herald Company to share half the cost of, and to share in a
portion of the proceeds from the sale of, capital assets used in the production
of the Post-Dispatch. Under the St. Louis Agency Agreement, the Company
supervises, manages and performs

9
<PAGE> 10

ITEM 1. BUSINESS -- CONTINUED
all activities relating to the day-to-day publication of the Post-Dispatch and
is solely responsible for the news and editorial policies of the newspaper.

The consolidated financial statements of the Company include all the
operating revenues and expenses of the St. Louis Agency. An agency adjustment is
provided as an operating expense which reflects that portion of the operating
income of the St. Louis Agency allocated to the Herald Company. Under the St.
Louis Agency Agreement, for fiscal 1999, 1998, 1997, 1996, and 1995, the Company
paid the Herald Company $25,029,000, $20,729,000 $19,450,000, $13,972,000, and
$12,502,000, respectively, for the Herald Company's share of the operating
income of the St. Louis Agency. As a result of this agency adjustment, the
Company is, and during the term of the St. Louis Agency will continue to be,
entitled to half the profits (as defined) from the operations of the St. Louis
Agency.

The current term of the St. Louis Agency Agreement runs through December
31, 2034, following which either party may elect to renew the agreement for
successive periods of 30 years each.

Tucson Agency. The Tucson Agency Agreement has, since 1940, governed the
joint operations of the Star and Citizen. For financial reporting purposes, the
operations of the Tucson Agency are reflected in the Company's consolidated
financial statements differently from the operations of the St. Louis Agency.
The consolidated financial statements of the Company include only the Company's
share of the combined revenues, operating expenses and income of the Star and
Citizen. TNI Partners, as agent for the Company and Gannett, is responsible for
advertising and circulation, printing and delivery and collection of all
revenues of the Star and the Citizen. The Board of Directors of TNI Partners
presently consists of three directors chosen by the Company and three chosen by
Gannett. Budgetary, personnel and other non-news and editorial policy matters,
such as advertising and circulation policies and rates or prices, are determined
by the Board of Directors of TNI Partners. Each newspaper is responsible for its
own news and editorial content. Revenues and expenses are recorded by TNI
Partners, and the resulting profit is generally split 50-50 between the Company
and Gannett. Both partners have certain administrative costs which are borne
separately. As a result of the Tucson Agency, the Star and the Citizen benefit
from increases and can be adversely affected by decreases in each other's
circulation.

The Tucson Agency Agreement runs through June 1, 2015, and contains renewal
provisions for successive periods of 25 years each.

COMPETITION

The Company's publications compete for readership and advertising revenues
in varying degrees with other metropolitan, suburban, neighborhood and national
newspapers and other publications as well as with direct mail, television,
radio, cable, Internet, online services and other new media technologies, yellow
page directories, billboards and other news and advertising media. Competition
for advertising is based upon circulation levels, readership demographics, price
and advertiser results. Competition for circulation is generally based upon the
content, journalistic quality and price of the publication. In St. Louis and its
surrounding suburban communities, the Post-Dispatch's print competition for
circulation and advertising revenues includes paid suburban daily newspapers, a
chain of weekly community newspapers and shoppers, independently owned community
newspapers and shoppers and direct mail advertisers. These community newspapers
and shoppers and direct mail companies target selected geographic markets
throughout the St. Louis metropolitan area.

Due to the agency relationship existing in Tucson, the Star and the Citizen
cannot be viewed as competitors for advertising or circulation revenues. The
Star and the Citizen compete against other Tucson-area news and advertising
media and against Phoenix-area and national newspapers and other publications.

EMPLOYEE RELATIONS

The Post-Dispatch has contracts with substantially all of its production
unions, with expiration dates ranging from February 2002 through February 2010.
In addition, the Post-Dispatch has a multi-year contract
10
<PAGE> 11

ITEM 1. BUSINESS -- CONTINUED
with the St. Louis Newspaper Guild which expires in January 2003. All of the
Post-Dispatch labor contracts contain no strike provisions.

TNI Partners' contract with Tucson Graphic Communications Union Local No.
212, covering certain pressroom employees, expires on June 30, 2000. In each of
the last several years, this contract has been renegotiated for a one-year term.

RAW MATERIALS

The Company's newspaper operations are significantly impacted by the cost
of newsprint which accounted for approximately 16 percent of the total 1999
operating expenses. During 1999, the Company used approximately 102,000 metric
tons of newsprint in its production process at a total cost of approximately $52
million. Consumption at the Post-Dispatch represented approximately 71,600
metric tons of the Company's total newsprint usage in 1999. In the last five
years, the Company's average cost per ton of newsprint has varied from a low of
$510 per metric ton in 1999 to a high of $675 per metric ton in 1995. During the
first quarter of 2000, the Company's average cost per metric ton for newsprint
has been approximately $510. In addition, the Company has been informed by its
suppliers of a plan to increase the price of newsprint by $50 per metric ton on
April 1, 2000.

The Post-Dispatch obtains the newsprint necessary for its operations from
five separate mills, three of which are located in Canada and two in the United
States. The Post-Dispatch has guaranteed the future supply of certain volume
levels through long-term agreements with two of its newsprint suppliers. The
Company believes that the absence of long-term agreements with the remaining
three newsprint suppliers will not affect the Company's ability to obtain
newsprint at competitive prices.

The Company acquired five newsprint contracts with the purchase of the PCN
Group in 1996. Combined with the tonnage purchased for the Post-Dispatch, the
Company has been able to leverage its pricing power to obtain the best price
available for the PCN Group, and to assure adequate supplies for all locations.

TNI Partners obtains the newsprint necessary for the Tucson Agency's
operations pursuant to an arrangement with Gannett, the owner of the Citizen.
Gannett purchases newsprint on behalf of TNI Partners under various contractual
arrangements and agreements. Newsprint is also purchased on the spot market.

EMPLOYEES

At December 31, 1999, the Company had approximately 2,300 full-time
employees. In St. Louis, a majority of the approximately 1,200 full-time
employees are represented by unions. The Company considers its relationship with
its employees to be good.

ITEM 2. PROPERTIES

The corporate headquarters of the Company is located at 900 North Tucker
Boulevard, St. Louis, Missouri. The general character, location and approximate
size of the principal physical properties used by the Company for its newspaper
publishing and related new media businesses at December 31, 1999, are set forth
below. Leases on the properties indicated as leased by the Company expire at
various dates through June 2007.

The Company believes that all of its owned and leased properties used in
connection with its operating activities are in good condition, well maintained
and adequate for its current and immediately foreseeable operating needs.

11
<PAGE> 12

ITEM 2. PROPERTIES -- CONTINUED

<TABLE>
<CAPTION>
APPROXIMATE AREA IN
SQUARE FEET
--------------------
GENERAL CHARACTER OF PROPERTY OWNED LEASED
- ----------------------------- -------- --------
<S> <C> <C>
Printing plants, business and editorial offices, and
warehouse space located in:
St. Louis, Missouri(1).................................... 598,200 147,100
St. Louis, Missouri....................................... 3,200
Tucson, Arizona(2)........................................ 265,000 51,900
Washington, D.C........................................... 2,250
Provo, Utah............................................... 26,400 11,000
Santa Maria, California................................... 20,800 4,400
Napa, California.......................................... 21,000
Coos Bay, Oregon.......................................... 15,200
Hanford, California....................................... 16,500 3,500
Flagstaff, Arizona........................................ 23,200
Troy, Ohio................................................ 36,600 100
DeKalb, Illinois.......................................... 15,900
Park Hills, Missouri...................................... 9,100
Lihue, Hawaii............................................. 8,500 20,900
Rhinelander, Wisconsin.................................... 6,400
Petaluma, California...................................... 9,000
Farmington, Missouri...................................... 11,800
Fredericktown, Missouri................................... 1,800
</TABLE>

- ---------------
(1) Property is subject to the provisions of the St. Louis Agency Agreement.

(2) The 265,000 square foot facility in Tucson, Arizona is used in the
production of the Star and the Citizen and is jointly owned with Gannett
pursuant to the Tucson Agency.

ITEM 3. LEGAL PROCEEDINGS

Subsequent to the acquisition of Scripps League Newspapers, Inc. ("Scripps
League"), Barry H. Scripps commenced an action against Edward W. Scripps, Betty
Knight Scripps and Pulitzer Community Newspapers, Inc. Barry H. Scripps is the
child of Edward W. Scripps and Betty Knight Scripps. Barry Scripps, a former
minority shareholder and executive employee of Scripps League, alleges that the
defendant Betty Knight Scripps formed and implemented a wrongful scheme to
transfer the ownership of Scripps League outside the Scripps family in violation
of the Scripps League corporate mission by (i) inducing the defendant Edward W.
Scripps to breach their life-long promises to Barry Scripps to retain the
ownership of Scripps League Newspapers in the family and ultimately turn over
its management and control to Barry Scripps; (ii) engineering an unlawful
freeze-out of Barry Scripps as a minority shareholder from Scripps League and
its subsidiaries; and (iii) tortiously causing Scripps League to breach its
promise to Barry Scripps of permanent employment. The claims asserted are for
breach of promise against Edward W. Scripps and Betty Knight Scripps, breach of
employment contract against Pulitzer Community Newspapers, Inc. as successor to
Scripps League, interference with contract against Betty Knight Scripps, breach
of fiduciary duty against Betty Knight Scripps, and promissory estoppel against
Edward W. and Betty Knight Scripps. Barry Scripps seeks (i) money damages,
together with interest and counsel fees in the amount to be proven at trial
against Edward and Betty Scripps; (ii) judgment rescinding each of the actions
that Betty Knight Scripps caused to be taken that allegedly froze out Barry
Scripps as a stockholder in Scripps League; and (iii) damages against Pulitzer
Community Newspapers, Inc. for loss of income plus interest and counsel fees in
an amount to be proven at trial for breach of the purported employment
agreement. Edward W. Scripps and Betty Knight Scripps, jointly and severally,
agreed to indemnify the Company and its affiliates, officers, directors,

12
<PAGE> 13

ITEM 3. LEGAL PROCEEDINGS -- CONTINUED
stockholders, employees, agents, successors and assigns at all times after the
closing for any and all losses arising from Barry Scripps' claims. On March 26,
1998, the Court issued an order granting defendants' motion for summary judgment
and dismissed all of Barry Scripps' charges and claims against all defendants,
and on April 29, 1998, a final judgment was entered with respect to that order.
Barry Scripps filed a notice of appeal on May 21, 1998, and Barry Scripps' brief
in connection with that appeal was filed with the Appeals Court of the
Commonwealth of Massachusetts on March 18, 1999.

The Company has been involved, from time to time, in various claims and
lawsuits incidental to the ordinary course of its business, including such
matters as libel, slander and defamation actions and complaints alleging
discrimination. While the results of litigation cannot be predicted, management
believes the ultimate outcome of any existing litigation will not have a
material adverse effect on the consolidated financial statements of the Company
and its subsidiaries.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.

13
<PAGE> 14

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

Prior to the Spin-off, the Company's common stock and Class B common stock
did not trade in a public market. Old Pulitzer's common stock was listed and
traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol "PTZ".
The separate existence of Old Pulitzer ceased on March 18, 1999 after the
completion of the Transactions. The shares of the Company's common stock are
listed on the NYSE and, as of March 19, 1999, trade under the symbol "PTZ". The
shares of the Company's Class B common stock do not trade in a public market.

At March 20, 2000, there were approximately 441 record holders of the
Company's common stock and 31 record holders of its Class B common stock.

The following table sets forth the range of high and low sales prices for
Pulitzer Inc. and Old Pulitzer common stock and dividends paid for each
quarterly period in the past two years:

<TABLE>
<CAPTION>
HIGH(2) LOW(2) DIVIDEND(1)
------- ------ -----------
<S> <C> <C> <C>
1999
First Quarter (12/28/98 -- 3/18/99)......................... $88.88 $77.50 $0.00
First Quarter (3/19/99 -- 3/28/99).......................... 43.38 41.44 0.00
Second Quarter.............................................. 45.44 39.88 0.15
Third Quarter............................................... 48.56 42.88 0.15
Fourth Quarter.............................................. 46.50 36.25 0.15
</TABLE>

<TABLE>
<CAPTION>
HIGH(2) LOW(2) DIVIDEND(1)
------- ------ -----------
<S> <C> <C> <C>
1998
First Quarter............................................... $87.44 $57.44 $0.15
Second Quarter.............................................. 92.13 77.75 0.15
Third Quarter............................................... 89.63 74.38 0.15
Fourth Quarter.............................................. 85.69 64.38 0.30
</TABLE>

- ---------------
(1) In 1999, the Company declared and paid cash dividends of $0.45 per share of
common stock and Class B common stock. In 1998, Old Pulitzer declared cash
dividends of $0.75 per share of common stock and Class B common stock,
including a cash dividend of $0.15 per share of common stock and Class B
common stock which was declared in December 1998 and paid to stockholders in
January 1999. The dividend declared in December 1998 represented the
acceleration of Old Pulitzer's dividend historically declared in the first
quarter of each fiscal year. As a result, the Company did not declare a
quarterly dividend in the first quarter of 1999.

(2) Share prices for all of 1998 and for the first quarter of 1999 through
3/18/99 relate to the common stock of Old Pulitzer before the Spin-off.
Share prices for 1999 subsequent to 3/18/99 relate to the common stock of
the Company.

On January 5, 2000, the Board of Directors of the Company announced a 6.7
percent increase in the dividend on its common stock and Class B common stock to
$0.16 per share from $0.15 per share. The cash dividend was paid on February 1,
2000. On March 9, 2000, the Board of Directors of the Company declared a
dividend of $0.16 payable on May 1, 2000. Future dividends will depend upon,
among other things, the Company's earnings, financial condition, cash flows,
capital requirements and other relevant considerations, including the
limitations under any credit agreement or other agreement to which the Company
may become a party in the future.

14
<PAGE> 15

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS
Operating Revenues -- net.............. $391,383 $372,924 $357,969 $309,096 $269,388
-------- -------- -------- -------- --------
Operating Expenses:
Operations........................... 148,578 150,266 145,730 139,259 125,811
Selling, general and
administrative.................... 148,242 139,148 132,238 114,628 101,375
General corporate expense............ 6,662 5,806 6,007 5,532 4,666
Stock option cash-outs and bonuses... 26,685
St. Louis Agency adjustment.......... 25,029 20,729 19,450 13,972 12,502
Depreciation and amortization........ 17,091 14,054 13,007 8,660 4,307
-------- -------- -------- -------- --------
Total operating expenses.......... 372,287 330,003 316,432 282,051 248,661
-------- -------- -------- -------- --------
Operating income....................... 19,096 42,921 41,537 27,045 20,727
Interest income........................ 25,377 4,967 4,391 4,509 5,196
Net gain (loss) on marketable
securities and investments........... (111) 1,322 260
Net other expense...................... (2,697) (2,139) (1,202) (5,870) (2,319)
-------- -------- -------- -------- --------
Income from continuing operations
before provision for income taxes.... 41,665 47,071 44,986 25,684 23,604
Provision for income taxes............. 18,708 20,055 19,227 10,892 9,149
-------- -------- -------- -------- --------
Income from continuing operations...... 22,957 27,016 25,759 14,792 14,455
Discontinued operations, net of tax.... (21,449) 49,268 40,269 42,708 34,867
-------- -------- -------- -------- --------
NET INCOME............................. $ 1,508 $ 76,284 $ 66,028 $ 57,500 $ 49,322
======== ======== ======== ======== ========
Basic Earnings Per Share of Stock:
Income from continuing operations.... $ 1.02 $ 1.21 $ 1.17 $ 0.67 $ 0.66
Discontinued operations.............. (0.95) 2.20 1.82 1.95 1.60
-------- -------- -------- -------- --------
Basic earnings per share............. $ 0.07 $ 3.41 $ 2.99 $ 2.62 $ 2.26
======== ======== ======== ======== ========
Weighted average number of shares
outstanding....................... 22,578 22,381 22,110 21,926 21,800
======== ======== ======== ======== ========
Diluted Earnings Per Share of Stock:
Income from continuing operations.... $ 1.02 $ 1.19 $ 1.15 $ 0.66 $ 0.65
Discontinued operations.............. (0.95) 2.16 1.79 1.92 1.58
-------- -------- -------- -------- --------
Diluted earnings per share........... $ 0.07 $ 3.35 $ 2.94 $ 2.58 $ 2.23
======== ======== ======== ======== ========
Weighted average number of shares
outstanding....................... 22,601 22,753 22,452 22,273 22,097
======== ======== ======== ======== ========
Dividends per share of common stock and
Class B common stock................. $ 0.45 $ 0.75 $ 0.52 $ 0.46 $ 0.41
======== ======== ======== ======== ========
OTHER DATA
Cash and cash equivalents.............. $557,891 $110,171 $ 62,749 $ 73,052 $100,380
Working capital........................ 595,530 124,675 75,830 78,927 112,990
Total assets........................... 978,287 546,393 464,311 398,416 333,641
Stockholders' equity................... 813,451 385,357 310,777 249,937 198,771
</TABLE>

15
<PAGE> 16

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Statements in this Annual Report on Form 10-K concerning the Company's
business outlook or future economic performance, anticipated profitability,
revenues, expenses or other financial items, together with other statements that
are not historical facts, are "forward-looking statements" as that term is
defined under the Federal Securities Laws. Forward-looking statements are
subject to risks, uncertainties and other factors which could cause actual
results to differ materially from those stated in such statements. Such risks,
uncertainties and factors include, but are not limited to, industry cyclicality,
the seasonal nature of the business, changes in pricing or other actions by
competitors or suppliers, and general economic conditions, as well as other
risks detailed in the Company's filings with the Securities and Exchange
Commission including this Annual Report on Form 10-K.

GENERAL

The Company was organized as a corporation in 1998 and is engaged in
newspaper publishing and related new media operations, operating the newspaper
properties operated by Pulitzer Publishing Company ("Old Pulitzer") prior to the
Spin-off (as defined below). Prior to the Spin-off, the Company was a
wholly-owned subsidiary of Old Pulitzer.

As of May 25, 1998, Old Pulitzer, the Company and Hearst-Argyle Television,
Inc. ("Hearst-Argyle") entered into an Amended and Restated Agreement and Plan
of Merger (the "Merger Agreement") pursuant to which Hearst-Argyle agreed to
acquire Old Pulitzer's television and radio broadcasting operations
(collectively, the "Broadcasting Business") in exchange for the issuance to Old
Pulitzer's stockholders of 37,096,774 shares of Hearst-Argyle's Series A common
stock. The Broadcasting Business consisted of nine network-affiliated television
stations and five radio stations owned and operated by Pulitzer Broadcasting
Company and its wholly-owned subsidiaries. On March 18, 1999, the Broadcasting
Business was acquired by Hearst-Argyle through the merger (the "Merger") of Old
Pulitzer into Hearst-Argyle. Prior to the Merger, Old Pulitzer's newspaper
publishing and related new media businesses were contributed to the Company in a
tax-free "spin-off" to Old Pulitzer stockholders (the "Spin-off"). The Merger
and Spin-off are collectively referred to as the "Transactions."

Old Pulitzer's historical basis in its newspaper publishing and related new
media assets and liabilities have been carried over to the Company. The
Transactions represent a reverse-spin transaction and, accordingly, the
Company's results of operations for periods prior to the consummation of the
Transactions are identical to the historical results of operations previously
reported by Old Pulitzer. Results of the Company's newspaper publishing and
related new media businesses are reported as continuing operations, and the
results of the Broadcasting Business owned by Old Pulitzer prior to the Merger
are reported as discontinued operations, in the financial statements included in
Item 8 of this Annual Report on Form 10-K.

The Company's operating revenues are significantly influenced by a number
of factors, including overall advertising expenditures, the appeal of newspapers
in comparison to other forms of advertising, the performance of the Company in
comparison to its competitors in specific markets, the strength of the national
economy and general economic conditions and population growth in the markets
served by the Company.

The Company's business tends to be seasonal, with peak revenues and profits
generally occurring in the fourth and, to a lesser extent, second quarters of
each year as a result of increased advertising activity during the Christmas and
spring holiday periods. The first quarter is historically the weakest quarter
for revenues and profits.

RECENT EVENTS

16
<PAGE> 17

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
capital, which will be settled with Chronicle through a separate working capital
adjustment. The Company funded this acquisition with the proceeds from the sale
of a portion of its investments in marketable securities.

1999 COMPARED WITH 1998

CONTINUING OPERATIONS -- PUBLISHING

Operating revenues for the year ended December 31, 1999 increased 4.9
percent to $391.4 million from $372.9 million in 1998. The gain primarily
reflected higher advertising revenues and the contribution from the Troy Daily
News, acquired in October 1998. In addition to the acquisition of the Troy Daily
News in 1998, the Company sold its daily newspapers in Hamilton, Montana and
Haverhill, Massachusetts in May 1999 and June 1998, respectively. Excluding the
results of properties acquired and sold from both 1999 and 1998, revenues for
the full year of 1999 increased 4 percent.

Newspaper advertising revenues increased $17.1 million, or 7.1 percent, in
1999. The current year increase included advertising revenue gains of 9.5
percent at the PCN Group, 7.1 percent at the Post-Dispatch and 4.1 percent at
the Star. The gains primarily reflected growth in classified advertising, and
higher national advertising revenue at the Post-Dispatch. At the PCN Group,
volume increases at most locations, along with new advertising from the Troy
Daily News, accounted for a significant portion of the higher advertising
revenue. Similarly, at the Star, higher advertising revenue reflected an
increase of approximately 9.7 percent in full run advertising volume (linage in
inches). At the Post-Dispatch, rate increases in January 1999 and higher
national, classified and part-run advertising volume accounted for the current
year advertising revenue increase. Excluding the results of properties acquired
and sold from both 1999 and 1998, advertising revenues for the full year of 1999
increased 6.5 percent.

Circulation revenues decreased approximately $2.1 million, or 2.4 percent,
in 1999. The lower circulation revenues primarily reflected declines in paid
circulation at the Post-Dispatch which were partially offset by new circulation
revenue from the Troy Daily News. The decline in circulation revenues at the
Post-Dispatch was in part related to the significantly higher revenues in the
third quarter of 1998 reflecting the positive impact on circulation related to
Mark McGwire's pursuit of the home run record.

Other publishing revenues, increased $3.4 million, or 7.8 percent, in 1999,
resulting primarily from higher preprint revenue at the PCN Group and higher
revenues from the Company's "new media" operations.

Operating expenses (including selling, general and administrative expenses,
general corporate expense and depreciation and amortization), excluding the St.
Louis Agency adjustment, increased to $347.3 million in 1999 from $309.3 million
in 1998, an increase of 12.3 percent. The significant increase resulted from
$26.7 million of stock option cash-out and bonus payments to publishing
employees in connection with the Merger. Excluding these Merger costs, operating
expenses increased 3.7 percent to $320.6 million in 1999. The increase on a
comparable basis reflected higher overall personnel costs of $9.8 million and
higher depreciation and amortization of $3 million, due in part to the
acquisition of the Troy Daily News in October 1998. These expense increases were
partially offset by a decline in newsprint costs of $5.7 million, reflecting
lower newsprint prices in the current year. Excluding the results of properties
acquired and sold from both 1999 and 1998, as well as the St. Louis Agency
adjustment and Merger costs, expenses for 1999 increased 2.5 percent.

The Company reported operating income for fiscal 1999 of $19.1 million
compared to operating income of $42.9 million in 1998. The decrease in the
current year income resulted from the Merger costs of $26.7 million. Excluding
these Merger costs, operating income would have increased 6.7 percent to $45.8
million. The increase on a comparable basis reflected the advertising revenue
gains and lower newsprint expense in the current year.

17
<PAGE> 18

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
Interest income for 1999 increased to $25.4 million from $5 million in the
prior year. The increase reflected the inflow of approximately $429 million of
net cash in connection with the Spin-off and Merger on March 18, 1999 (See
"Liquidity and Capital Resources").

The Company incurred a net loss on marketable securities and investments of
$111,000 in 1999 compared to a gain of $1.3 million in the prior year. The
current year loss reflected net realized losses of approximately $2.2 million
related to the sale of marketable debt securities partially offset by the
favorable performance of two limited partnership investments that generated
gains of approximately $2.1 million. The 1998 gain of $1.3 million primarily
reflected the favorable performance of two limited partnership investments.

Net other expense for 1999 was $2.7 million compared with $2.1 in the prior
year. The 1999 expense included an approximate $1.1 million loss related to the
sale of the Company's newspaper property in Hamilton, Montana on May 21, 1999
while the prior year included a loss of approximately $869,000 related to the
sale of the Company's newspaper property in Haverhill, Massachusetts on June 1,
1998.

The effective income tax rate for 1999 was 44.9 percent compared with a
rate of 42.6 percent in the prior year. The higher rate in 1999 primarily
reflected the impact of the Hamilton newspaper sale. The Company expects its
effective tax rate for 2000 to be approximately 42 percent.

The Company reported income from continuing operations of $23 million, or
$1.02 per diluted share, for the year ended December 31, 1999, compared with $27
million, or $1.19 per diluted share, in the prior year. The decline in current
year income resulted from the Merger costs of $26.7 million ($15.5 million
after-tax). Excluding these Merger costs, income from continuing operations
would have increased 42.3 percent to $38.4 million, or $1.70 per diluted share.
The increase on a comparable basis reflected the advertising revenue gains,
lower newsprint expense and higher interest income in the current year. Earnings
per share for 1999 and 1998 reflect losses from the sales of the Hamilton (1999)
and Haverhill (1998) newspaper properties of $0.09 and $0.02 per share,
respectively.

Fluctuations in the price of newsprint significantly impact the results of
the Company's operations, where newsprint expense accounts for approximately 16
percent of total operating costs. The Company's average cost for newsprint for
the year ended December 31, 1999 was approximately $514 per metric ton, compared
to approximately $577 per metric ton in 1998. For the full year of 1999, the
Company's newsprint cost and metric tons consumed, after giving effect to the
St. Louis Agency adjustment, were approximately $34 million and 66,000 tons
respectively. During the first quarter of 2000, the Company's average cost for
newsprint has been approximately $510 per metric ton. In addition, the Company
has been informed by its suppliers of a plan to increase the price of newsprint
by $50 per metric ton on April 1, 2000.

DISCONTINUED OPERATIONS -- BROADCASTING

For 1999, the Company reported a loss from discontinued operations of $21.4
million, or $0.95 per diluted share, compared to income of $49.3 million, or
$2.16 per diluted share, in the prior year. The current year loss resulted from
a combination of $25.3 million of one-time stock option cash-out and bonus
payments to broadcasting employees in connection with the Merger and a loss on
extinguishment of debt of approximately $18 million (approximately $17.2 million
prepayment penalty and $750,000 write-off of deferred financing fees). In
addition, only the broadcasting operations through March 18, 1999, the date of
the Merger, were included in 1999, compared to a full year of normal
broadcasting operations in the prior year.

1998 COMPARED WITH 1997

CONTINUING OPERATIONS -- PUBLISHING

Operating revenues for the year ended December 31, 1998 increased 4.2
percent to $372.9 million from $358 million in 1997. The increase primarily
reflected higher advertising revenues in 1998.

Newspaper advertising revenues increased $12.9 million, or 5.7 percent, in
1998. The current year increase resulted from higher classified and national
advertising revenue at both the Post-Dispatch and the

18
<PAGE> 19

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
Star along with higher retail advertising at the PCN Group. Full run advertising
volume (linage in inches) increased 0.1 percent at the Post-Dispatch and 4.9
percent at the Starfor 1998. In the fourth quarter of 1997 and first quarter of
1998, varying rate increases were implemented at the Post-Dispatch, the Star and
most of the PCN Group properties.

Circulation revenues increased approximately $464,000, or 0.5 percent, in
1998. The increase reflected slight fluctuations in paid circulation and average
rates at the Post-Dispatch, Star and PCN Group in 1998 compared to the prior
year.

Other publishing revenues, increased $1.6 million, or 3.7 percent, in 1998,
resulting primarily from higher preprint revenue at the PCN Group and higher
revenues from "new media" operations.

Operating income for fiscal 1998 increased 3.3 percent to $42.9 million in
1998 from $41.5 million in 1997. The 1998 increase reflected the current year
revenue gains.

The Company's net gain on marketable securities and investments was $1.3
million in 1998 compared to $260,000 in 1997 reflecting an increase in capital
gains from limited partnership investments.

Net other expense for 1998 was $2.1 million compared to $1.2 million in
1997. The 1998 increase reflected a one-time charge of approximately $869,000
related to the sale of the Haverhill Gazette on June 1, 1998.

The effective income tax rate for 1998 was 42.6 percent, compared to 42.7
percent in the prior year.

Income from continuing operations for the year ended December 31, 1998,
increased to $27 million, or $1.19 per diluted share, compared with $25.8
million, or $1.15 per diluted share, in the prior year. The 4.9 percent gain
reflected higher advertising revenues.

DISCONTINUED OPERATIONS -- BROADCASTING

Broadcasting operating revenues for 1998 increased 5.6 percent to $239.7
million from $227 million in 1997. For the year, a 6.8 percent increase in local
spot advertising and a 5.7 percent increase in national spot advertising were
partially offset by a 1.5 percent decline in network compensation. The current
year comparisons reflect the impact of increased political advertising of $15.1
million.

Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 0.4 percent
to $145.4 million in 1998 from $144.8 million in 1997. The slight increase was
attributable to higher overall personnel costs of $3.1 million and program
rights expense of $236,000 which are partially offset by decreases in
depreciation and amortization expense of $2.4 million and promotion expense of
$558,000.

Broadcasting operating income increased 14.8 percent to $94.4 million for
the year ended December 31, 1998 from $82.2 million in the prior year. The
increase in 1998 reflected the advertising revenue gains and a significant
decline in depreciation and amortization expense which partially offset other
expense increases.

Interest expense declined $2.6 million in 1998 compared to 1997 due to
lower average debt levels. Old Pulitzer's average debt level for 1998 decreased
to $180.1 million from $220 million in 1997 while Old Pulitzer's average
interest rate increased to 7.5 percent in 1998 from 7.3 percent in 1997. The
lower average debt levels and higher average interest rates in 1998 reflected
the payment of variable rate credit agreement

19
<PAGE> 20

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
borrowings during the last three quarters of 1997 and the scheduled repayment of
$12.5 million of 6.76 percent fixed rate debt in the third quarter of 1998.

The 1998 effective income tax rate related to discontinued operations was
39.1 percent, unchanged from the prior year.

Income from discontinued operations for the year ended December 31, 1998,
increased 22.3 percent to $49.3 million, or $2.16 per diluted share, compared
with $40.3 million, or $1.79 per diluted share, in 1997. The gain reflected a
combination of higher broadcasting operating income and a decline in interest
expense.

LIQUIDITY AND CAPITAL RESOURCES

On March 17, 1999, Old Pulitzer borrowed $700 million from Chase Manhattan
Bank pursuant to a short-term borrowing agreement (the "New Debt"). On March 18,
1999, Old Pulitzer used a portion of the proceeds from the New Debt to prepay
its existing long-term debt of approximately $172.7 million and pay a related
prepayment penalty of approximately $17.2 million. Old Pulitzer made additional
payments related to the Transactions including $47.1 million for stock option
cash-outs and bonuses (net of deferred compensation in the amount of $4.9
million), $31.8 million for professional fees related to the Transactions
(excluding $4.2 million paid prior to March 18, 1999) and a $2.9 million working
capital adjustment. The cash balance of the proceeds of the New Debt remained
with the Company following the Spin-off while the New Debt was assumed by
Hearst-Argyle at the time of the Merger. As a result, the Company has no
outstanding debt and cash and marketable securities of approximately $558
million as of December 31, 1999. In January 2000, the Company acquired the
assets of The Pantagraph in a $180 million purchase transaction. The Company
funded the Pantagraph acquisition with the proceeds from the sale of investments
in marketable securities.

As of December 31, 1999, commitments for capital expenditures were
approximately $4.3 million, relating to normal capital equipment replacements.
Capital expenditures to be made by the Company in fiscal 2000 are estimated to
be approximately $6.9 million. In addition, as of December 31, 1999, the Company
had capital contribution commitments of approximately $2.1 million related to a
limited partnership investment.

On July 16, 1999, the Company's Board of Directors approved the repurchase
of up to $50 million of its common stock in the open market. As of December 31,
1999, 527,300 shares had been repurchased for approximately $21.7 million.

At December 31, 1999, the Company had working capital of $595.5 million and
a current ratio of 16 to 1. This compares to working capital of $124.7 million
and a current ratio of 3.9 to 1 at December 31, 1998.

The Company generally expects to generate sufficient cash from operations
to cover ordinary capital expenditures, working capital requirements and
dividend payments.

Gross-Up Transaction

In connection with the September 1986 purchase of Old Pulitzer Class B
common stock from certain selling stockholders (the "1986 Selling
Stockholders"), Old Pulitzer agreed, under certain circumstances, to make an
additional payment to the 1986 Selling Stockholders in the event of a Gross-Up
Transaction. A "Gross-Up Transaction" was defined to mean, among other
transactions, (i) any merger, in any transaction or series of related
transactions, of more than 85 percent of the voting securities or equity of Old
Pulitzer pursuant to which holders of Old Pulitzer common stock receive
securities other than Old Pulitzer common stock and (ii) any recapitalization,
dividend or distribution, or series of related recapitalizations, dividends or
distributions, in which holders of Old Pulitzer common stock receive securities
(other than Old Pulitzer common stock) having a Fair Market Value (as defined
herein) of not less than 33 1/3 percent of the Fair Market Value of the shares
of Old Pulitzer common stock immediately prior to such transaction. The amount
of the additional payment, if any, would equal (x) the product of (i) the amount
by which the Transaction Proceeds (as defined herein) exceeds the Imputed Value
(as defined herein) multiplied by (ii) the applicable

20
<PAGE> 21

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
percentage (i.e., 50 percent for the period from May 13, 1996 through May 12,
2001) multiplied by (iii) the number of shares of Old Pulitzer common stock
issuable upon conversion of the shares of Old Pulitzer Class B common stock
owned by the 1986 Selling Stockholders, adjusted for, among other things, stock
dividends and stock splits; less (y) the sum of any additional payments
previously received by the 1986 Selling Stockholders; provided, however, that in
the event of any recapitalization, dividend or distribution, the amount by which
the Transaction Proceeds exceeds the Imputed Value shall not exceed the amount
paid or distributed pursuant to such recapitalization, dividend or distribution
in respect of one share of Old Pulitzer common stock.

The term "Transaction Proceeds" was defined to mean, in the case of a
merger, the aggregate Fair Market Value (as defined herein) of the consideration
received pursuant thereto by the holder of one share of Old Pulitzer common
stock, and, in the case of a recapitalization, dividend or distribution, the
aggregate Fair Market Value of the amounts paid or distributed in respect of one
share of Old Pulitzer common stock plus the aggregate Fair Market Value of one
share of Old Pulitzer common stock following such transaction. The "Imputed
Value" for one share of Old Pulitzer common stock on a given date was defined to
mean an amount equal to $28.82 compounded annually from May 12, 1986 to such
given date at the rate of 15 percent per annum, the result of which is $154.19
at May 12, 1998. There was no specific provision for adjustment of the $28.82
amount, but if it were adjusted to reflect all stock dividends and stock splits
of Old Pulitzer since September 30, 1986, it would have equaled $15.72, which if
compounded annually from May 12, 1986 at the rate of 15 percent per annum would
have equaled $84.11 at May 12, 1998.

"Fair Market Value," in the case of any consideration other than cash
received in a Gross-Up Transaction, was defined to mean the fair market value
thereof as agreed to by a valuation firm selected by Old Pulitzer and a
valuation firm selected by the 1986 Selling Stockholders, or, if the two
valuation firms do not agree on the fair market value, the fair market value of
such consideration as determined by a third valuation firm chosen by the two
previously selected valuation firms. Any such agreement or determination shall
be final and binding on the parties.

As a result of the foregoing, the amount of additional payments, if any,
that may be payable by the Company with respect to the Merger and the
distribution of the Company's common stock and Class B common stock in the
Spin-off (the "Distribution") cannot be determined at this time. However, if the
Distribution were determined to be a Gross-Up Transaction and if the Fair Market
Value of the Transaction Proceeds with respect to the Merger and the
Distribution were determined to exceed the Imputed Value, then the additional
payments to the 1986 Selling Stockholders would equal approximately $5.9 million
for each $1.00 per share by which the Transaction Proceeds exceed the Imputed
Value. Accordingly, depending on the ultimate resolution of the meaning and
application of various provisions of the Gross-Up Transaction agreements,
including the determination of Imputed Value and Fair Market Value of the
Transaction Proceeds, in the opinion of the Company's management, the amount of
an additional payment, if any, could be material to the consolidated financial
statements of the Company. The additional payment, if any, to the 1986 Selling
Stockholders would be recorded directly to additional paid-in capital as the
payment of this contingent amount would be a direct cost of the disposal of Old
Pulitzer's Broadcasting Business.

In the opinion of the Company's management, the amount of additional
payment, if any, is not likely to have a material adverse effect on the
Company's existing day-to-day newspaper publishing and related new media
properties. The amount of additional payment, if any, will reduce, however, the
amount of cash available to the Company to finance potential acquisition
opportunities in the future.

Merger Agreement Indemnification

Pursuant to the Merger Agreement, the Company is obligated to indemnify
Hearst-Argyle against losses related to: (i) on an after tax basis, certain tax
liabilities, including (A) any transfer tax liability attributable to the
Spin-off, (B) with certain exceptions, any tax liability of Old Pulitzer or any
subsidiary of Old Pulitzer attributable to any tax period (or portion thereof)
ending on or before the closing date of the Merger, including tax liabilities
resulting from the Spin-off, and (C) any tax liability of the Company or any
subsidiary
21
<PAGE> 22

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
of the Company; (ii) liabilities and obligations under any employee benefit
plans not assumed by Hearst-Argyle; (iii) any liabilities for payments made
pursuant to a Gross-Up Transaction; and (iv) certain other matters as set forth
in the Merger Agreement.

Information Systems and the Year 2000

The Year 2000 Issue refers to information systems that use two digits
rather than four digits to define the applicable year and the resulting
inability of such systems to accurately process certain date-based information
after the year 1999. The Company adopted a Year 2000 strategy that replaced its
significant non-compliant systems with new compliant systems prior to December
31, 1999. The Company completed the installation of these new systems on a
timely basis and has not experienced any significant disruption of its business
operations due to Year 2000 system failures.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary raw material used in the Company's operations is newsprint,
representing approximately 16 percent of operating expenses. The Company
consumed approximately 102,000 metric tons of newsprint during 1999 at an
average cost of approximately $514 per metric ton. Historically, newsprint has
been subject to significant price fluctuations from year to year, unrelated in
many cases to general economic conditions. In the last five years, the Company's
average cost per ton of newsprint has varied from a low of $514 per metric ton
in 1999 to a high of $675 per metric ton in 1995. The Company attempts to obtain
the best price available by combining newsprint purchases for its different
newspaper locations but does not enter into derivative contracts in an attempt
to reduce the impact of year to year price fluctuations on its consolidated
newsprint expense.

As of December 31, 1999, the Company had no outstanding debt and a combined
balance of cash and marketable securities of approximately $558 million.
Approximately $180 million of these funds was used to purchase The Pantagraph in
January 2000. The Company anticipates funding other potential newspaper
acquisitions with a portion of the available cash. In the interim, the Company's
investments in marketable securities include a mixture of short to mid-term
government, corporate and asset-backed debt obligations. These investments
expose the Company to market risks that may cause the future value of these
investments to be lower than the original cost of such investments at the time
of purchase.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements of Pulitzer Inc. and
Subsidiaries are filed as part of this Annual Report on Form 10-K. Supplementary
unaudited data with respect to the quarterly results of operations of the
Company are set forth in the Notes to Consolidated Financial Statements.

PULITZER INC. AND SUBSIDIARIES

Independent Auditors' Report

Statements of Consolidated Income for each of the Three Years in the Period
Ended December 31, 1999

Statements of Consolidated Financial Position at December 31, 1999 and 1998

Statements of Consolidated Stockholders' Equity for each of the Three Years
in the Period Ended December 31, 1999

Statements of Consolidated Cash Flows for each of the Three Years in the
Period Ended December 31, 1999

Notes to Consolidated Financial Statements for the Three Years in the
Period Ended December 31, 1999

22
<PAGE> 23

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
PULITZER INC.:

We have audited the accompanying statements of consolidated financial
position of Pulitzer Inc. and subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of income, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the companies at December 31,
1999 and 1998, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Saint Louis, Missouri
February 4, 2000

23
<PAGE> 24

PULITZER INC. AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
----------- ----------- -----------
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<S> <C> <C> <C>
OPERATING REVENUES -- NET:
Advertising............................................ $257,864 $240,721 $227,817
Circulation............................................ 85,965 88,075 87,611
Other.................................................. 47,554 44,128 42,541
-------- -------- --------
Total operating revenues............................ 391,383 372,924 357,969
-------- -------- --------
OPERATING EXPENSES:
Operations............................................. 148,578 150,266 145,730
Selling, general and administrative.................... 148,242 139,148 132,238
General corporate expense.............................. 6,662 5,806 6,007
Stock option cash-out and bonuses (Note 13)............ 26,685
St. Louis Agency adjustment (Note 3)................... 25,029 20,729 19,450
Depreciation and amortization.......................... 17,091 14,054 13,007
-------- -------- --------
Total operating expenses............................ 372,287 330,003 316,432
-------- -------- --------
Operating income....................................... 19,096 42,921 41,537
Interest income........................................ 25,377 4,967 4,391
Net gain (loss) on marketable securities and
investments......................................... (111) 1,322 260
Net other expense...................................... (2,697) (2,139) (1,202)
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR
INCOME TAXES........................................... 41,665 47,071 44,986
PROVISION FOR INCOME TAXES (Note 11)..................... 18,708 20,055 19,227
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS........................ 22,957 27,016 25,759
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
(Note 4)............................................... (21,449) 49,268 40,269
-------- -------- --------
NET INCOME............................................... $ 1,508 $ 76,284 $ 66,028
======== ======== ========
BASIC EARNINGS PER SHARE OF STOCK (Note 14):
Income from continuing operations...................... $ 1.02 $ 1.21 $ 1.17
Income (loss) from discontinued operations............. (0.95) 2.20 1.82
-------- -------- --------
Earnings per share..................................... $ 0.07 $ 3.41 $ 2.99
======== ======== ========
Weighted average number of shares outstanding.......... 22,578 22,381 22,110
======== ======== ========
DILUTED EARNINGS PER SHARE OF STOCK (Note 14):
Income from continuing operations...................... $ 1.02 $ 1.19 $ 1.15
Income (loss) from discontinued operations............. (0.95) 2.16 1.79
-------- -------- --------
Earnings per share..................................... $ 0.07 $ 3.35 $ 2.94
======== ======== ========
Weighted average number of shares outstanding.......... 22,601 22,753 22,452
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.
24
<PAGE> 25

PULITZER INC. AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED FINANCIAL POSITION

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $106,177 $110,171
Marketable securities (Note 6)............................ 451,714
Trade accounts receivable (less allowance for doubtful
accounts of $2,362 and $1,722)......................... 42,175 42,658
Inventory................................................. 5,146 2,587
Income taxes receivable................................... 18,279
Prepaid expenses and other................................ 11,729 12,564
-------- --------
Total current assets................................... 635,220 167,980
-------- --------
PROPERTIES:
Land...................................................... 5,611 5,536
Buildings................................................. 45,034 43,511
Machinery and equipment................................... 107,796 98,848
Construction in progress.................................. 7,158 8,442
-------- --------
Total.................................................. 165,599 156,337
Less accumulated depreciation............................. 81,995 72,186
-------- --------
Properties -- net...................................... 83,604 84,151
-------- --------
INTANGIBLE AND OTHER ASSETS:
Intangible assets -- net of amortization (Note 7)......... 185,492 197,154
Receivable from The Herald Company (Notes 3 and 10)....... 35,901 38,683
Net assets of Broadcasting Business (Note 4).............. 35,717
Other..................................................... 38,070 22,708
-------- --------
Total intangible and other assets...................... 259,463 294,262
-------- --------
TOTAL................................................ $978,287 $546,393
======== ========
</TABLE>

(Continued)

25
<PAGE> 26

PULITZER INC. AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED FINANCIAL POSITION

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1999 1998
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable.................................... $ 13,771 $ 12,253
Salaries, wages and commissions........................... 12,481 10,911
Income taxes payable...................................... 2,832
Pension obligations (Note 9).............................. 288 184
Acquisition payable....................................... 9,707 9,707
Other..................................................... 3,443 7,418
-------- ---------
Total current liabilities.............................. 39,690 43,305
-------- ---------
PENSION OBLIGATIONS (Note 9)................................ 26,549 23,625
-------- ---------
POSTRETIREMENT AND POSTEMPLOYMENT BENEFIT OBLIGATIONS (Note
10)....................................................... 86,902 88,397
-------- ---------
OTHER LONG-TERM LIABILITIES................................. 11,695 5,709
-------- ---------
COMMITMENTS AND CONTINGENCIES (Note 15)
STOCKHOLDERS' EQUITY (Note 12):
Preferred stock, $.01 par value; authorized -- 100,000,000
shares in 1999 and 25,000,000 in 1998; issued and
outstanding -- none Common stock, $.01 par value;
authorized -- 100,000,000 shares in 1999 and 50,000,000
in 1998; issued -- 8,513,203 in 1999 and 7,242,974 in
1998................................................... 85 72
Class B common stock, convertible, $.01 par value;
100,000,000 shares authorized; issued -- 14,131,814 in
1999 and 27,019,880 in 1998............................ 141 270
Additional paid-in capital................................ 425,451 151,574
Retained earnings......................................... 413,676 422,329
Accumulated other comprehensive loss...................... (4,196) (915)
-------- ---------
Total.................................................. 835,157 573,330
Treasury stock -- at cost; 527,471 and 25,519 shares of
common stock in 1999 and 1998, respectively, and
11,700,850 shares of Class B common stock in 1998......... (21,706) (187,973)
-------- ---------
Total stockholders' equity............................. 813,451 385,357
-------- ---------
TOTAL................................................ $978,287 $ 546,393
======== =========
</TABLE>

(Concluded)

See accompanying notes to consolidated financial statements.
26
<PAGE> 27

PULITZER INC. AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ACCUMULATED
CLASS B ADDITIONAL OTHER TOTAL
COMMON COMMON PAID-IN RETAINED COMPREHENSIVE TREASURY STOCKHOLDERS'
STOCK STOCK CAPITAL EARNINGS INCOME (LOSS) STOCK EQUITY
------ ------- ---------- -------- ------------- --------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1997......... $65 $272 $129,173 $308,283 $ -- $(187,856) $249,937
Issuance of common stock grants... 70 70
Common stock options exercised.... 2 3,297 3,299
Conversion of Class B common stock
to common stock................. 1 (1)
Common stock issued under Employee
Stock Purchase Plan............. 322 322
Tax benefit from stock options
exercised....................... 2,680 2,680
Net income........................ 66,028 66,028
Cash dividends declared $0.52 per
share of common and Class B
common.......................... (11,483) (11,483)
Purchase of treasury stock........ (76) (76)
--- ---- -------- -------- ------- --------- --------
BALANCES AT DECEMBER 31, 1997....... 68 271 135,542 362,828 (187,932) 310,777
Issuance of common stock grants... 68 68
Common stock options exercised.... 3 7,182 7,185
Conversion of Class B common stock
to common stock................. 1 (1)
Common stock issued under Employee
Stock Purchase Plan............. 1,370 1,370
Tax benefit from stock options
exercised....................... 7,412 7,412
Comprehensive income (loss):
Net income........................ 76,284 76,284
Other comprehensive income, net of
tax-minimum pension liability
adjustment...................... (915) (915)
--------
Comprehensive income.............. 75,369
--------
Cash dividends declared $0.75 per
share of common and Class B
common.......................... (16,783) (16,783)
Purchase of treasury stock........ (41) (41)
--- ---- -------- -------- ------- --------- --------
BALANCES AT DECEMBER 31, 1998....... 72 270 151,574 422,329 (915) (187,973) 385,357
Issuance of common stock grants... 610 610
Common stock options exercised.... 1 2,280 2,281
Conversion of Class B common stock
to common stock................. 12 (12)
Common stock issued under Employee
Stock Purchase Plan............. 191 191
Tax benefit from stock options
exercised....................... 2,318 2,318
Comprehensive income (loss):
Net income........................ 1,508 1,508
Other comprehensive income, net of
tax-minimum pension liability
adjustment...................... 894 894
Other comprehensive income, net of
tax-unrealized loss on
marketable securities........... (4,175) (4,175)
--------
Comprehensive (loss).............. (1,773)
--------
Cash dividends declared $0.45 per
share of common and Class B
common.......................... (10,161) (10,161)
Purchase of treasury stock........ (21,816) (21,816)
Cancellation of treasury stock.... (117) (187,966) 188,083
Divestiture of Broadcasting
Business, net of Transaction
costs and Working Capital
Adjustment...................... 456,444 456,444
--- ---- -------- -------- ------- --------- --------
BALANCES AT DECEMBER 31, 1999....... $85 $141 $425,451 $413,676 $(4,196) $ (21,706) $813,451
=== ==== ======== ======== ======= ========= ========
</TABLE>

(Continued)
See accompanying notes to consolidated financial statements.
27
<PAGE> 28

PULITZER INC. AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK CLASS B COMMON STOCK
------------------ ---------------------
HELD IN HELD IN
ISSUED TREASURY ISSUED TREASURY
------ -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
SHARE ACTIVITY:
BALANCES AT JANUARY 1, 1997........................... 6,498 (23) 27,215 (11,701)
Issuance of common stock grants..................... 1
Common stock options exercised...................... 202
Conversion of Class B common stock to common
stock............................................ 90 (90)
Common stock issued under Employee Stock Purchase
Plan............................................. 7
Purchase of treasury stock.......................... (2)
----- ---- ------- -------
BALANCES AT DECEMBER 31, 1997......................... 6,798 (25) 27,125 (11,701)
Issuance of common stock grants..................... 1
Common stock options exercised...................... 318
Conversion of Class B common stock to common
stock............................................ 105 (105)
Common stock issued under Employee Stock Purchase
Plan............................................. 21
Purchase of treasury stock.......................... (1)
----- ---- ------- -------
BALANCES AT DECEMBER 31, 1998......................... 7,243 (26) 27,020 (11,701)
Issuance of common stock grants..................... 8
Common stock options exercised...................... 97
Conversion of Class B common stock to common
stock............................................ 1,187 (1,187)
Common stock issued under Employee Stock Purchase
Plan............................................. 5
Purchase of treasury stock.......................... (528)
Cancellation of treasury stock...................... (27) 27 (11,701) 11,701
----- ---- ------- -------
BALANCES AT DECEMBER 31, 1999......................... 8,513 (527) 14,132 --
===== ==== ======= =======
</TABLE>

(Concluded)

See accompanying notes to consolidated financial statements.
28
<PAGE> 29

PULITZER INC. AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
CONTINUING OPERATIONS
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations....................... $ 22,957 $ 27,016 $ 25,759
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation......................................... 9,785 7,959 7,175
Amortization......................................... 7,306 6,095 5,832
Deferred income taxes................................ (4,938) (1,400) (1,328)
Loss on sale of assets............................... 3,279
Changes in assets and liabilities (net of the effects
of the purchase and sale of properties) which
provided (used) cash:
Trade accounts receivable.......................... 483 (6,701) (2,692)
Inventory.......................................... (2,559) 2,743 (289)
Other assets....................................... 9,059 4,642 (3,652)
Trade accounts payable and other liabilities....... 11,810 2,217 3,120
Income taxes receivable/payable.................... (21,111) (238) 1,803
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES................. 36,071 42,333 35,728
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................................... (10,920) (15,269) (15,215)
Purchase of publishing properties, net of cash
acquired............................................. (23,055)
Sale of publishing properties........................... 3,300 2,590
Purchases of marketable securities...................... (907,636)
Sales of marketable securities.......................... 445,424
Investment in joint ventures and limited partnerships... (12,396) (3,900) (3,292)
Decrease (increase) in notes receivable................. 79 (1) 4,979
--------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES..................... (482,149) (39,635) (13,528)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid.......................................... (13,535) (13,409) (11,483)
Proceeds from exercise of stock options................. 2,281 7,185 3,299
Proceeds from employee stock purchase plan.............. 191 1,370 322
Purchase of treasury stock.............................. (21,816) (41) (76)
--------- --------- ---------
NET CASH USED IN FINANCING ACTIVITIES..................... (32,879) (4,895) (7,938)
--------- --------- ---------
CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS.......... $(478,957) $ (2,197) $ 14,262
--------- --------- ---------

(Continued)
</TABLE>

29
<PAGE> 30

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
DISCONTINUED OPERATIONS
Operating activities.................................... $ (21,206) $ 73,254 $ 57,757
Investing activities:
Capital expenditures................................. (1,488) (9,930) (12,976)
Purchase of broadcasting assets...................... (3,141)
Sale (purchase) of investment in limited
partnership........................................ 5,000 (1,000) (1,500)
Financing activities:
Proceeds from issuance of long-term debt............. 700,000
Repayments of long-term debt......................... (172,705) (12,705) (64,705)
Payment of Spin-off and Merger Transaction costs..... (31,763)
Payment of working capital adjustment related to
Merger............................................. (2,875)
--------- --------- ---------
CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS........ 474,963 49,619 (24,565)
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... (3,994) 47,422 (10,303)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR............ 110,171 62,749 73,052
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................. $ 106,177 $ 110,171 $ 62,749
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the year for:
Interest paid........................................ $ 8,429 $ 13,789 $ 17,469
Interest received.................................... (19,816) (4,898) (4,574)
Income taxes......................................... 35,550 46,653 45,110
Income tax refunds................................... (3,671) (983) (1,108)
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Divestiture of broadcasting business--decrease in Net
Liabilities of Broadcasting Business and increase in
Additional Paid-in Capital........................... 495,335
Spin-off and Merger Transaction costs--decrease in Other
Assets and decrease in Additional Paid-In Capital.... 4,253
Increase in Dividends Payable and decrease in Retained
Earnings............................................. 3,374
Cancellation of treasury stock:
Decrease in Treasury Stock and Class B Common
Stock.............................................. 117
Decrease in Treasury Stock and Additional Paid-in
Capital............................................ 187,966
</TABLE>

(Concluded)

See accompanying notes to consolidated financial statements.
30
<PAGE> 31

PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

1. BASIS OF PRESENTATION

On March 18, 1999, the spin-off of the newspaper publishing and new media
businesses formerly operated by Pulitzer Publishing Company ("Old Pulitzer") was
completed with Pulitzer Inc. (the "Company") commencing operations as an
independent publicly traded publishing and new media company (the "Spin-off").
Following the Spin-off, Old Pulitzer with its remaining broadcasting business
("Broadcasting Business") was merged with and into Hearst-Argyle Television,
Inc. ("Hearst-Argyle") in exchange for the issuance to Old Pulitzer's
stockholders of 37,096,774 shares of Hearst-Argyle's Series A common stock (the
"Merger"). The Merger and Spin-off are collectively referred to as the
"Transactions."

As a result of the Transactions, the Company is the continuing entity for
financial reporting purposes. Old Pulitzer's historical basis in its newspaper
publishing and related new media assets and liabilities has been carried over to
the Company. The distribution of the net liabilities of the Broadcasting
Business has been recorded as a capital contribution to the Company (see Notes 4
and 12). The Transactions represent a reverse-spin transaction and, accordingly,
the Company's results of operations for periods prior to the consummation of the
Transactions are identical to the historical results previously reported by Old
Pulitzer. Results of the Company's newspaper publishing and related new media
businesses are reported as continuing operations in the statements of
consolidated operations. The results of the Broadcasting Business prior to the
Merger are reported as discontinued operations (see Note 4). The defined term
"Company" is used to refer to Pulitzer Publishing Company prior to the
Transactions and Pulitzer Inc. subsequent to the Transactions.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation -- The consolidated financial statements include the
accounts of the Company and its subsidiary companies, all of which are
wholly-owned. All significant intercompany transactions have been eliminated
from the consolidated financial statements.

Fiscal Year -- The Company's fiscal year ends on the last Sunday of the
calendar year. For ease of presentation, the Company has used December 31 as the
year-end.

Cash Equivalents -- For purposes of reporting cash flows, the Company
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.

Marketable Securities -- Marketable securities consist of fixed income
securities, including but not limited to debt securities issued by the U.S.
government and related agencies, municipal securities, corporate securities and
various asset-backed securities. Marketable securities are recorded at fair
value with net unrealized gains and losses reported, net of tax, as a component
of other comprehensive income. The basis of cost used in determining realized
gains and losses is specific identification. The fair value of all securities is
determined by quoted market prices. All of the Company's marketable securities
represent "available-for-sale" securities as defined by the provisions of
Statement of Financial Accounting Standards No. 115.

Inventory Valuation -- Inventory, which consists primarily of newsprint, is
stated at the lower of cost (determined primarily using the last-in, first-out
method) or market. If the first-in, first-out cost method had been used,
inventory would have been $27,000 and $365,000 higher than reported at December
31, 1999 and 1998, respectively. Ink and other miscellaneous supplies are
expensed as purchased.

Property and Depreciation -- Property is recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
individual assets. Buildings are depreciated over 20 to 50 years and all other
property over lives ranging from 3 to 15 years.

Intangible Assets -- Intangibles consisting of goodwill, FCC licenses and
network affiliations acquired subsequent to the effective date of Accounting
Principles Board Opinion No. 17 ("Opinion No. 17") are being amortized over
lives of either 15 or 40 years while all other intangible assets are being
amortized over lives

31
<PAGE> 32
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

ranging from 4 to 23 years. In addition, the intangible asset relating to the
Company's additional minimum pension liability under Statement of Financial
Accounting Standards No. 87 is adjusted annually, as necessary, when a new
determination of the amount of the additional minimum pension liability is made.

Long-Lived Assets -- The Company considers the possible impairment of its
properties and intangible assets whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Management
periodically evaluates the recoverability of long-lived assets by reviewing the
current and projected cash flows of each of its properties. If a permanent
impairment is deemed to exist, any write-down would be charged to operations.
For the periods presented, there has been no impairment.

Employee Benefit Plans -- The Company and its subsidiaries have several
noncontributory defined benefit pension plans covering a significant portion of
their employees. Benefits under the plans are generally based on salary and
years of service. The Company's liability and related expense for benefits under
the plans are recorded over the service period of active employees based upon
annual actuarial calculations. Plan funding strategies are influenced by tax
regulations. Plan assets consist primarily of government bonds and corporate
equity securities.

The Company provides retiree medical and life insurance benefits under
varying postretirement plans at several of its operating locations. In addition,
the Company provides postemployment disability benefits to certain former
employee groups prior to retirement. The significant portion of these benefits
results from plans at the St. Louis Post-Dispatch. The Company's liability and
related expense for benefits under the postretirement plans are recorded over
the service period of active employees based upon annual actuarial calculations.
The Company accrues postemployment disability benefits when it becomes probable
that such benefits will be paid and when sufficient information exists to make
reasonable estimates of the amounts to be paid. All of the Company's
postretirement and postemployment benefits are funded on a pay-as-you-go basis.

Income Taxes -- Deferred tax assets and liabilities are recorded for the
expected future tax consequences of events that have been included in either the
financial statements or tax returns of the Company. Under this asset and
liability approach, deferred tax assets and liabilities are determined based on
temporary differences between the financial statement and tax bases of assets
and liabilities by applying enacted statutory tax rates applicable to future
years in which the differences are expected to reverse.

Stock-Based Compensation Plans -- The Company applies the provisions of
Accounting Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock
Issued to Employees, and related interpretations to account for its employee
stock option plans.

Earnings Per Share of Stock -- Basic earnings per share of stock is
computed using the weighted average number of common and Class B common shares
outstanding during the applicable period. Diluted earnings per share of stock is
computed using the weighted average number of common and Class B common shares
outstanding and common stock equivalents. (see Note 14)

Comprehensive Income -- A calculation of comprehensive income has been
included in the statement of stockholders' equity, and an accumulated balance of
other comprehensive income has been included in the equity section of the
statement of consolidated financial position, in compliance with Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income.

Segment Information -- During 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information. Prior to the Transactions (see Note 1), the
Company's operations included both a publishing and broadcasting segment. As a
result of the Transactions, the broadcasting segment has been presented as a
discontinued operation in the consolidated financial statements with detail
segment disclosures included in Note 4. Segment disclosures

32
<PAGE> 33
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

for the Company's remaining operating segment, publishing, are presented in the
consolidated financial statements as continuing operations. See additional
publishing segment disclosures included in Note 17.

Derivative Instruments and Hedging Activities -- In June 1998, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. ("SFAS") 133, Accounting for Derivative Instruments and Hedging
Activities, which after being amended by SFAS 137, is effective for fiscal years
beginning after June 15, 2000. SFAS 133 establishes accounting and reporting
standards for derivative instruments including certain derivative instruments
embedded in other contracts and hedging activities. The Company is currently in
the process of assessing the effect of this statement.

Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results may differ from those estimates.

Reclassifications -- Certain reclassifications have been made to the 1998
and 1997 consolidated financial statements to conform with the 1999
presentation.

3. AGENCY AGREEMENTS

An agency operation between the Company and The Herald Company is conducted
under the provisions of an Agency Agreement, dated March 1, 1961, as amended.
For many years, the St. Louis Post-Dispatch (published by the Company) was the
afternoon and Sunday newspaper serving St. Louis, and the Globe-Democrat
(formerly published by The Herald Company) was the morning paper and also
published a weekend edition. Although separately owned, from 1961 through
February 1984, the publication of both the Post-Dispatch and the Globe-Democrat
was governed by the St. Louis Agency Agreement. From 1961 to 1979, the two
newspapers controlled their own news, editorial, advertising, circulation,
accounting and promotion departments and Old Pulitzer managed the production and
printing of both newspapers. In 1979, Old Pulitzer assumed full responsibility
for advertising, circulation, accounting and promotion for both newspapers. In
February 1984, after a number of years of unfavorable financial results at the
St. Louis Agency, the Globe-Democrat was sold by The Herald Company and the St.
Louis Agency Agreement was revised to eliminate any continuing relationship
between the two newspapers and to permit the repositioning of the daily
Post-Dispatch as a morning newspaper. Following the renegotiation of the St.
Louis Agency Agreement at the time of the sale of the Globe-Democrat, The Herald
Company retained the contractual right to receive one-half the profits (as
defined), and the obligation to share one-half the losses (as defined), of the
operations of the St. Louis Agency, which from February 1984 forward consisted
solely of the publication of the Post-Dispatch. The St. Louis Agency Agreement
also provides for The Herald Company to share one-half the cost of, and to share
in a portion of the proceeds from the sale of, capital assets used in the
production of the Post-Dispatch. Under the St. Louis Agency Agreement, the
Company supervises, manages and performs all activities relating to the
day-to-day publication of the Post-Dispatch and is solely responsible for the
news and editorial policies of the newspaper. The consolidated financial
statements of the Company include all the operating revenues and expenses of the
St. Louis Agency relating to the Post-Dispatch.

In Tucson, Arizona, a separate partnership, TNI Partners Inc. ("TNI"),
acting as agent for the Star (a newspaper owned by the Company) and the Citizen
(a newspaper owned by Gannett Co., Inc.), is responsible for printing, delivery,
advertising, and circulation of the Star and the Citizen. TNI collects all of
the receipts and income relating to the Star and the Citizen and pays all
operating expenses incident to the partnership's operations and publication of
the newspapers. Each newspaper is solely responsible for its own news and
editorial content. Net income or net loss of TNI is generally allocated equally
to the Star and the Citizen. The Company's consolidated financial statements
include its share of TNI's revenues and expenses.
33
<PAGE> 34
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

4. DISCONTINUED OPERATIONS

Discontinued operations represent the Broadcasting Business owned by Old
Pulitzer prior to the Merger, including the allocation of all long-term debt
balances and related interest expense amounts of Old Pulitzer prior to the
Merger.

The net liability balance of the Broadcasting Business as of March 18,
1999, including the $700 million of New Debt (as defined in Note 8), was
contributed to "Additional Paid-in Capital" of the Company at the time of the
Merger (see Note 12). The net asset balance of the Broadcasting Business as of
December 31, 1998 is classified in the statement of consolidated financial
position as "Net Assets of Broadcasting Business". The asset and liability
balances of the Broadcasting Business as of March 18, 1999 (immediately prior to
the Merger) and as of December 31, 1998 are included below.

<TABLE>
<CAPTION>
MARCH 18, 1999 DECEMBER 31,
(PRIOR TO MERGER) 1998
----------------- ------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Trade accounts receivable (less allowance for doubtful
accounts of $558 and $597)................................ $ 40,819 $ 47,244
Program rights.............................................. 5,941 8,425
Other current assets........................................ 4,812 1,115
--------- --------
Total current assets...................................... 51,572 56,784
--------- --------
Properties:
Land...................................................... 10,431 10,254
Buildings................................................. 48,525 48,508
Machinery and equipment................................... 140,826 138,351
Construction in progress.................................. 854 2,177
--------- --------
Total.................................................. 200,636 199,290
Less accumulated depreciation............................. 117,792 115,776
--------- --------
Properties -- net...................................... 82,844 83,514
--------- --------
Intangible assets:
FCC Licenses and network affiliations..................... 114,403 114,403
Goodwill.................................................. 6,960 6,960
Other intangibles......................................... 42,491 42,491
--------- --------
Total.................................................. 163,854 163,854
Less accumulated amortization............................. 70,745 69,037
--------- --------
Intangible assets -- net............................... 93,109 94,817
--------- --------
Other assets................................................ 2,019 8,348
--------- --------
Total assets of Broadcasting Business.................. 229,544 243,463
--------- --------
</TABLE>

34
<PAGE> 35
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

<TABLE>
<CAPTION>
MARCH 18, 1999 DECEMBER 31,
(PRIOR TO MERGER) 1998
----------------- ------------
(IN THOUSANDS)
<S> <C> <C>
LIABILITIES
Trade accounts payable and accrued expenses................. 7,848 9,255
Current portion of long-term debt (Note 8).................. 12,705
Interest payable............................................ 5,301
Program contracts payable................................... 5,599 7,955
--------- --------
Total current liabilities................................. 13,447 35,216
Long-term debt (Note 8)..................................... 700,000 160,000
Pension obligations (Note 9)................................ 3,035 6,951
Postretirement benefit obligations (Note 10)................ 2,812 2,762
Other long term liabilities................................. 5,585 2,817
Commitments and contingencies (Note 15).....................
--------- --------
Total liabilities of Broadcasting Business................ 724,879 207,746
--------- --------
NET ASSETS (LIABILITIES) OF BROADCASTING BUSINESS........... $(495,335) $ 35,717
========= ========
</TABLE>

In connection with the Merger, the Company made a cash payment to
Hearst-Argyle in the amount of $2,875,000, representing the difference between
$41,000,000 and the working capital balance of the Broadcasting Business on the
date of the Merger ("Working Capital Adjustment"). Based upon the March 18, 1999
asset and liability balances included above, the Broadcasting Business had a
working capital balance of $38,125,000 at the time of the Merger.

35
<PAGE> 36
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

The net income/(loss) from operations of the Broadcasting Business, without
allocation of any general corporate expense, is reflected in the statements of
consolidated operations as "Income (Loss) from Discontinued Operations, Net of
Tax" and is summarized as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1999(A) 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating revenues.................................. $ 45,622 $239,746 $227,016
-------- -------- --------
Operating expenses:
Operations........................................ 15,951 72,438 69,205
Selling, general and administrative............... 11,616 51,898 52,184
Stock option cash-outs and bonuses................ 25,305
Depreciation and amortization..................... 3,881 21,048 23,447
-------- -------- --------
Total operating expenses....................... 56,753 145,384 144,836
-------- -------- --------
Operating income (loss)............................. (11,131) 94,362 82,180
Interest expense.................................... 3,128 13,503 16,081
Loss on extinguishment of debt(b)................... 17,955
-------- -------- --------
Income (loss) before income taxes................... (32,214) 80,859 66,099
Income tax provision (benefit)...................... (10,765) 31,591 25,830
-------- -------- --------
Net income (loss)................................... $(21,449) $ 49,268 $ 40,269
======== ======== ========
</TABLE>

- ---------------
(a) Broadcasting results for 1999 reflect operations only through March 18,
1999, the date of the Merger, and include approximately $25.3 million of
stock option cash-outs and bonus payments to broadcasting employees in
connection with the Merger on March 18, 1999. (see Note 13)

(b) On March 18, 1999, in connection with the Spin-off and Merger, Old Pulitzer
prepaid its existing long-term debt and incurred a prepayment penalty of
approximately $17.2 million. This prepayment penalty, along with the
write-off of deferred financing fees of approximately $750,000, has been
included in the results of discontinued operations for 1999. (see Note 8)

5. ACQUISITION OF PROPERTIES

In January 2000, the Company acquired the assets of The Pantagraph, a daily
and Sunday newspaper that serves the central Illinois cities of Bloomington and
Normal, in a $180 million purchase transaction, excluding working capital. The
Company funded the acquisition with the proceeds from the sale of a portion of
its investments in marketable securities. (see Note 6)

In October 1998, the Company acquired in a purchase transaction Troy Daily
News, Inc., the publisher of a daily afternoon and Sunday morning newspaper
located in Troy, Ohio, for approximately $20.7 million, including approximately
$700,000 of working capital. The pro forma impact of the acquisition on the
Company's results of operations was not material.

36
<PAGE> 37
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

6. MARKETABLE SECURITIES

Investments classified as available-for-sale securities at December 31,
1999 consisted of the following:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Debt securities issued by the U.S. government
and agencies............................... $314,027 $ 12 $(4,260) $309,779
Municipal securities......................... 11,352 (354) 10,998
Corporate securities......................... 69,646 62 (1,536) 68,172
Mortgage-backed securities................... 11,795 (279) 11,516
Other debt securities........................ 51,749 41 (541) 51,249
-------- ---- ------- --------
Total investments....................... $458,569 $115 $(6,970) $451,714
======== ==== ======= ========
</TABLE>

For the year ended December 31, 1999, proceeds from sales of marketable
securities were $445,424,000 resulting in gross realized gains and losses of
$850,000 and $3,041,000, respectively. In addition, a net unrealized loss of
$4,175,000, after tax, is included in other comprehensive loss for the year
ended December 31, 1999.

The contractual maturity schedule of investments classified as
available-for-sale securities at December 31, 1999 was as follows:

<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
--------- --------
(IN THOUSANDS)
<S> <C> <C>
Due in one year or less..................................... $161,440 $160,851
Due after one year through five years....................... 226,300 221,925
Due after five years through ten years...................... 13,172 12,348
Due after ten years......................................... 45,862 45,074
Not due at a single maturity date........................... 11,795 11,516
-------- --------
Total investments...................................... $458,569 $451,714
======== ========
</TABLE>

Actual maturities may differ from contractual maturities because some
borrowers have the right to call or prepay obligations without prepayment
penalties.

In January 2000, the Company sold $180,000,000 worth of its investments in
marketable securities to fund the acquisition of The Pantagraph. (see Note 5)

37
<PAGE> 38
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

7. INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Goodwill.................................................... $182,766 $186,051
Intangible pension asset (Note 9)........................... 1,096 2,006
Other....................................................... 24,314 24,995
-------- --------
Total.................................................. 208,176 213,052
Less accumulated amortization............................... 22,684 15,898
-------- --------
Total intangible assets -- net.............................. $185,492 $197,154
======== ========
</TABLE>

8. FINANCING ARRANGEMENTS

On March 17, 1999, Old Pulitzer borrowed $700 million from Chase Manhattan
Bank pursuant to a borrowing agreement (the "New Debt"). Prior to the Spin-off
and Merger, on March 18, 1999, Old Pulitzer used a portion of the proceeds from
the New Debt to prepay its existing long-term debt with The Prudential Insurance
Company of America ("Prudential"), pay a related prepayment penalty to
Prudential and pay certain transaction costs resulting from the Spin-off and
Merger. The balance of the proceeds of the New Debt, together with existing cash
balances, was contributed to the Company in the Spin-off, and the New Debt was
assumed by Hearst-Argyle at the time of the Merger. Accordingly, all long-term
debt balances and related interest expense are allocated to the Broadcasting
Business and reported as discontinued operations in the consolidated financial
statements. (see Note 4)

As a result of the Transactions, the Company has no outstanding debt as of
December 31, 1999.

Long-term debt included in "Net Assets of Broadcasting Business" in the
statements of consolidated financial position as of December 31, 1998 consisted
of Prudential senior notes totaling $172,705.

9. PENSION PLANS

The pension cost components for the Company's pension plans are as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost for benefits earned during the year............ $ 3,212 $ 4,439 $ 3,966
Interest cost on projected benefit obligation............... 7,598 8,864 8,470
Expected return on plan assets.............................. (8,715) (9,891) (8,670)
Amortization of prior service cost.......................... (18) (23) (23)
Amortization of transition obligation....................... 211 221 221
Amortization of gain........................................ (239) (376) (312)
------- ------- -------
Net periodic pension cost................................... $ 2,049 $ 3,234 $ 3,652
======= ======= =======
</TABLE>

The Company's net periodic pension cost components disclosed above for 1998
and 1997 include amounts related to Broadcasting employees who participated in
two of the Company's defined benefit pension plans prior to the Merger. No
detailed information regarding the components of net periodic pension cost and

38
<PAGE> 39
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

funded status of the plans, as it relates to Broadcasting, is available for 1998
and 1997. However, a portion of the Company's pension cost has been allocated to
Broadcasting's active employees and included in "Discontinued Operations" in the
statements of consolidated income. Pension cost allocated to Broadcasting, based
on payroll costs, amounted to approximately $1,408,000 and $1,395,000 for 1998
and 1997, respectively. As of the date of the Merger, Hearst-Argyle assumed the
ongoing liabilities related to Broadcasting's active employees. Future pension
costs for the Company and Broadcasting after the Spin-off are likely to be
different when compared to allocated historical amounts.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1999 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year..................... $144,119 $128,690
Service cost................................................ 3,212 4,439
Interest cost............................................... 7,598 8,864
Actuarial (gain)/loss....................................... (15,059) 8,638
Benefits paid............................................... (6,619) (6,512)
Reduction for Broadcasting divestiture...................... (16,629)
-------- --------
Benefit obligation at end of year........................... 116,622 144,119
-------- --------
Change in plan assets:
Fair value of plan assets at beginning of year.............. 128,806 119,354
Actual return on plan assets................................ 15,871 15,196
Employer contributions...................................... 591 768
Benefits paid............................................... (6,619) (6,512)
Reduction for Broadcasting divestiture...................... (16,388)
-------- --------
Fair value of plan assets at end of year.................... 122,261 128,806
-------- --------
Funded status--benefit obligation in excess of plan assets;
(plan assets in excess of benefit obligation)............. (5,639) 15,313
Unrecognized net actuarial gain............................. 32,041 12,847
Unrecognized prior service cost............................. 39 209
Unrecognized transition obligation.......................... (735) (1,118)
-------- --------
Net amount recognized....................................... $ 25,706 $ 27,251
======== ========
Amounts recognized in the statement of financial position
consist of:
Accrued benefit liability................................. $ 26,837 $ 30,760
Intangible asset (Note 7)................................. (1,096) (2,006)
Accumulated other comprehensive income.................... (35) (1,503)
-------- --------
Net amount recognized....................................... $ 25,706 $ 27,251
======== ========
</TABLE>

The projected benefit obligation, accumulated benefit obligation and fair
value of plan assets for the pension plans with accumulated benefit obligations
in excess of plan assets were $15,319,000, $14,546,000 and $0, respectively, at
December 31, 1999 and $16,882,000, $15,409,000 and $0, respectively, at December
31, 1998.

The portion of the Company's accrued benefit liability allocated to
Broadcasting employees and included in "Net Assets of Broadcasting Business" in
the statements of consolidated financial position amounted to $6,951,000 as of
December 31, 1998. Pursuant to the Merger Agreement, actuarial calculations were
performed to separate Broadcasting active employees from the pension plans as of
the date of the Merger. The

39
<PAGE> 40
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

pension obligations computed for Broadcasting active employees and a
proportionate share of pension plan assets were transferred to Hearst-Argyle in
1999.

The projected benefit obligation was determined using assumed discount
rates of 7.75%, 6.5% and 7% at December 31, 1999, 1998 and 1997, respectively.
The expected long-term rate of return on plan assets was 8.5% for 1999, 1998 and
1997. For those plans that pay benefits based on final compensation levels, the
actuarial assumptions for overall annual rate of increase in future salary
levels was 5% for 1999, 4% for 1998, and 4.5% for 1997.

Certain of the Company's employees participate in multi-employer retirement
plans sponsored by their respective unions. Amounts charged to operations,
representing the Company's required contributions to these plans in 1999, 1998
and 1997, were approximately $963,000, $920,000 and $844,000, respectively.

The Company also sponsors an employee savings plan under Section 401(k) of
the Internal Revenue Code. This plan covers substantially all employees.
Contributions by the Company amounted to approximately $1,687,000, $2,121,000
and $1,899,000 for 1999, 1998 and 1997, respectively. Contributions related only
to Broadcasting employees amounted to approximately $205,000, $704,000 and
$698,000 for 1999, 1998 and 1997, respectively. Pursuant to the Merger
Agreement, Broadcasting employee savings plan balances as of the date of the
Merger were transferred to an employee savings plan sponsored by Hearst-Argyle.

10. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

The net periodic postretirement benefit cost components related to
continuing operations are as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost for benefits earned during the year............ $ 1,040 $ 933 $ 839
Interest cost on projected benefit obligation............... 4,020 4,384 4,493
Amortization of prior service cost.......................... (1,287) (1,293) (1,293)
Amortization of net gain.................................... (1,131) (1,008) (1,171)
------- ------- -------
Net periodic postretirement benefit cost.................... $ 2,642 $ 3,016 $ 2,868
======= ======= =======
</TABLE>

Postretirement benefit cost for Broadcasting's active employees and certain
retirees is included in "Discontinued Operations" in the statements of
consolidated income for 1998 and 1997 in amount of $207,000 and $196,000,
respectively.

40
<PAGE> 41
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

The Company funds its postretirement benefit obligation on a pay-as-you-go
basis and, for 1999, 1998 and 1997, made payments of $4,110,000, $3,958,000 and
$4,118,000, respectively.

<TABLE>
<CAPTION>
CONTINUING OPERATIONS
DECEMBER 31,
----------------------
1999 1998
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Benefit obligation at beginning of year..................... $70,002 $64,807
Service cost................................................ 1,040 933
Interest cost............................................... 4,020 4,384
Actuarial (gain)/loss....................................... (2,729) 3,836
Benefits paid............................................... (4,110) (3,958)
------- -------
Benefit obligation at end of year........................... 68,223 70,002
------- -------
Plan assets at beginning and end of year.................... -- --
------- -------
Funded status............................................... 68,223 70,002
Unrecognized net actuarial gain............................. 11,667 10,132
Unrecognized prior service cost............................. 3,821 5,101
------- -------
Net amount recognized -- accrued benefit cost............... $83,711 $85,235
======= =======
</TABLE>

The preceding amounts related to continuing operations for the December 31,
1999 and 1998 accrued postretirement benefit cost and the 1999, 1998 and 1997
net periodic postretirement benefit expense have not been reduced for The Herald
Company's share of the respective amounts. However, pursuant to the St. Louis
Agency Agreement (see Note 3), the Company has recorded a receivable for The
Herald Company's share of the accrued postretirement benefit cost as of December
31, 1999 and 1998.

Accrued postretirement benefit cost of $2,762,000 related to broadcasting
active employees and certain retirees is included in "Net Assets of Broadcasting
Business" in the statements of consolidated financial position as of December
31, 1998. As of the date of the Merger, Hearst-Argyle assumed the postretirement
obligation and costs related to Broadcasting active employees and certain
retirees.

For 1999 and 1998 measurement purposes, health care cost trend rates of 9%,
8% and 6% were assumed for indemnity plans, PPO plans and HMO plans,
respectively. For 1999, these rates were assumed to decrease gradually to 5.5%
through the year 2010 and remain at that level thereafter. For 1998, the rates
were assumed to decrease gradually to 4.5% through the year 2010 and remain at
that level thereafter.

Administrative costs related to indemnity plans were assumed to increase at
a constant annual rate of 6% for 1999, 1998 and 1997. The assumed discount rate
used in estimating the accumulated postretirement benefit obligation was 7.75%,
6.5% and 7% for 1999, 1998 and 1997, respectively.

Assumed health care cost trend rates have a significant effect on the
amounts reported for the postretirement health care plans. A
one-percentage-point change in assumed health care cost trend rates would have
the following effects on reported amounts for 1999:

<TABLE>
<CAPTION>
CONTINUING OPERATIONS
1-PERCENTAGE-POINT
----------------------
INCREASE DECREASE
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Effect on net periodic postretirement benefit cost.......... $1,122 $(936)
Effect on postretirement benefit obligation................. 846 (686)
</TABLE>

41
<PAGE> 42
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

The Company's postemployment benefit obligation, representing certain
disability benefits at the St. Louis Post-Dispatch, was $3,191,000 and
$3,162,000 at December 31, 1999 and 1998, respectively.

11. INCOME TAXES

Provisions for income taxes (benefits) consist of the following:

<TABLE>
<CAPTION>
CONTINUING OPERATIONS DISCONTINUED OPERATIONS
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
----------------------------- -----------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- -------- ------- -------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Current:
Federal............................ $20,647 $19,152 $17,841 $(12,083) $26,736 $23,548
State and local.................... 2,564 2,303 2,714 113 5,119 4,321
Deferred:
Federal............................ (4,006) (1,250) (1,155) 1,216 (222) (1,723)
State and local.................... (497) (150) (173) (11) (42) (316)
------- ------- ------- -------- ------- -------
Total........................... $18,708 $20,055 $19,227 $(10,765) $31,591 $25,830
======= ======= ======= ======== ======= =======
</TABLE>

Factors causing effective tax rates to differ from the statutory Federal
income tax rate were:

<TABLE>
<CAPTION>
CONTINUING OPERATIONS DISCONTINUED OPERATIONS
YEARS ENDED YEARS ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1999 1998 1997 1999 1998 1997
----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Statutory rate.................................... 35% 35% 35% (35)% 35% 35%
Amortization of intangibles....................... 4 3 3
Sale of newspaper property -- book basis goodwill
in excess of tax basis.......................... 3
State and local income taxes, net of U.S. Federal
income tax benefit.............................. 4 3 4 4 4
Other-net......................................... (1) 2 1 2
-- -- -- --- -- --
Total................................... 45% 43% 43% (33)% 39% 39%
== == == === == ==
</TABLE>

42
<PAGE> 43
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

The Company's deferred tax assets and liabilities, net, which have been
included in other assets in the statements of consolidated financial position,
consisted of the following:

<TABLE>
<CAPTION>
CONTINUING OPERATIONS
DECEMBER 31,
---------------------- DISCONTINUED OPERATIONS
1999 1998 DECEMBER 31, 1998
--------- --------- -----------------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax assets:
Pensions and employee benefits.................. $13,419 $ 9,364 $ 3,650
Postretirement benefit costs.................... 17,757 18,062 1,080
Other........................................... 3,523 1,087
------- ------- -------
Total................................... 34,699 28,513 4,730
------- ------- -------
Deferred tax liabilities:
Depreciation.................................... 13,350 14,007 5,760
Amortization.................................... 6,595 7,371 335
Other........................................... 344
Total................................... 19,945 21,378 6,439
------- ------- -------
Net deferred tax asset (liability)................ $14,754 $ 7,135 $(1,709)
======= ======= =======
</TABLE>

The Company had no valuation allowance for deferred tax assets as of
December 31, 1999, 1998 and 1997.

12. STOCKHOLDERS' EQUITY

On March 18, 1999, all common and Class B common shares of treasury stock
held by Old Pulitzer were canceled. The cancellation of the treasury shares
reduced the number of shares of common and Class B common stock issued but did
not change the number of shares of common and Class B common stock outstanding.
In addition, the cancellation did not change the total balance of stockholders'
equity. Immediately following the Spin-off, on March 18, 1999, the number of
shares of common and Class B common stock of the Company outstanding was
identical to the number of shares of common and Class B common stock of Old
Pulitzer outstanding immediately prior to the Spin-off.

The net liability balance of the Broadcasting Business as of March 18,
1999, including the $700 million of New Debt, was contributed to "Additional
Paid-in Capital" of the Company at the time of the Merger (see Notes 4 and 8).
This capital contribution has been recorded net of Transaction costs of
approximately $36 million and the Working Capital Adjustment of approximately
$2.9 million related to the Merger.

Each share of the Company's common stock is entitled to one vote and each
share of Class B common stock is entitled to ten votes on all matters. Holders
of outstanding shares of Pulitzer Inc. Class B common stock representing 94.7%
of the combined voting power of the Company have deposited their shares in a
voting trust (the "Voting Trust"). Each share of the Company's Class B common
stock is convertible into one share of the Company's common stock at the
holder's option subject to the limitations imposed by the Voting Trust on the
shares of Class B common stock deposited thereunder. The Voting Trust permits
the conversion of the Class B common stock deposited in the Voting Trust into
common stock in connection with certain permitted transfers, including, without
limitation, sales which are exempt from the registration requirements of the
Securities Act of 1933, as amended, sales which meet the volume and manner of
sale requirements of Rule 144 promulgated thereunder and sales which are made
pursuant to registered public offerings.

43
<PAGE> 44
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

The trustees generally hold all voting rights with respect to the shares of
Class B common stock subject to the Voting Trust; however, in connection with
certain matters, including any proposal for a merger, consolidation,
recapitalization or dissolution of the Company or disposition of all or
substantially all its assets, the calling of a special meeting of stockholders
and the removal of directors, the Trustees may not vote the shares deposited in
the Voting Trust except in accordance with written instructions from the holders
of the Voting Trust Certificates. The Voting Trust may be terminated with the
written consent of holders of two-thirds in interest of all outstanding Voting
Trust Certificates. Unless extended or terminated by the parties thereto, the
Voting Trust expires on March 18, 2009.

In 1999, the Company declared and paid cash dividends of $0.45 per share of
common stock and Class B common stock. In 1998, the Company declared cash
dividends of $0.75 per share of common stock and Class B common stock including
a cash dividend of $0.15 per share of common stock and Class B common stock
which was declared in December 1998 and paid to stockholders in January 1999.
The dividend declared in December represented the acceleration of the Company's
dividend historically declared in the first quarter of each fiscal year.

13. COMMON STOCK PLANS

Since 1986, Old Pulitzer maintained employee stock option plans ("Prior
Option Plans") that provided for the issuance of incentive stock options to key
employees and outside directors. On March 18, 1999, immediately prior to the
Transactions and pursuant to the Merger Agreement, the Company redeemed all
outstanding stock options, whether or not vested, and terminated the Prior
Option Plans. The Company redeemed the stock options at a cash-out value
("Cash-Out Value") equal to the difference between the option exercise price and
the average daily closing price of Old Pulitzer common stock for the 10 trading
days ending on March 16, 1999. The total Cash-Out Value amounted to
approximately $35.2 million and included $1.2 million recorded as deferred
compensation in other long-term liabilities of the Company. In addition to the
stock option cash-outs, bonus payments due as a result of the Spin-off and
Merger were also expensed in 1999. Total stock option cash-out and bonus expense
of approximately $52 million has been recorded in 1999, including approximately
$26.7 million related to publishing employees recorded in continuing operations
and approximately $25.3 million related to broadcasting employees recorded in
discontinued operations.

On May 12, 1999, the Company's stockholders approved the adoption of the
Pulitzer Inc. 1999 Stock Option Plan (the "Option Plan"). The Option Plan
provides for the issuance of stock options to key employees and outside
directors for the purchase of up to a maximum of 3,000,000 shares of common
stock. Under the Option Plan, options to purchase 3,000 shares of common stock
will be automatically granted to each non-employee director on the day following
each annual meeting of the Company's stockholders and will vest on the date of
the next annual meeting of the Company's stockholders. Total shares available
for issue to outside directors under this automatic grant feature are limited to
a maximum of 200,000. The issuance of all other options will be administered by
a committee of the Board of Directors, subject to the Option Plan's terms and
conditions. Specifically, for incentive stock option grants, the exercise price
per share may not be less than the fair market value of a share of common stock
at the date of grant. In addition, exercise periods may not exceed ten years and
the minimum vesting period is established at six months from the date of grant.
Option awards to an individual employee may not exceed 200,000 shares in a
calendar year. In general, employee option grants provide for an exercise term
of ten years from the date of grant and vest in equal installments over a
three-year period.

44
<PAGE> 45
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

Transactions under the Option Plan and Prior Option Plans are summarized as
follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
SHARES PRICE RANGE PRICE
--------- ------------- --------
<S> <C> <C> <C>
Common Stock Options:
Outstanding, January 1, 1997......................... 1,230,855 $ 9.27-$46.25 $24.11
Granted (weighted average value at grant date of
$20.23)......................................... 211,231 $45.63-$58.81 $58.41
Canceled........................................... (14,235) $21.53-$47.38 $38.91
Exercised.......................................... (201,920) $ 9.27-$46.25 $16.34
---------
Outstanding, December 31, 1997....................... 1,225,931 $ 9.27-$58.81 $31.13
Granted (weighted average value at grant date of
$38.78)......................................... 5,001 $88.28 $88.28
Canceled........................................... (3,813) $21.53-$58.81 $46.64
Exercised.......................................... (317,511) $ 9.27-$58.81 $22.63
---------
Outstanding, December 31, 1998....................... 909,608 $ 9.27-$88.28 $34.34
Granted (weighted average value at grant date of
$6.98).......................................... 1,014,559 $39.69-$46.31 $40.03
Canceled........................................... (8,265) $18.55-$88.28 $69.84
Canceled and cashed-out............................ (806,040) $ 9.27-$58.81 $35.27
Exercised.......................................... (96,553) $ 9.27-$58.81 $23.63
---------
Outstanding, December 31, 1999....................... 1,013,309 $39.69-$46.31 $40.03
---------
Shares Available for Grant at December 31, 1999...... 1,986,691
=========
</TABLE>

Since 1986, the Old Pulitzer maintained restricted stock purchase plans
("Prior Stock Plans") that provided for the awarding to employees of a grant or
right to purchase at a particular price shares of common stock, subject to
restrictions on transferability. As of February 16, 1999, in anticipation of the
Transactions, the Compensation Committee of Old Pulitzer's Board of Directors
approved the immediate vesting of all outstanding, unvested shares of restricted
stock previously awarded under the Prior Stock Plans. On March 17, 1999,
immediately prior to the Transactions, the Prior Stock Plans were terminated.

On May 12, 1999, the Company's stockholders approved the adoption of the
Pulitzer Inc. Key Employees' Restricted Stock Purchase Plan (the "Restricted
Plan"). The Restricted Plan provides that an employee may receive, at the
discretion of a committee of the Board of Directors, a grant or right to
purchase at a particular price, shares of common stock subject to restrictions
on transferability. A maximum of 500,000 shares of common stock may be granted
and purchased by employees under the Restricted Plan. Compensation expense equal
to the fair market value of common stock awards on the date of grant is

45
<PAGE> 46
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

recognized over the vesting period of the grants. Transactions under the
Restricted Plan and Prior Stock Plans are summarized as follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
SHARES PRICE RANGE PRICE
------- ------------- --------
<S> <C> <C> <C>
Common Stock Grants:
Outstanding, January 1, 1997........................... 5,885 $20.25-$36.70 $27.78
Granted.............................................. 1,468 $47.44 $47.44
Canceled............................................. (1,393) $20.25-$47.44 $33.13
Vested............................................... (2,272) $20.25-$36.70 $25.56
-------
Outstanding, December 31, 1997......................... 3,688 $21.38-$47.44 $34.95
Granted.............................................. 1,184 $57.84 $57.84
Vested............................................... (1,594) $21.38-$47.44 $30.66
-------
Outstanding, December 31, 1998......................... 3,278 $24.53-$57.84 $45.31
Granted.............................................. 8,341 $39.88-$41.88 $40.43
Canceled............................................. (171) $41.88 $41.88
Vested............................................... (3,278) $24.53-$57.84 $45.31
Outstanding, December 31, 1999......................... 8,170 $39.88-$41.88 $40.40
=======
Shares Available for Grant at December 31, 1999...... 491,830
=======
</TABLE>

As required by SFAS 123, the Company has estimated the fair value of its
option grants since December 31, 1994 by using the binomial options pricing
model with the following assumptions:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Expected life (years)....................................... 7 7 7
Risk-free interest rate..................................... 5.8% 5.7% 5.8%
Volatility.................................................. 28.2% 35.4% 23.6%
Dividend yield.............................................. 1.4% 1.0% 1.1%
</TABLE>

As discussed in Note 2, the Company applies the provisions of APB 25 to
account for its stock option plans. If compensation expense for the Company was
determined on the estimated fair value of the options granted consistent with
Statement of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation, the Company's net income and earnings per share would have been as
follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
--------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Pro forma net income (loss)................................. $(1,119) $73,441 $64,487
Pro forma earnings per share:
Basic..................................................... $ (0.05) $ 3.28 $ 2.92
Diluted................................................... $ (0.05) $ 3.23 $ 2.87
</TABLE>

On May 12, 1999, the Company's stockholders approved the adoption of the
Pulitzer Inc. 1999 Employee Stock Purchase Plan (the "Purchase Plan"). The
Purchase Plan allows eligible employees to authorize payroll deductions for the
periodic purchase of the Company's common stock at a price generally equal to 85
percent

46
<PAGE> 47
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

of the common stock's then fair market value. In general, all employees of the
Company and its subsidiaries are eligible to participate in the Purchase Plan
after completing at least one year of service. Subject to appropriate adjustment
for stock splits and other capital changes, the Company may sell a total of
300,000 shares of its common stock under the Purchase Plan. Shares sold under
the Purchase Plan may be either authorized and unissued or held by the Company
in its treasury. The Purchase Plan began operations as of July 1, 1999.

14. EARNINGS PER SHARE

Weighted average shares of common and Class B common stock and common stock
equivalents used in the calculation of basic and diluted earnings per share are
summarized as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1999 1998 1997
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Weighted average shares outstanding (Basic EPS)............. 22,578 22,381 22,110
Stock option equivalents.................................... 23 372 342
------ ------ ------
Weighted average shares and equivalents (Diluted EPS)....... 22,601 22,753 22,452
====== ====== ======
</TABLE>

Stock option equivalents included in the Diluted EPS calculation were
determined using the treasury stock method. Under the treasury stock method and
Statement of Financial Accounting Standards No. 128, Earnings per Share,
outstanding stock options are dilutive when the average market price of the
Company's common stock exceeds the option price during a period. In addition,
proceeds from the assumed exercise of dilutive options along with the related
tax benefit are assumed to be used to repurchase common shares at the average
market price of such stock during the period.

15. COMMITMENTS AND CONTINGENCIES

At December 31, 1999, the Company and its subsidiaries had construction and
equipment commitments of approximately $4,299,000.

The Company is an investor in one limited partnership requiring future
capital contributions. As of December 31, 1999, the Company's unfunded capital
contribution commitment related to this investment was approximately $2,116,000.

The Company and its subsidiaries are involved, from time to time, in
various claims and lawsuits incidental to the ordinary course of its business,
including such matters as libel, slander and defamation actions and complaints
alleging discrimination. While the results of litigation cannot be predicted,
management believes the ultimate outcome of any existing litigation will not
have a material adverse effect on the consolidated financial statements of the
Company and its subsidiaries.

In connection with the September 1986 purchase of the Company's Class B
common stock from certain selling stockholders (the "1986 Selling
Stockholders"), the Company agreed, under certain circumstances, to make an
additional payment to the 1986 Selling Stockholders in the event of a Gross-Up
Transaction. A "Gross-Up Transaction" was defined to mean, among other
transactions, (i) any merger, in any transaction or series of related
transactions, of more than 85 percent of the voting securities or equity of Old
Pulitzer pursuant to which holders of Old Pulitzer common stock receive
securities other than Old Pulitzer common stock and (ii) any recapitalization,
dividend or distribution, or series of related recapitalizations, dividends or
distributions, in which holders of Old Pulitzer common stock receive securities
(other than Old Pulitzer common stock) having a Fair Market Value (as defined
herein) of not less than 33 1/3 percent of the Fair Market Value of the shares
of Old Pulitzer common stock immediately prior to such transaction. The amount

47
<PAGE> 48
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

of the additional payment, if any, would equal (x) the product of (i) the amount
by which the Transaction Proceeds (as defined herein) exceeds the Imputed Value
(as defined herein) multiplied by (ii) the applicable percentage (i.e., 50
percent for the period from May 13, 1996 through May 12, 2001) multiplied by
(iii) the number of shares of Old Pulitzer common stock issuable upon conversion
of the shares of Class B common stock owned by the 1986 Selling Stockholders,
adjusted for, among other things, stock dividends and stock splits; less (y) the
sum of any additional payments previously received by the 1986 Selling
Stockholders; provided, however, that in the event of any recapitalization,
dividend or distribution, the amount by which the Transaction Proceeds exceeds
the Imputed Value shall not exceed the amount paid or distributed pursuant to
such recapitalization, dividend or distribution in respect of one share of Old
Pulitzer common stock.

"Fair Market Value," in the case of any consideration other than cash
received in a Gross-Up Transaction, was defined to mean the fair market value
thereof as agreed to by a valuation firm selected by the Company and a valuation
firm selected by the 1986 Selling Stockholders, or, if the two valuation firms
do not agree on the fair market value, the fair market value of such
consideration as determined by a third valuation firm chosen by the two
previously selected valuation firms. Any such agreement or determination shall
be final and binding on the parties.

As a result of the foregoing, the amount of additional payments, if any,
which may be payable by the Company with respect to the Merger and the
distribution of the Company's common stock and Class B common stock in the
Spin-off (the "Distribution") cannot be determined at this time. However, if the
Distribution were determined to be a Gross-Up Transaction and if the Fair Market
Value of the Transaction Proceeds with respect to the Merger and the
Distribution were determined to exceed the Imputed Value, then the additional
payments to the 1986 Selling Stockholders would equal approximately $5.9 million
for each $1.00 by which the Transaction Proceeds exceed the Imputed Value.
Accordingly, depending on the ultimate resolution of the meaning and application
of various provisions of the Gross-Up Transaction agreements, including the
determination of Imputed Value and Fair Market Value of the Transaction
Proceeds, in the opinion of the Company's management, the amount of an
additional payment, if any, could be material to the consolidated financial
statements of the Company.

16. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has estimated the following fair value amounts for its
financial instruments using available market information and appropriate
valuation methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts
that the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies may have a material
effect on the estimated fair value amounts.

48
<PAGE> 49
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

Cash and Cash Equivalents, Marketable Securities, Accounts Receivable,
Accounts Payable and Program Contracts Payable -- The carrying amounts of these
items are a reasonable estimate of their fair value.

Long-Term Debt -- Interest rates that are currently available to the
Company for issuance of debt with similar terms and remaining maturities are
used to estimate fair value. The fair value estimate of the Company's long-term
debt as of December 31, 1998 was $180,000,000.

The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1999 and 1998. Although
management is not aware of any facts that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date, and current
estimates of fair value may differ from the amounts presented herein.

17. NEWSPAPER PUBLISHING REVENUES

The Company's newspaper publishing revenues consist of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
St. Louis Post-Dispatch..................................... $252,402 $242,940 $234,255
Star Publishing Company..................................... 57,213 55,181 53,037
Pulitzer Community Newspaper Group.......................... 79,719 73,067 69,670
Other publishing revenue.................................... 2,049 1,736 1,007
-------- -------- --------
Total publishing revenue.................................. $391,383 $372,924 $357,969
======== ======== ========
</TABLE>

49
<PAGE> 50
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

18. QUARTERLY FINANCIAL DATA (UNAUDITED)

Operating results for the years ended December 31, 1999 and 1998 by
quarters are as follows:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<S> <C> <C> <C> <C> <C>
1999
OPERATING REVENUES -- NET................... $ 94,357 $98,694 $96,307 $102,025 $391,383
INCOME (LOSS) FROM CONTINUING OPERATIONS.... (8,516) 9,692 10,153 11,628 22,957
(LOSS) FROM DISCONTINUED OPERATIONS......... (21,449) (21,449)
NET INCOME.................................. (29,965) 9,692 10,153 11,628 1,508
BASIC EARNINGS PER SHARE OF STOCK (Note 14):
Continuing operations..................... $ (0.38) $ 0.43 $ 0.45 $ 0.52 $ 1.02
Discontinued operations................... (0.95) (0.95)
-------- ------- ------- -------- --------
Earnings per share........................ $ (1.33) $ 0.43 $ 0.45 $ 0.52 $ 0.07
======== ======= ======= ======== ========
Weighted average shares outstanding....... 22,604 22,647 22,638 22,423 22,578
======== ======= ======= ======== ========
DILUTED EARNINGS PER SHARE OF STOCK
(Note 14):
Continuing operations..................... $ (0.38) $ 0.43 $ 0.45 $ 0.52 $ 1.02
Discontinued operations................... (0.95) (0.95)
-------- ------- ------- -------- --------
Earnings Per Share........................ $ (1.33) $ 0.43 $ 0.45 $ 0.52 $ 0.07
======== ======= ======= ======== ========
Weighted Average Shares Outstanding....... 22,604 22,667 22,675 22,458 22,601
======== ======= ======= ======== ========
</TABLE>

50
<PAGE> 51
PULITZER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- --------
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<S> <C> <C> <C> <C> <C>
1998
OPERATING REVENUES -- NET..................... $90,229 $94,215 $90,763 $97,717 $372,924
INCOME FROM CONTINUING OPERATIONS............. 5,771 6,908 6,597 7,740 27,016
INCOME FROM DISCONTINUED OPERATIONS........... 8,194 15,793 8,810 16,471 49,268
NET INCOME.................................... 13,965 22,701 15,407 24,211 76,284
BASIC EARNINGS PER SHARE OF STOCK (Note 14):
Continuing operations....................... $ 0.26 $ 0.31 $ 0.30 $ 0.35 $ 1.21
Discontinued operations..................... 0.37 0.71 0.39 0.73 2.20
------- ------- ------- ------- --------
Earnings Per Share.......................... $ 0.63 $ 1.02 $ 0.69 $ 1.08 $ 3.41
======= ======= ======= ======= ========
Weighted Average Shares Outstanding......... 22,223 22,344 22,449 22,499 22,381
======= ======= ======= ======= ========
DILUTED EARNINGS PER SHARE OF STOCK (Note 14):
Continuing operations....................... $ 0.26 $ 0.30 $ 0.29 $ 0.34 $ 1.19
Discontinued operations..................... 0.36 0.70 0.39 0.72 2.16
------- ------- ------- ------- --------
Earnings Per Share.......................... $ 0.62 $ 1.00 $ 0.68 $ 1.06 $ 3.35
======= ======= ======= ======= ========
Weighted Average Shares Outstanding......... 22,615 22,756 22,806 22,823 22,753
======= ======= ======= ======= ========
</TABLE>

Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share may not equal
the total for the year.

* * * * * *

51
<PAGE> 52

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
PULITZER INC.:

We have audited the consolidated financial statements of Pulitzer Inc. and
its subsidiaries as of December 31, 1999 and 1998, and for each of the three
years in the period ended December 31, 1999, and have issued our report thereon
dated February 4, 2000; such report is included elsewhere in this Form 10-K. Our
audits also included the consolidated financial statement schedule of Pulitzer
Inc. and its subsidiaries, listed in the accompanying index at Item 14(a)2.(ii).
This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, such consolidated financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Saint Louis, Missouri
February 4, 2000

52
<PAGE> 53

SCHEDULE II

PULITZER INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION & QUALIFYING ACCOUNTS & RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 & 1997

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS & OTHER AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
----------- ---------- ---------- ---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Valuation Accounts:
Allowance for Doubtful Accounts
Continuing Operations............... $1,723 $2,840 $119(a) $2,320(b) $2,362
Discontinued Operations............. 597 365 82(a) 1,044(b)(e) --
Reserves:
Accrued Medical Plan --
Continuing Operations............... 1,077 4,762 4,533(c) 1,306
Workers Compensation
Continuing Operations............... 883 1,065 424(d) 1,524
Discontinued Operations............. 317 144 461(d) --
YEAR ENDED DECEMBER 31, 1998
Valuation Accounts:
Allowance for Doubtful Accounts
Continuing Operations............... $1,626 $2,181 $ 82(a) $2,166(b) $1,723
Discontinued Operations............. 785 211 187(a) 586(b) 597
Reserves:
Accrued Medical Plan --
Continuing Operations............... 1,043 4,719 4,685(c) 1,077
Workers Compensation
Continuing Operations............... 1,089 796 1,002 883
Discontinued Operations............. 868 314 865 317
YEAR ENDED DECEMBER 31, 1997
Valuation Accounts:
Allowance for Doubtful Accounts
Continuing Operations............... $1,585 $1,151 $ --(a) $1,110(b) $1,626
Discontinued Operations............. 991 317 178(a) 701(b) 785
Reserves:
Accrued Medical Plan --
Continuing Operations............... 389 4,714 -- 4,060(c) 1,043
Workers Compensation
Continuing Operations............... 1,085 887 -- 883 1,089
Discontinued Operations............. 1,041 312 -- 485 868
</TABLE>

- ---------------
(a) Accounts reinstated, cash recoveries, etc.

(b) Accounts written off

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Claims paid...................................... $3,889 $4,118 $3,596
Service fees..................................... 662 575 473
Cash refunds..................................... (18) (8) (9)
------ ------ ------
$4,533 $4,685 $4,060
====== ====== ======
</TABLE>

(d) Amount includes transfer of liability to Pulitzer, Inc.

(e) Amount includes a reduction of approximately $558,000 due to the Spin-off of
Broadcast operations.

53
<PAGE> 54

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information set forth under the caption "Management" in the Company's
definitive Proxy Statement to be used in connection with the 2000 Annual Meeting
of Stockholders is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information set forth under the caption "Executive Compensation" in the
Company's definitive Proxy Statement to be used in connection with the 2000
Annual Meeting of Stockholders is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information set forth under the caption "Principal Stockholders" in the
Company's definitive Proxy Statement to be used in connection with the 2000
Annual Meeting of Stockholders is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth under the caption "Compensation Committee
Interlocks and Insider Participation" in the Company's definitive Proxy
Statement to be used in connection with the 2000 Annual Meeting of Stockholders
is incorporated herein by reference.

54
<PAGE> 55

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) DOCUMENT LIST

1. Financial Statements

The following financial statements are set forth in Part II, Item 8 of
this report.

PULITZER INC. AND SUBSIDIARIES:

(i) Independent Auditors' Report.

(ii) Statements of Consolidated Income for each of the Three Years in
the Period Ended December 31, 1999.

(iii) Statements of Consolidated Financial Position at December 31, 1999
and 1998.

(iv) Statements of Consolidated Stockholders' Equity for each of the
Three Years in the Period Ended December 31, 1999.

(v) Statements of Consolidated Cash Flows for each of the Three Years in
the Period Ended December 31, 1999.

(vi) Notes to Consolidated Financial Statements for the Three Years in
the Period Ended December 31, 1999.

2. Supplementary Data and Financial Statement Schedules

(i) Supplementary unaudited data with respect to quarterly results of
operations is set forth in Part II, Item 8 of this Annual Report.

(ii) Financial Statement Schedule II - Valuation and Qualifying Accounts
and Reserves and opinion thereon are set forth in Part II, Item 8
of this Annual Report.

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and, therefore have
been omitted.

3. Exhibits Required by Securities and Exchange Commission Regulation S-K

(a) The following exhibits are filed as part of this Annual Report:

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <C> <S>
10.33 -- Employment and Consulting Agreement, dated as of June 1,
1999, between Pulitzer Inc. and Michael E. Pulitzer.
10.34 -- Employment Agreement, dated as of June 1, 1999, between
Pulitzer Inc. and Ronald H. Ridgway.
10.35 -- Split Dollar Life Insurance Agreement, dated as of June 16,
1999, by and among Pulitzer Inc. and James E. Elkins and
Diana K. Walsh.
10.36 -- Split Dollar Life Insurance Agreement, dated as of June 24,
1999, by and among Pulitzer Inc. and Tansy K. Ridgway and
Brian H. Ridgway.
10.37 -- Asset Purchase Agreement, as of October 4, 1999, by and
between The Chronicle Publishing Company and Pulitzer Inc.
21 -- Subsidiaries of Registrant
24 -- Power of Attorney
27 -- Financial Data Schedule
</TABLE>

55
<PAGE> 56

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S>
(b) The following exhibits are incorporated herein by reference:
3.1 -- Restated Certificate of Incorporation of Pulitzer
Inc.(viii)
3.2 -- Amended and Restated By-laws of Pulitzer Inc.(viii)
4.1 -- Form of Pulitzer Inc. Common Stock Certificate.(viii)
9.1 -- Pulitzer Inc. Voting Trust Agreement, dated as of March
18, 1999, between the holders of voting trust
certificates and Michael E. Pulitzer, Emily Rauh
Pulitzer, Ronald H. Ridgway, Cole C. Campbell, David E.
Moore and Robert C. Woodworth.(ix)
10.1 -- Agreement, dated March 1, 1961, effective January 1,
1961, between The Pulitzer Publishing Company, a Missouri
corporation, and the Globe-Democrat Publishing Company,
as amended on September 4, 1975, April 12, 1979 and
December 22, 1983.(viii)
10.2.1 -- Amended and Restated Joint Operating Agreement, dated
December 22, 1988, between Star Publishing Company and
Citizen Publishing Company.(viii)
10.2.2 -- Partnership Agreement, dated December 22, 1988, between
Star Publishing Company and Citizen Publishing
Company.(viii)
10.3 -- Agreement, dated as of May 12, 1986, among The Pulitzer
Publishing Company, Clement C. Moore, II, Gordon C. Weir,
William E. Weir, James R. Weir, Kenward G. Elmslie,
Stephen E. Nash and Manufacturers Hanover Trust Company,
as Trustees, and Christopher Mayer.(viii)
10.4 -- Letter Agreement, dated September 29, 1986, among The
Pulitzer Publishing Company, Trust Under Agreement Made
by David E. Moore, Frederick D. Pulitzer, Michael E.
Pulitzer, Jr., Robert S Pulitzer, Joseph Pulitzer, IV,
Joseph Pulitzer, Jr., Michael E. Pulitzer, Stephen E.
Nash and Manufacturers Hanover Trust Company, as
Trustees, Kenward G. Elmslie, Gordon C. Weir, William E.
Weir, James R. Weir, Peter W. Quesada, T. Ricardo
Quesada, Elinor P. Hempelmann, The Moore Foundation,
Inc., Mariemont Corporation, Z Press Inc. and Clement C.
Moore, II.(viii)
10.5 -- Letter Agreement, dated May 12, 1986, among The Pulitzer
Publishing Company, Peter W. Quesada, T. Ricardo Quesada,
Kate Davis Pulitzer Quesada and Elinor P.
Hempelmann.(viii)
10.6 -- Agreement, dated as of September 29, 1986, among The
Pulitzer Publishing Company, Peter W. Quesada, T. Ricardo
Quesada, Kate Davis Pulitzer Quesada and Elinor
Hempelmann.(viii)
10.7.1 -- Amendment, dated March 9, 1992, to the Pulitzer
Publishing Company Annual Incentive Compensation
Plan.(viii)
10.7.2 -- The Pulitzer Publishing Company Annual Incentive
Compensation Plan.(viii)
10.7.3 -- Pulitzer Publishing Company Newspaper Operations Annual
Incentive Plan.(viii)
10.8.1 -- Amendment, dated September 16, 1997, to Pulitzer
Retirement Savings Plan.(v)
10.8.2 -- Amendment, dated January 28, 1997, to Pulitzer Retirement
Savings Plan.(iv)
10.8.3 -- Amendment, dated October 30, 1996, to Pulitzer Retirement
Savings Plan.(iv)
10.8.4 -- Amendment, dated July 31, 1996, to Pulitzer Retirement
Savings Plan.(iv)
10.8.5 -- Amendment, dated October 25, 1995, to Pulitzer Retirement
Savings Plan.(iv)
10.8.6 -- Amendment, dated October 25, 1995, to Pulitzer Retirement
Savings Plan.(ii)
10.8.7 -- Amendment, dated January 24, 1995, to Pulitzer Retirement
Savings Plan.(i)
10.8.8 -- Amended and Restated Pulitzer Retirement Savings Plan.(i)
10.9.1 -- Amendment, dated October 25, 1995, to Pulitzer Publishing
Company Pension Plan.(iv)
10.9.2 -- Amended and Restated Pulitzer Publishing Company Pension
Plan.(i)
</TABLE>

56
<PAGE> 57

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S>
10.10.1 -- Amendment, dated October 29, 1997, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension
Plan.(viii)
10.10.2 -- Amendment, dated June 23, 1992, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension
Plan.(viii)
10.10.3 -- Amendment, dated January 1, 1992, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension
Plan.(viii)
10.10.4 -- Amendment, dated January 18, 1990, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension
Plan.(viii)
10.10.5 -- Amendment, dated October 26, 1989, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension
Plan.(viii)
10.10.6 -- Amendment, dated November 6, 1987, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension
Plan.(viii)
10.10.7 -- Pulitzer Publishing Company Supplemental Executive
Benefit Pension Plan dated March 18, 1986.(viii)
10.11 -- Employment Agreement, dated October 1, 1986, between the
Pulitzer Publishing Company and Joseph Pulitzer,
Jr.(viii)
10.12 -- Pulitzer Publishing Company Senior Executive Deferred
Compensation Plan.(ii)
10.13 -- Stock Purchase Agreement by and among Pulitzer Publishing
Company and Mr. Edward W. Scripps, Mrs. Betty Knight
Scripps, and the Edward W. Scripps and Betty Knight
Scripps Charitable Remainder Unitrust dated as of May 4,
1996.(iii)
10.14 -- Split Dollar Life Insurance Agreement, dated December 27,
1996, between Pulitzer Publishing Company and Richard A.
Palmer, Trustee of the Michael E. Pulitzer 1996 Life
Insurance Trust.(iv)
10.15 -- Split Dollar Life Insurance Agreement, dated December 30,
1996, between Pulitzer Publishing Company and Rebecca H.
Penniman and Nicholas G. Penniman V, Trustees of the
Nicholas G. Penniman IV Irrevocable 1996 Trust.(iv)
10.16 -- Amended and Restated Agreement and Plan of Merger by and
among Pulitzer Publishing Company, Pulitzer Inc. and
Hearst-Argyle Television, Inc., dated as of May 25,
1998.(vi)
10.17 -- Contribution and Assumption Agreements, dated as of March
18, 1999 by and between Pulitzer Publishing Company and
Pulitzer Inc.(ix)
10.18 -- Letter Agreement, dated May 25, 1998, by and among
Pulitzer Publishing Company, Pulitzer Inc. and
Hearst-Argyle Television, Inc.(viii)
10.19 -- Letter Agreement, dated March 18, 1999, between Pulitzer
Inc. and Emily Rauh Pulitzer.(ix)
10.20 -- Letter Agreement, dated March 18, 1999, between Pulitzer
Inc. and David E. Moore.(ix)
10.21 -- Pulitzer Inc. Registration Rights Agreement.(ix)
10.22 -- Pulitzer Inc. 1999 Key Employees' Restricted Stock
Purchase Plan.(viii)
10.23 -- Pulitzer Inc. 1999 Stock Option Plan.(viii)
10.24 -- Pulitzer Inc. 1999 Employee Stock Purchase Plan.(viii)
10.25 -- Employment Agreement, dated December 18, 1998, between
Pulitzer Inc. and Robert C. Woodworth.(vii)
10.26 -- Employment Agreement, dated August 26, 1998 between
Pulitzer Inc. and Terrance C.Z. Egger.(viii)
10.27 -- Participation Agreement, dated May 25, 1998, by and
between Pulitzer Publishing Company and Michael E.
Pulitzer.(viii)
</TABLE>

57
<PAGE> 58

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S>
10.28 -- Participation Agreement, dated May 25, 1998, by and
between Pulitzer Publishing Company and Ken J.
Elkins.(viii)
10.29 -- Participation Agreement, dated May 25, 1998, by and
between Pulitzer Publishing Company and Nicholas G.
Penniman IV.(viii)
10.30 -- Participation Agreement, dated May 25, 1998, by and
between Pulitzer Publishing Company and Ronald H.
Ridgway.(viii)
10.31 -- Participation and Severance Agreement, dated May 25,
1998, by and between Pulitzer Publishing Company and C.
Wayne Godsey.(viii)
10.32 -- Participation and Severance Agreement, dated May 25,
1998, by and between Pulitzer Publishing Company and John
Kueneke.(viii)
</TABLE>

- ---------------
(i) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994.

(ii) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995.

(iii) Incorporated by reference to Pulitzer Publishing Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1996.

(iv) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996.

(v) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997.

(vi) Incorporated by reference to Pulitzer Publishing Company's Current Report
on Form 8-K filed on January 22, 1999.

(vii) Incorporated by reference to Pulitzer Publishing Company's Registration
Statement (File No. 333-69701) on Form S-3.

(viii) Incorporated by reference to Pulitzer Inc.'s Report on Form 10 (File No.
1-14541), as amended.

(ix) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1998.

(b) REPORTS ON FORM 8-K.

On October 7, 1999, the Company filed a Current Report on Form 8-K to
disclose its execution of an agreement to purchase the assets of The Pantagraph.

See Item 14.(a)3.(a) for a listing of exhibits filed as part of this Annual
Report on Form 10-K.

(d) FINANCIAL STATEMENT SCHEDULES

See Item 14.(a)2. for a listing of financial statement schedules filed as
part of this Annual Report on Form 10-K.

58
<PAGE> 59

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 23rd day of March, 2000.
PULITZER INC.

By: /s/ ROBERT C. WOODWORTH
------------------------------------
Robert C. Woodworth,
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant in
the capacities indicated on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

MICHAEL E. PULITZER* Director; Chairman March 23, 2000
- ---------------------------------------------
(Michael E. Pulitzer)

/s/ ROBERT C. WOODWORTH Director; President and Chief March 23, 2000
- --------------------------------------------- Executive Officer (Principal Executive
(Robert C. Woodworth) Officer)

/s/ RONALD H. RIDGWAY Director; Senior Vice President -- March 23, 2000
- --------------------------------------------- Finance (Principal Financial and
(Ronald H. Ridgway) Accounting Officer)

KEN J. ELKINS* Director March 23, 2000
- ---------------------------------------------
(Ken J. Elkins)

DAVID E. MOORE* Director March 23, 2000
- ---------------------------------------------
(David E. Moore)

WILLIAM BUSH* Director March 23, 2000
- ---------------------------------------------
(William Bush)

EMILY RAUH PULITZER* Director March 23, 2000
- ---------------------------------------------
(Emily Rauh Pulitzer)

ALICE B. HAYES* Director March 23, 2000
- ---------------------------------------------
(Alice B. Hayes)

JAMES M. SNOWDEN, JR.* Director March 23, 2000
- ---------------------------------------------
(James M. Snowden, Jr.)
</TABLE>

/s/ RONALD H. RIDGWAY
By:
--------------------------------------

Ronald H. Ridgway*
attorney-in-fact

59
<PAGE> 60

PULITZER INC.

REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED

DECEMBER 31, 1999

EXHIBIT INDEX

10.33 Employment and Consulting Agreement, dated as of June 1, 1999,
between Pulitzer Inc. and Michael E. Pulitzer.

10.34 Employment Agreement, dated as of June 1, 1999, between Pulitzer Inc.
and Ronald H. Ridgway.

10.35 Split Dollar Life Insurance Agreement, dated as of June 16, 1999, by
and among Pulitzer Inc. and James E. Elkins and Diana K. Walsh.

10.36 Split Dollar Life Insurance Agreement, dated as of June 24, 1999, by
and among Pulitzer Inc. and Tansy K. Ridgway and Brian H. Ridgway.

10.37 Asset Purchase Agreement, as of October 4, 1999, by and between The
Chronicle Publishing Company and Pulitzer Inc.

21 Subsidiaries of Registrant

23 Independent Auditors' Consent

24 Power of Attorney

27 Financial Data Schedule

<PAGE> 1
EXHIBIT 10.33

EMPLOYMENT AND CONSULTING AGREEMENT

AGREEMENT made and entered into as of the 1st day of June, 1999, by and
between PULITZER INC., a Delaware corporation with its principal offices in St.
Louis, Missouri (the "Company"), and MICHAEL E. PULITZER, a resident of the
State of Missouri ("Pulitzer").

1. Employment. The Company will continue to employ the services of Mr.
Pulitzer, and Mr. Pulitzer will continue to provide services to the Company,
upon the terms and conditions set forth in this Agreement.

2. Term. The term of this Agreement will begin as of the date hereof
and, unless sooner terminated in accordance with the provisions hereof, will end
on May 31, 2006.

3. Position, Duties and Responsibilities. Mr. Pulitzer will serve as
Executive Chairman of the Board of Directors of the Company (the "Board") for
two years or such greater or lesser period as may be agreed upon by the parties.
Thereafter, for the balance of the term, Mr. Pulitzer will serve as
non-executive Chairman of the Board and will render such senior advisory
services to the Company as the Board may request at any time and from time to
time. In his capacity as Executive Chairman, Mr. Pulitzer will devote
substantially all of his business time and attention to the performance of his
duties and responsibilities under this Agreement. In his capacity as senior
advisor and/or non-executive Chairman of the Board, Mr. Pulitzer will devote so
much of his business time and attention to the performance of his duties and
responsibilities as the Board may reasonably request from time to time, taking
into account the non-full time nature of his position, as well as Mr. Pulitzer's
other commitments, activities and general convenience.

4. Compensation.

(a) Base Salary. The Company will pay salary to Mr. Pulitzer at an
annual rate of $980,000 during the period for which he serves as Executive
Chairman, in accordance with the Company's normal pay practices. The Company
will pay advisory and consulting fees to Mr. Pulitzer at an annual rate of
$700,000, not less frequently than monthly, during the balance of the term of
this Agreement.

(b) Annual Incentive Awards. During the period for which he serves as
Executive Chairman, Mr. Pulitzer will participate in any bonus plan that may be
established by the Company on the same basis as other senior executives, and, at
a minimum, Mr. Pulitzer will be eligible for an annual target incentive
opportunity of 40% of salary. Except as otherwise specifically provided in
Section 7 (relating to termination of service), Mr. Pulitzer will be entitled to
receive a pro rata bonus for the year in which his employment as Executive
Chairman ends. Bonuses will be payable promptly after the end of the year for
which they are earned, subject to deferral requirements that may be imposed by
the Company in order to preserve its income tax deduction or elective deferral
opportunities that may be afforded by the Company.

(c) Employee Benefit Programs and Perquisites. Mr. Pulitzer will be
entitled to participate in such employee retirement, pension, welfare and other
fringe benefit plans, arrangements and programs of the Company as are made
available to the Company's employees generally and to receive such additional
benefits and perquisites (including, without limitation, participation in any
stock option, restricted stock and other equity compensation plans or
arrangements) as are made available to other senior level executives of the
Company from time

<PAGE> 2

to time during the period for which he serves as Executive Chairman. The Company
has assumed the obligations of Pulitzer Publishing Company ("PPC") under the
split dollar life insurance Agreement dated December 27, 1996 between
PPC and Richard A. Palmer, trustee, as amended.

(d) SERP. The Company has assumed the obligations of PPC to Mr.
Pulitzer for benefits accrued by Mr. Pulitzer under PPC's Supplemental Executive
Benefit Pension Plan prior to the closing (the "Closing") of the transactions
contemplated by the Amended and Restated Agreement and Plan of Merger, dated as
of May 25, 1998, by and among PPC, the Company and Hearst-Argyle Television,
Inc. The Company will establish and maintain a similar plan ("SERP") for the
benefit of its eligible employees (including Mr. Pulitzer) under which the
Company's obligations assumed by PPC and its obligations for future benefit
accruals will be payable. The formula benefit payable to Mr. Pulitzer under the
SERP will be increased to 50% (from 40%) of final average compensation,
effective as of the date hereof. On the second anniversary of the date hereof or
upon Mr. Pulitzer's earlier termination of employment as Executive Chairman for
reasons other than by Mr. Pulitzer without Good Reason or by the Company for
Cause (within the meaning of Sections 7(c) and (d) hereof), the formula benefit
payable to Mr. Pulitzer under the SERP will be further increased to 55% of final
average compensation. Covered compensation paid to Mr. Pulitzer by PPC will be
taken into account and for the purpose of calculating his SERP entitlements.

(e) Retirement. Notwithstanding anything to the contrary contained
herein or in any other agreement, plan, program or arrangement, Mr. Pulitzer's
status as an active employee of the Company will end when he ceases to serve as
Executive Chairman and begins to serve in his capacity as non-executive Chairman
of the Board and senior advisor. Mr. Pulitzer will be deemed to have retired
from his employment with the Company at such time for purposes of determining
his rights and entitlements under any pension, retiree medical, retiree life
insurance, and any other plan, program or arrangement under which he is covered
as an employee of the Company and, from and after such time, Mr. Pulitzer will
be treated as an independent contractor for all such purposes and for any
payroll and other relevant purposes, including, without limitation, his right to
begin receiving his SERP benefit and his vesting rights under any stock option,
restricted stock or other equity compensation plan or arrangement of the
Company.

5. Place and Conditions of Employment. Mr. Pulitzer's place of
employment during the period for which he serves as Executive Chairman will be
in the St. Louis metropolitan area, subject to the need for occasional business
travel. The Company will not designate and Mr. Pulitzer will not be required to
have a fixed place of work with respect to his services as a senior advisor to
the Company, it being understood that such services will be provided by Mr.
Pulitzer at such location or locations as may be reasonably convenient to Mr.
Pulitzer at any time and from time to time. During the term of this Agreement,
the Company will provide Mr. Pulitzer with office space and accouterments,
secretarial, administrative and other support, and otherwise maintain working
conditions that are consistent with his status and tenure with the Company.

6. Reimbursement of Business Expenses. Mr. Pulitzer is authorized to
incur reasonable expenses in carrying out his duties and responsibilities under
this Agreement, and the Company will pay or promptly reimburse him for all such
expenses that are so incurred upon presentation of appropriate vouchers or
receipts. Mr. Pulitzer will be entitled to reimbursement for first class travel
and lodging accommodations while on Company business.

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<PAGE> 3

7. Termination of Employment.

(a) Death. If Mr. Pulitzer's employment with the Company terminates
before the end of the stated term of this Agreement by reason of his death,
then, as soon as practicable thereafter, the Company will pay to his estate an
amount equal to his "Accrued Compensation" (defined below). Mr. Pulitzer's
spouse and covered dependents will be entitled to continue to participate in the
Company's group health plan(s) at the same benefit level at which they
participated immediately before Mr. Pulitzer's death for a period of at least
one year after Mr. Pulitzer's death or, if longer, for the balance remaining in
the stated term of this Agreement at the time of his death, and, thereafter, for
such additional continuation period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Mr. Pulitzer
participated prior to his death. For the purposes hereof, the term "Accrued
Compensation" means, as of any date, the amount of any unpaid salary or advisory
and consulting fees earned by Mr. Pulitzer through that date, plus a pro rata
amount of Mr. Pulitzer's target annual incentive award to which Mr. Pulitzer
would have been entitled for the year in which such date occurs, plus any
additional amounts and/or benefits payable to or in respect of Mr. Pulitzer
under and in accordance with the provisions of any employee plan, program or
arrangement under which Mr. Pulitzer is then covered. If Mr. Pulitzer dies
before the expiration of the stated term of this Agreement, then, unless his
employment or services shall have been previously terminated by the Company for
Cause or voluntarily by Mr. Pulitzer without Good Reason pursuant to Section
7(c) below, in addition to any other amounts or benefits that may be payable,
his surviving spouse, if any, will be entitled to receive $29,167 on the first
day of the month following Mr. Pulitzer's death and on the first day of each
succeeding month until the earlier of: (1) the death of Mr. Pulitzer's surviving
spouse, or (2) the end of the stated term of this Agreement.

(b) Disability. If the Company terminates Mr. Pulitzer's employment or
advisory services before the end of the stated term of this Agreement by reason
of Mr. Pulitzer's "disability" (defined below), then Mr. Pulitzer will be
entitled to receive: (1) his Accrued Compensation through his employment
termination date, (2) continuing salary or advisory and consulting fees (at the
rate in effect at the time his employment or service terminates), reduced by any
amounts payable to him pursuant to a Company-sponsored long term disability
program, during the one-year period following the termination of his employment
or services, and (3) continuing participation in the Company's group health
plan(s) at the same benefit level at which he and his covered dependent(s)
participated immediately before the date of his disability termination for at
least one year or, if longer, for the then balance remaining in the stated term
of this Agreement and, thereafter, for such additional continuation period as
may be available under COBRA or under any post-retirement group health plan or
arrangement in which Mr. Pulitzer participated prior to the date of his
disability termination. For purposes of this Agreement, the term "disability"
means the inability of Mr. Pulitzer to substantially perform the customary
duties of his employment or other service for the Company for a period of at
least 180 consecutive days by reason of a physical or mental incapacity which is
expected to result in death or last indefinitely.

(c) Termination by the Company for Cause or Voluntary Termination by
Mr. Pulitzer without Good Reason. If the Company terminates Mr. Pulitzer's
employment or services for "Cause" (defined below) or if Mr. Pulitzer
voluntarily terminates his employment or services without "Good Reason" (as
defined in subsection (d) below) before the end of the stated term of this
Agreement, then Mr. Pulitzer will be entitled to receive his Accrued
Compensation through the termination date, determined without regard to pro rata
bonus, and nothing more. For purposes hereof, the Company may terminate Mr.
Pulitzer's employment for "Cause" if: (1) Mr. Pulitzer is

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<PAGE> 4

convicted for the commission of a felony involving moral turpitude, or (2) Mr.
Pulitzer fails to carry out his duties and responsibilities hereunder due to his
willful gross neglect or willful gross misconduct which cannot be cured or
which, if curable, is not cured within 30 days after receipt of written notice
by the Company and a reasonable opportunity to appeal to the Board (in person or
through a representative), provided that, in either case (1 or 2), Mr.
Pulitzer's conduct results in material harm to the financial condition or
reputation of the Company.

(d) Termination by the Company Without Cause or by Mr. Pulitzer for
Good Reason. If Mr. Pulitzer's employment or service is terminated by the
Company without Cause or by Mr. Pulitzer for Good Reason, then Mr. Pulitzer will
be entitled to receive: (1) Accrued Compensation through the termination date,
(2) continued salary and/or advisory and consulting fees for the then balance of
the stated term of this Agreement at the annual rate in effect immediately prior
to the termination date, (3) if the termination date occurs during the period
for which Mr. Pulitzer is serving as Executive Chairman, a single sum payment in
an amount equal to 40% of the highest annual rate of salary in effect before the
termination date (or, if higher, the highest annual incentive award paid or
payable to Mr. Pulitzer for any of the three preceding years (including, for
this purpose, employment with PPC) multiplied by the number of years (including
fractions of a year) remaining in the stated term of his employment as Executive
Chairman, (4) continued participation in the Company's group health plan(s) at
the same benefit level at which he and his covered dependent(s) participated
immediately before the termination of his employment or service for a period of
at least one year after such termination or, if longer, for the balance
remaining in the stated term of this Agreement at the time of such termination,
and, thereafter, for such additional continuation period as may be available
under COBRA or under any post-retirement group health plan or arrangement in
which Mr. Pulitzer participated prior to the termination of his employment or
service, (5) continued participation for at least one year or, if longer, for
the then balance remaining in the stated term of this Agreement in the Company's
life insurance plans at the same benefit level in effect immediately prior to
the termination date, (6) elimination of all restrictions, other than those
required by law, on any restricted or deferred stock awards previously granted
to Mr. Pulitzer and outstanding immediately prior to the termination date, and
(7) immediate vesting of all stock options previously granted to Mr. Pulitzer
and outstanding on the termination date. For the purposes of this Agreement, Mr.
Pulitzer may terminate his employment for "Good Reason" if:

(A) the Company materially diminishes Mr. Pulitzer's duties,
responsibilities or work conditions in a manner which is inconsistent
with the provisions hereof or with his status and position with the
Company;

(B) the Company wilfully fails or refuses to satisfy any of its
compensation obligations under this Agreement or violates the location
covenant set forth in section 5; or

(C) the Company fails to perform or breaches its obligations under any
other material provision of this Agreement and does not correct such
failure or breach (if correctable) within 30 days following notice
thereof by Mr. Pulitzer to the Company.

8. No Mitigation; No Offset. Mr. Pulitzer will have no obligation to
seek other employment or to otherwise mitigate the Company's obligations to him
arising from the termination of his employment or service, and no amounts paid
or payable to Mr. Pulitzer by the Company under this Agreement shall be subject
to offset for any remuneration to which Mr. Pulitzer may

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<PAGE> 5

become entitled from any other source after his employment or service with the
Company terminates, whether attributable to subsequent employment,
self-employment or otherwise.

9. Restrictive Covenants.

(a) Nondisclosure of Confidential Information. Mr. Pulitzer
acknowledges that, during the course of his employment with the Company, he has
had and will have access to confidential and proprietary information, documents
and other materials relating to the Company which are not generally known to
persons outside the Company (whether conceived or developed by Mr. Pulitzer or
others) and confidential information, documents and other materials entrusted to
the Company by third parties, including, without limitation, financial
information, trade secrets, techniques, know-how, marketing and other business
plans, data, strategies and forecasts, and the substance of arrangements and
agreements with customers, suppliers and others (collectively, "Confidential
Information"). Any Confidential Information conceived or developed by Mr.
Pulitzer during the period of his employment will be the exclusive property of
the Company. Except as specifically authorized by the Company, Mr. Pulitzer will
not (during or after his employment hereunder) disclose Confidential Information
to any third person, firm or entity or use Confidential Information for his own
purposes or for the benefit of any third person, firm or entity other than (1)
as may be legally required in response to any summons, order or subpoena issued
by a court or governmental agency, or (2) Confidential Information which is or
becomes available to the general public through no act or failure to act by Mr.
Pulitzer.

(b) Non-solicitation. During employment and for a period of one
year after the termination of his employment, Mr. Pulitzer will not, directly or
indirectly, solicit, induce or otherwise attempt to influence any employee of
the Company or any subsidiary or other affiliate thereof to leave employment
therewith.

(c) Remedies. Mr. Pulitzer acknowledges and agrees that damages in
an action at law for breach of any of the provisions of this section will be
difficult to determine and will not afford a full and adequate remedy and,
therefore, agrees that the Company, in addition to seeking damages in an action
at law, may seek specific performance and such equitable or other remedies as
may be available for breach of this section, including, without limitation, the
issuance of a temporary or permanent injunction, without the necessity of a
bond. Except as otherwise provided in this section, the provisions of this
subsection (c) shall not be construed as a waiver by Mr. Pulitzer of any rights
which Mr. Pulitzer may have to offer defenses to any request made by the Company
for injunctive relief.

(d) Survival. The obligations set forth in this section 9 shall
survive the termination of Mr. Pulitzer's employment or service under this
Agreement.

10. Litigation Assistance. Mr. Pulitzer will cooperate with the
Company, during the term of his employment and thereafter, by making himself
reasonably available to testify on behalf of the Company or any subsidiary or
affiliate of the Company in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to reasonably assist the Company
or any such subsidiary or affiliate in any such action, suit, or proceeding by
providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company or any
such subsidiary or affiliate, as reasonably requested; provided, however, that
the same does not materially interfere with his then current personal or
professional

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<PAGE> 6

activities. The Company will reimburse Mr. Pulitzer, on an after-tax basis, for
all expenses reasonably incurred by him in connection with his provision of
testimony or assistance.

11. Resolution of Disputes. Any controversy or claim arising out of or
relating to this Agreement or any breach or asserted breach hereof, other than
an action or claim seeking injunctive relief under section 9, shall be resolved
by binding arbitration, to be held in St. Louis in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Pending the resolution of any arbitration or court proceeding, the
Company will continue payment of all amounts and benefits due Mr. Pulitzer under
this Agreement. All costs and expenses of any arbitration or court proceeding
(including fees and disbursements of counsel) shall be borne by the respective
party incurring such costs and expenses, but the Company shall reimburse Mr.
Pulitzer for such reasonable costs and expenses in the event he substantially
prevails in such arbitration or court proceeding.

12. Indemnification. If Mr. Pulitzer is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
is or was a director, officer or employee of the Company, PPC or any subsidiary
or affiliate thereof or was serving at the request of the Company or any
subsidiary or affiliate as a director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is Mr. Pulitzer's alleged action in an official
capacity while serving as a director, officer, member, employee or agent, then
the Company will indemnify Mr. Pulitzer and hold him harmless to the fullest
extent legally permitted or authorized by the Company's certificate of
incorporation or bylaws or resolutions of the Company's Board or, if greater, by
the laws of the State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by Mr. Pulitzer in connection therewith, except to the
extent attributable to Mr. Pulitzer's gross negligence or fraud, and such
indemnification shall continue as to Mr. Pulitzer even if he has ceased to be a
director, member, officer, employee or agent of the Company or other entity and
shall inure to the benefit of Mr. Pulitzer's heirs, executors and
administrators. The Company will advance to Mr. Pulitzer all reasonable costs
and expenses to be incurred by him in connection with a Proceeding within 20
days after receipt by the Company of a written request for such advance. Such
request shall include an undertaking by Mr. Pulitzer to repay the amount of such
advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses. The provisions of this section
shall not be deemed exclusive of any other rights of indemnification to which
Mr. Pulitzer may be entitled or which may be granted to him and shall be in
addition to any rights of indemnification to which he may be entitled under any
policy of insurance.

13. Assignment; Binding Nature. The services and duties to be performed
by Mr. Pulitzer hereunder are personal and may not be assigned. This Agreement
shall be binding upon and inure to the benefit of the Company, its successors
and assigns and Mr. Pulitzer and his heirs and representatives. The Company may
assign this Agreement to a successor in interest, provided that any such
assignee affirmatively adopts and agrees to fulfill all obligations to Mr.
Pulitzer hereunder and the Company remains secondarily liable to Mr. Pulitzer
therefor.

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<PAGE> 7
14. No Impediment to Agreement. The Company represents and warrants
that it is fully authorized and empowered to enter into this Agreement and that
the performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization. Mr. Pulitzer
represents and warrants that there is no legal or other impediment which would
prohibit him from entering into this Agreement or which would prevent him from
performing his duties hereunder.

15. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by Mr. Pulitzer and an
authorized officer of the Company. Except as set forth herein, no delay or
omission to exercise any right, power or remedy accruing to any party shall
impair any such right, power or remedy or shall be construed to be a waiver of
or an acquiescence to any breach hereof. No waiver by either party of any breach
by the other party of any condition or provision contained in this Agreement to
be performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Mr. Pulitzer or an authorized
officer of the Company, as the case may be.

16. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.

17. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of Mr. Pulitzer's employment to the
extent necessary to the intended preservation of such rights and obligations.

18. Beneficiaries; References. Mr. Pulitzer shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Mr. Pulitzer's death by giving the Company written notice thereof. In the event
of Mr. Pulitzer's death or a judicial determination of his incompetence,
reference in this Agreement to Mr. Pulitzer shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.

19. Notices. Any notice given to a party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned at the address indicated below or to such changed address as
such party may subsequently give such notice of.

If to the Company: Pulitzer Inc.
900 North Tucker Boulevard
St. Louis, Missouri 63101
Attention: Secretary

If to Mr. Pulitzer: Michael E. Pulitzer
625 So. Skinker Boulevard, #1603
St. Louis, Missouri 63105

20. Withholding. The Company may withhold taxes from any and all
amounts due Mr. Pulitzer as may be required to be withheld pursuant to
applicable law.

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<PAGE> 8

21. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of Delaware without reference to
principles of conflict of laws.

22. Entire Agreement. This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
Except as specifically provided in this Agreement, the existence of this
Agreement shall not be interpreted to preclude, prohibit or restrict Mr.
Pulitzer's participation in any other employee benefit or other plans or
programs in which he currently participates.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

PULITZER INC.

By: /s/ Robert C. Woodworth
---------------------------

/s/ Michael E. Pulitzer
-----------------------
Michael E. Pulitzer

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<PAGE> 1

EXHIBIT 10.34

EMPLOYMENT AGREEMENT

AGREEMENT made and entered into as of the 1st day of June, 1999, by and
between PULITZER INC., a Delaware corporation with its principal offices in St.
Louis, Missouri (the "Company"), and RONALD H. RIDGWAY, a resident of the State
of Missouri ("Mr. Ridgway").

1. Employment. The Company will continue to employ Mr. Ridgway, and Mr.
Ridgway will continue to be employed by the Company, upon the terms and
conditions set forth in this Agreement.

2. Term of Employment. Subject to earlier termination in accordance
with Section 7, the term of Mr. Ridgway's employment under this Agreement will
be begin as of the date hereof and will end on August 31, 2001.

3. Position, Duties and Responsibilities. Mr. Ridgway will serve as
Senior Vice President-Finance or in such other senior executive capacity as the
Board of Directors of the Company (the "Board") may determine. Mr. Ridgway will
report directly to the Chairman of the Board and the Chief Executive Officer of
the Company. Mr. Ridgway will devote substantially all of his business time and
attention to the performance of his duties and responsibilities under this
Agreement. Mr. Ridgway may engage in personal, charitable, investment,
professional and other activities to the extent such activities do not prevent
him from properly fulfilling his obligations to the Company under this
Agreement.

4. Compensation.

(a) Base Salary. The Company will pay salary to Mr. Ridgway at an
annual rate of $360,000, in accordance with its regular payroll practices. The
Board will review Mr. Ridgway's salary at least annually. The Board, acting in
its discretion, may increase (but may not decrease) the annual rate of Mr.
Ridgway's salary in effect at any time.

(b) Annual Incentive Awards. Mr. Ridgway will participate in any bonus
plan that may be established by the Company on the same basis as other senior
executives. At a minimum, Mr. Ridgway will be eligible for an annual target
incentive opportunity of 40% of salary. Annual bonuses will be payable promptly
after the end of the year for which they are earned, subject to deferral
requirements that may be imposed by the Company in order to preserve its income
tax deduction or elective deferral opportunities that may be afforded by the
Company.

(c) Employee Benefit Programs and Perquisites. Mr. Ridgway will be
entitled to participate in such employee retirement, pension, welfare and fringe
benefit plans, arrangements and programs of the Company as are made available to
the Company's employees generally and to receive such additional benefits and
perquisites as are made available to other senior level executives of the
Company from time to time. The Company has assumed the obligations of Pulitzer
Publishing Company ("PPC") under its split dollar life insurance agreement dated
December 30,1996 with Doris D. Ridgway and Boatmen's Trust Company, as
amended. Mr. Ridgway will be entitled to participate in any stock option,
restricted stock or other equity-based plans or programs of the Company that are
made available to other executives of the Company.

(d) SERP. The Company has assumed the obligations of PPC to Mr. Ridgway
for benefits accrued by Mr. Ridgway under PPC's Supplemental Executive Benefit
Pension Plan ("SERP")

<PAGE> 2

prior to the closing (the "Closing") of the transactions contemplated by the
Amended and Restated Agreement and Plan of Merger, dated as of May 25, 1998, by
and among PPC, the Company and Hearst-Argyle Television Inc., and the Company
will either continue to maintain the SERP for the benefit of its eligible
employees (including Mr. Ridgway) or will establish another plan or arrangement
that will provide Mr. Ridgway with continuing future benefits and accruals that
are at least as favorable as would have been provided under the terms of the
SERP in effect immediately prior to the Closing.

(e) Retirement. Notwithstanding anything to the contrary contained
herein or in any other agreement, plan, program or arrangement, if Mr. Ridgway
continues his employment with the Company through the end of the stated term or
if his employment ends sooner for any reason other than death, termination by
the Company for Cause (as defined in Section 7(c) hereof) or voluntary
termination by Mr. Ridgway without Good Reason (as defined in Section 7(d)
hereof), then, for all purposes of this Agreement and for the purposes of
determining Mr. Ridgway's and his dependents' or beneficiaries' rights and
entitlements under any pension, retiree medical, retiree life insurance, or any
other employee benefit plan, program or arrangement (except any tax-qualified
retirement pension or savings plan in which Mr. Ridgway is then a participant),
including, without limitation, the right to receive his total accrued SERP
benefit (without reduction for early retirement or otherwise) and the
acceleration of his vesting under any stock option, restricted stock or other
equity compensation plan or arrangement of the Company, Mr. Ridgway will be
deemed to have terminated active employment by reason of his normal retirement.

5. Place and Conditions of Employment. Mr. Ridgway's place of
employment during the term of his employment under this Agreement will be in
the St. Louis metropolitan area, subject to the need for occasional business
travel. The conditions of Mr. Ridgway's employment, including, without
limitation, office space and accouterments, secretarial, administrative and
other support, will be consistent with his status as a senior executive officer
of the Company.

6. Reimbursement of Business Expenses. Mr. Ridgway is authorized to
incur reasonable expenses in carrying out his duties and responsibilities under
this Agreement, and the Company will promptly reimburse him for all such
expenses that are so incurred upon presentation of appropriate vouchers or
receipts, subject to the Company's expense reimbursement policies applicable to
senior executive officers generally.

7. Termination of Employment.

(a) Death. If Mr. Ridgway's employment with the Company terminates
before the end of the stated term of this Agreement by reason of his death,
then, as soon as practicable thereafter, the Company will pay to his estate an
amount equal to his "Accrued Compensation" (defined below). Mr. Ridgway's spouse
and covered dependents will be entitled to continue to participate in the
Company's group health plan(s) at the same benefit level at which they
participated immediately before Mr. Ridgway's death for a period of at least one
year after Mr. Ridgway's death or, if longer, for the balance remaining in the
stated term of this Agreement at the time of his death, and, thereafter, for
such additional continuation period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Mr. Ridgway
participated prior to his death. For the purposes hereof, the term "Accrued
Compensation" means, as of any date, the amount of any unpaid salary earned by
Mr. Ridgway through that date, plus a pro rata amount of Mr. Ridgway's target
annual incentive award for the year in which such date occurs, plus any

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<PAGE> 3

additional amounts and/or benefits payable to or in respect of Mr. Ridgway under
and in accordance with the provisions of any employee plan, program or
arrangement under which Mr. Ridgway is covered immediately prior to his death.

(b) Disability. If the Company terminates Mr. Ridgway's employment
before the end of the stated term of this Agreement by reason of Mr. Ridgway's
"disability" (defined below), then Mr. Ridgway will be entitled to (1) his
Accrued Compensation through his employment termination date (determined with
regard to Section 4(e)), (2) continuing salary payments (at the rate in effect
at the time his employment terminates), reduced by any amounts payable to him
pursuant to a Company-sponsored long term disability program, during the
one-year period following the termination of his employment, and (3) continuing
participation in the Company's group health plan(s) at the same benefit level at
which he and his covered dependent(s) participated immediately before the
termination of his employment for a period of at least one year after such
termination or, if longer, for the balance remaining in the stated term of this
Agreement at the time of such termination of employment, and, thereafter, for
such additional continuation period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Mr. Ridgway
participated prior to the termination of his employment by reason of his
disability. For purposes of this Agreement, the term "disability" means the
inability of Mr. Ridgway to substantially perform the customary duties of his
employment for the Company for a period of at least 120 consecutive days by
reason of a physical or mental incapacity which is expected to result in death
or last indefinitely.

(c) Termination by the Company for Cause or Voluntary Termination by
Mr. Ridgway without Good Reason. If the Company terminates Mr. Ridgway's
employment for "Cause" (defined below) or if Mr. Ridgway voluntarily terminates
his employment without "Good Reason" (as defined in subsection(d) below) before
the end of the stated term of this Agreement, then Mr. Ridgway will be entitled
to receive his Accrued Compensation through the date his employment terminates,
determined without regard to pro rata bonus, and nothing more. For purposes
hereof, the Company may terminate Mr. Ridgway's employment for "Cause" if (1)
Mr. Ridgway commits a felony involving moral turpitude, or (2) Mr. Ridgway fails
to carry out the duties and responsibilities of his employment due to his
willful gross neglect or willful gross misconduct which cannot be cured or
which, if curable, is not cured within 30 days after receipt of written notice
by the Company and a reasonable opportunity to appeal to the Board (in person or
through a representative), provided that, in either case (1 or 2), Mr. Ridgway's
conduct results in material harm to the financial condition or reputation of the
Company.

(d) Termination by the Company Without Cause or by Mr. Ridgway for Good
Reason. If Mr. Ridgway's employment is terminated by the Company without Cause
or by Mr. Ridgway for Good Reason, then Mr. Ridgway will be entitled to receive
(1) Accrued Compensation through the termination date (determined with regard to
Section 4(e)), (2) continued salary for a period of six months after the
termination date (or, if longer, for the balance of the stated term of this
Agreement) at his annual rate of salary in effect immediately prior to the
termination date, (3) a single sum payment in an amount equal to 40% of the
highest annual rate of salary in effect before the termination date (or, if
higher, the highest annual incentive award paid or payable to Mr. Ridgway for
any of the three preceding years (including, for this purpose, employment with
PPC) multiplied by the number of years (including fractions of a year) covered
by the period described in (2), (4) continued participation in the Company's
group health plan(s) at the same benefit level at which he and his covered
dependent(s) participated immediately before the termination of his

-3-

<PAGE> 4
employment for a period of at least one year after such termination or, if
longer, for the balance remaining in the stated term of this Agreement at the
time of such termination of employment, and, thereafter, for such additional
continuation period as may be available under COBRA or under any post-retirement
group health plan or arrangement in which Mr. Ridgway participated prior to the
termination of his employment, (5) continued participation for at least one year
or, if longer, for the then balance remaining in the stated term of this
Agreement in the Company's life insurance plans at the same benefit level in
effect immediately prior to the termination date, (6) elimination of all
restrictions, other than those required by law, on any restricted or deferred
stock awards previously granted to Mr. Ridgway and outstanding at the time of
his termination of employment, and (7) immediate vesting of all stock options
previously granted to Mr. Ridgway and outstanding at the time of his termination
of employment. For the purposes hereof, Mr. Ridgway may terminate his employment
for "Good Reason" if:

(A) the Company materially diminishes Mr. Ridgway's duties,
responsibilities or employment conditions in a manner which is
inconsistent with the provisions hereof or with his status as a senior
executive officer of the Company or which has or reasonably can be
expected to have a material adverse effect on Mr. Ridgway's status or
authority within the Company;

(B) the Company wilfully fails or refuses to satisfy any of its
compensation obligations under this Agreement or violates the location
covenant set forth in section 5; or

8. No Mitiqation; No Offset. Mr. Ridgway will have no obligation to
seek other employment or to otherwise mitigate the Company's obligations to him
arising from the termination of his employment, and no amounts paid or payable
to Mr. Ridgway by the Company under this Agreement shall be subject to offset
for any remuneration to which Mr. Ridgway may become entitled from any other
source after his employment with the Company terminates, whether attributable to
subsequent employment, self-employment or otherwise.

9. Restrictive Covenants.

(a) Nondisclosure of Confidential Information. Mr. Ridgway acknowledges
that, during the course of his employment with the Company, he has had and will
have access to confidential and proprietary information, documents and other
materials relating to the Company which are not generally known to persons
outside the Company (whether conceived or developed by Mr. Ridgway or others)
and confidential information, documents and other materials entrusted to the
Company by third parties, including, without limitation, financial information,
trade secrets, techniques, know-how, marketing and other business plans, data,
strategies and forecasts, and the substance of arrangements and agreements with
customers, suppliers and others (collectively, "Confidential Information"). Any
Confidential Information conceived or developed by Mr. Ridgway during the period
of his employment will be the exclusive property of the Company. Except as
specifically authorized by the Company, Mr. Ridgway will not (during or after
his employment

-4-

<PAGE> 5

hereunder) disclose Confidential information to any third person, firm or entity
or use Confidential Information for his own purposes or for the benefit of any
third person, firm or entity other than (1) as may be legally required in
response to any summons, order or subpoena issued by a court or governmental
agency, or (2) Confidential Information which is or becomes available to the
general public through no act or failure to act by Mr. Ridgway.

(b) Non-solicitation. During employment and for a period of one year
after the termination of his employment, Mr. Ridgway will not, directly or
indirectly, solicit, induce or otherwise attempt to influence any employee of
the Company or any subsidiary or other affiliate thereof to leave employment
therewith.

(c) Remedies. Mr. Ridgway acknowledges and agrees that damages in an
action at law for breach of any of the provisions of this section will be
difficult to determine and will not afford a full and adequate remedy and,
therefore, agrees that the Company, in addition to seeking damages in an action
at law, may seek specific performance and such equitable or other remedies as
may be available for breach of this section, including, without limitation, the
issuance of a temporary or permanent injunction, without the necessity of a
bond. Except as otherwise provided in this section, the provisions of this
subsection (c) shall not be construed as a waiver by Mr. Ridgway of any rights
which Mr. Ridgway may have to offer defenses to any request made by the Company
for injunctive relief.

(d) Survival. The obligations set forth in this section 9 shall survive
the termination of Mr. Ridgway's employment or service under this Agreement.

10. Litigation Assistance. Mr. Ridgway will cooperate with the Company,
during the term of his employment and thereafter, by making himself reasonably
available to testify on behalf of the Company or any subsidiary or affiliate of
the Company in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and to reasonably assist the Company or any
such subsidiary or affiliate in any such action, suit, or proceeding by
providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company or any
such subsidiary or affiliate, as reasonably requested; provided, however, that
the same does not materially interfere with his then current personal or
professional activities. The Company will reimburse Mr. Ridgway, on an after-tax
basis, for all expenses reasonably incurred by him in connection with his
provision of testimony or assistance.

11. Resolution of Disputes. Any controversy or claim arising out of or
relating to this Agreement or any breach or asserted breach hereof, other than
an action or claim seeking injunctive relief under section 9, shall be resolved
by binding arbitration, to be held in St. Louis in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Pending the resolution of any arbitration or court proceeding, the
Company will continue payment of all amounts and benefits due Mr. Ridgway under
this Agreement. All costs and expenses of any arbitration or court proceeding
(including fees and disbursements of counsel) shall be borne by the respective
party incurring such costs and expenses, but the Company shall reimburse Mr.
Ridgway for such reasonable costs and expenses in the event he substantially
prevails in such arbitration or court proceeding.

-5-
<PAGE> 6

12. Indemnification. If Mr. Ridgway is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
is or was a director, officer or employee of the Company, PPC or any subsidiary
or affiliate thereof or was serving at the request of the Company or any
subsidiary or affiliate as a director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is Mr. Ridgway's alleged action in an official capacity
while serving as a director, officer, member, employee or agent, then the
Company will indemnify Mr. Ridgway and hold him harmless to the fullest extent
legally permitted or authorized by the Company's certificate of incorporation or
bylaws or resolutions of the Company's Board or, if greater, by the laws of the
State of Delaware, against all cost, expense, liability and loss (including,
without limitation, attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by Mr. Ridgway in connection therewith, except to the extent
attributable to Mr. Ridgway's gross negligence or fraud, and such
indemnification shall continue as to Mr. Ridgway even if he has ceased to be a
director, member, officer, employee or agent of the Company or other entity and
shall inure to the benefit of Mr. Ridgway's heirs, executors and administrators.
The Company will advance to Mr. Ridgway all reasonable costs and expenses to be
incurred by him in connection with a Proceeding within 20 days after receipt by
the Company of a written request for such advance. Such request shall include an
undertaking by Mr. Ridgway to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses. The provisions of this section shall not be deemed exclusive
of any other rights of indemnification to which Mr. Ridgway may be entitled or
which may be granted to him and shall be in addition to any rights of
indemnification to which he may be entitled under any policy of insurance.

13. Assignment; Binding Nature. The services and duties to be performed
by Mr. Ridgway hereunder are personal and may not be assigned. This Agreement
shall be binding upon and inure to the benefit of the Company, its successors
and assigns and Mr. Ridgway and his heirs and representatives. The Company may
assign this Agreement to a successor in interest, provided that any such
assignee affirmatively adopts and agrees to fulfill all obligations to Mr.
Ridgway hereunder and the Company remains secondarily liable to Mr. Ridgway
therefor.

14. No Impediment to Agreement. The Company represents and warrants
that it is fully authorized and empowered to enter into this Agreement and that
the performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization. Mr. Ridgway
represents and warrants that there is no legal or other impediment which would
prohibit him from entering into this Agreement or which would prevent him from
performing his duties hereunder.

15. Amendment or Waive. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by Mr. Ridgway and an
authorized officer of the Company. Except as set forth herein, no delay or
omission to exercise any right, power or remedy accruing to any party shall
impair any such right, power or remedy or shall be construed to be a waiver of
or an acquiescence to any breach hereof. No waiver by either party of any breach
by the other party of any condition or provision contained in this Agreement to
be performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same

-6-

<PAGE> 7

or any prior or subsequent time. Any waiver must be in writing and signed by Mr.
Ridgway or an authorized officer of the Company, as the case may be.

17. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of Mr. Ridgway's employment to the
extent necessary to the intended preservation of such rights and obligations.

-7-

<PAGE> 8
18. Beneficiaries; References. Mr. Ridgway shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Mr. Ridgway's death by giving the Company written notice thereof. In the event
of Mr. Ridgway's death or a judicial determination of his incompetence,
reference in this Agreement to Mr. Ridgway shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.

If to the Company: Pulitzer Inc.
900 North Tucker Boulevard
St. Louis, Missouri 63101
Attention: Secretary

If to Mr. Ridgway: Ronald H. Ridgway
2001 Meadowbrook Way Drive
Chesterfield, Missouri 63017

20. Withholding. The Company may withhold taxes from any and all
amounts due Mr. Ridgway as may be required to be withheld pursuant to applicable
law.

21. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of Delaware without reference to
principles of conflict of laws.

22. Entire Agreement. This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
Except as specifically provided in this Agreement, the existence of this
Agreement shall not be interpreted to preclude, prohibit or restrict Mr.
Ridgway's participation in any other employee benefit or other plans or programs
in which he currently participates.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

PULITZER INC.

/s/ Robert C. Woodworth
-----------------------------------
By: Robert C. Woodworth

/s/ Ronald H. Ridgway
-----------------------------------
Ronald H. Ridgway

-8-

<PAGE> 1
EXHIBIT 10.35

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

AGREEMENT made as of the 16th day of June, 1999, by and among PULITZER
INC., a Delaware corporation (the "Company"), and JAMES E. ELKINS and DIANA K.
WALSH, as trustees ("Trustees"), under Trust Agreements dated September 17,
1996.
WHEREAS, Ken J. Elkins ("Executive") was employed as a senior executive
officer of Pulitzer Publishing Company and is currently serving as a member of
the Board of Directors of the Company; and

WHEREAS, the Trustees own two survivorship life insurance policies,
Nos. 8,216,111 and 8,216,104 (collectively, the "Policies" and individually a
"Policy"), issued by C.M. Life Insurance Company (the "Insurer") on the joint
lives of the Executive and his wife with face amounts of $2,000,000 and
$1,900,000, respectively; and

WHEREAS, this agreement is being made by the Company in accordance with
the requirements of the Assignment and Assumption Agreement - Employee Benefit
Plans made as of March 18, 1999 between the Company and Pulitzer Publishing
Company.
NOW, THEREFORE, the parties agree as follows:
1. The Policies. The Trustees have applied for and are the owners of
the Policies. The Trustees will maintain physical possession of the Policies
while this agreement is in effect.

2. Payment of Premiums. The Company will pay $248,200 to the Insurer as
an initial Policy premium (of which $124,500 is allocable to Policy No.
8,216,111, and $123,700 is allocable to Policy No. 8,216,104). Thereafter, with
respect to each Policy, the Company will make eight annual payments to the
Insurer in an amount equal to the planned premium specified in the Policy;
provided, however, that the Company will have no obligation to make planned
premium payments under either Policy following the termination of this
agreement. The Company, in its discretion, may make greater premium payments
under the Policies than is required by this agreement, except to the extent that
any such greater payment

<PAGE> 2

would result in either Policy's failing to meet the definition of a life
insurance contract under Section 7702 of the Internal Revenue Code of 1986.

3. Company's Interest in the Policies. The Company's interest in each
of the Policies shall be equal to (a) minus (b), where (a) is the greater of (1)
the cash surrender value of the Policy or (2) the total amount of premium
payments net of withdrawals made by the Company under the Policy; and (b) is the
amount of any outstanding Policy loan obligation incurred by the Company,
including accrued and unpaid interest thereon. The Company may direct the
investment of the cash value of each of the Policies in accordance with the
provisions thereof. Subject to the written consent of the Trustees, the Company
may withdraw or borrow funds from each of the Policies.

4. Trustees' Rights. The Trustees shall have all rights under each of
the Policies that are not specifically granted to the Company by this agreement,
including, without limitation, the rights to change the beneficiary designation
under the Policy and exercise settlement options under the Policy; provided,
however, that the Trustees may not surrender the Policies, change the death
benefit option under the Policies or otherwise take action that would jeopardize
the Company's right to recover its interest in the Policies without the written
consent of the Company. In the event of an assignment by the Trustees, the
assignee shall possess all of the rights and obligations of the Trustees in the
Policies and under this agreement.

5. Collateral Assignment. The parties will enter into a collateral
assignment agreement to evidence the Company's interest in the Policies set
forth in this agreement. Notwithstanding its interest in the Policies, the
Company shall have no right to take any action that would endanger or impair the
interest of the Trustees in the Policies, including, without limitation, the
right to receive Policy proceeds in excess of the value of the Company's
interest upon the Insureds' death.

6. Termination of Agreement. This agreement will terminate upon the
happening of any one of the following events: (a) the death of the survivor of
the Insureds; (b) delivery by the Trustees to

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<PAGE> 3

the Company of written notice of termination; and (c) with respect to any
Policy, payment in full to the Company of the Company's interest in the Policy.
In the event this agreement terminates by reason of delivery by the Trustees of
written notice of termination, the Trustees shall have 90 days in which to pay
or cause to be paid to the Company the then value of the Company's interest in
the Policies (to the extent not previously paid). Upon the payment of the
Company's interest in the Policies, the Company shall release the collateral
assignment and the collateral assignment will be of no further force or effect.
If the Trustees do not pay or cause such amount to be paid to the Company within
said 90-day period, then (x) the Company may surrender the Policies without the
consent of the Trustees or (y) the Trustees may transfer ownership of the
Policies to the Company, and, in either event, the obligations of the Trustees
under this agreement and the interest of the Trustees in the Policies will
thereupon be discharged and terminated.

7. Death of Insureds. If this agreement is not sooner terminated, then,
upon the death of the survivor of the Insureds, the Company shall be entitled to
receive from the proceeds of each of the Policies the then value of the
Company's interest in the Policy, and the balance of the proceeds of the Policy
shall be paid to the Trustees or such other beneficiary or beneficiaries as
shall have been designated by the Trustees under the Policy.

8. Insurer Not a Party. The Insurer is not a party to this agreement
and shall have no liability except as set forth in each Policies. The Insurer
shall not be bound to inquire into or take notice of the provisions of this
agreement or to inquire as to the application of any payments made by it
pursuant to the terms of the Policies.

9. Amendment. This agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and may only be amended or
modified, in whole or in part, by the Trustees and the Company in writing.

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<PAGE> 4

10. Assignment and Successors. This agreement will be binding upon and
inure to the benefit of the parties and their respective legal representatives
and successors and assigns.

11. Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have entered into this agreement
as of the date first above written.

PULITZER INC.

By: /s/ Ronald H. Ridgway
------------------------------------
Name: Ronald H. Ridgway
Title: Senior Vice President-Finance

/s/ James E. Elkins
---------------------------------------
James E. Elkins, Trustee

/s/ Diana K. Walsh
---------------------------------------
Diana K. Walsh, Trustee

-4-
<PAGE> 5

SPLIT DOLLAR COLLATERAL ASSIGNMENT

Issuing Company: C.M. Life Insurance Company ("Insurer")

Policy No.: 8,216,104 and 8,216,111 ("Policy")
-----------------------------------------------------

Insured: Kennie J. Elkins and Rose M. Elkins ("Insured")
----------------------------------------------

Owner/Assignor: James E. Elkins and Diana K. Walsh, Trustees, under Trust
Agreements dated September 17, 1996 ("assignor")

Assignee: Pulitzer Inc. ("assignee")

RECITALS

A. The Assignor desires to assign to the Assignee a collateral
interest in the Policy as collateral for certain liabilities of the Assignor to
the Assignee pursuant to the Split-Dollar Life Insurance Agreement between the
Assignor and the Assignee (the "Split Dollar Agreement") regarding the Policy in
accordance with Rev. Rul. 64-328, 1964-2 CB 11.

B. The Assignee, by accepting this Assignment, agrees to the terms
and conditions hereof.

ASSIGNMENT

1. FOR VALUE RECEIVED, the Assignor hereby assigns, transfers and
sets over to the Assignee, its successors and assigns, a collateral interest in
and to the Policy, subject to all of the terms and conditions of the Policy and
to all superior liens, if any, which the Insurer may have against the Policy.

2. (a) It is expressly agreed that the Assignee's collateral
interest in the Policy shall be strictly limited to the following:

(1) Upon surrender of the Policy, the right to
obtain the then value of the Assignee's interest in the Policy as
set forth in the Split Dollar Agreement.

(2) Upon the death of the Insured, the right to
obtain that portion of the death proceeds as is equal to the then
value of the Assignee's interest in the Policy as set forth in the
Split Dollar Agreement.

3. Notwithstanding any other provision of this Assignment, the
Assignee shall have the right to make investment allocations of net premiums, to
make transfers of values among the Policy investment options, and, subject to
the consent of the Assignor, the right to borrow money from the Policy and/or
make withdrawals but not in excess of the then cash surrender value of the
Policy. If the Split Dollar Agreement is terminated at any time (other than in
accordance with Section 6(c) of the Split Dollar Agreement) and if the Assignee
is not paid an amount equal to the then value of its interest in the

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<PAGE> 6

Policy within 90 days thereafter, the Assignee may surrender the Policy
without the consent of the Assignor.

4. Subject to paragraph 3 above, all other rights and interests in
the Policy, including, but not limited to, the right to surrender the Policy,
the right to designate the beneficiary of the death proceeds under the Policy in
excess of the Assignee's collateral interest and the right to reduce the death
benefit in accordance with the Split Dollar Agreement, shall be retained by the
Assignor, except the Assignor shall not have the right to make loans on the
Policy, transfers of values among the Policy investment options or withdrawals
from the Policy and the Assignor may surrender the Policy or change the death
benefit option only with the consent of the Assignee.

5. The Insurer is hereby authorized to recognize the claims of the
Assignee hereunder without any investigation thereof, or giving notice to
anyone, including the Assignor, and the Insurer shall not be responsible for the
application by the Assignee of any amounts paid by the Insurer. The signature of
the Assignee alone shall be sufficient for the exercise of its rights under the
Policy assigned hereby, and the receipt of the Assignee for any sums received by
it shall be a full discharge and release of the Insurer therefor.

6. The Assignor declares that there are no proceedings in
bankruptcy pending against the Assignor and that the Assignor's property is not
subject to any assignment for the benefit of creditors.

7. While this Assignment is in force, the Assignor directs that
all premium notices be sent to the Assignee at the address furnished by the
Assignee.

8. All provisions of this Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

PULITZER INC.

By: /s/ Ronald H. Ridgway
----------------------------------------
Name: Ronald H. Ridgway
Title: Senior Vice President-Finance

/s/ James E. Elkins
--------------------------------------------
James E. Elkins, Trustee

/s/ Diana K. Walsh
--------------------------------------------
Diana K. Walsh, Trustee

-2-
<PAGE> 7

<PAGE> 1
EXHIBIT 10.36

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

AGREEMENT made as of the 24th day of June, 1999, by and among PULITZER
INC., a Delaware corporation (the "Company"), and TANSY K. RIDGWAY and BRIAN H.
RIDGWAY, as trustees ("Trustee"), under Trust Agreement dated June 3, 1999.

WHEREAS, Ronald H. Ridgway ("Executive") is employed as a senior
executive officer of the Company; and

WHEREAS, the Trustee is the owner of a survivorship life insurance
policy, No. 8,215,876 (the "Policy"), issued by C.M. Life Insurance Company (the
"Insurer") on the joint lives of the Executive and his wife with a face amount
of $2,800,000; and

NOW, THEREFORE, the parties agree as follows:

1. The Policy. The Trustee has applied for and is the owner of the
Policy. The Trustee will maintain physical possession of the Policy while this
agreement is in effect.

2. Payment of Premiums. The Company will pay $199,500 to the Insurer as
an initial Policy premium and, thereafter, will make eight annual payments to
the Insurer, each in an amount equal to the planned premium specified in the
Policy; provided, however, that the Company will have no obligation to make
planned premium payments under the Policy following the termination of this
agreement. The Company, in its discretion, may make greater premium payments
under the Policy than is required by this agreement, except to the extent that
any such greater payment would result in the Policy's failing to meet the
definition of a life insurance contract under Section 7702 of the Internal
Revenue Code of 1986.

<PAGE> 2

3. Company's Interest in the Policy. The Company's interest in the
Policy shall be equal to (a) minus (b), where (a) is the greater of (1) the cash
surrender value of the Policy or (2) the total amount of premium payments net of
withdrawals made by the Company under the Policy; and (b) is the amount of any
outstanding Policy loan obligation incurred by the Company, including accrued
and unpaid interest thereon. The Company may direct the investment of the cash
value of the Policy in accordance with the provisions thereof. Subject to the
written consent of the Trustee, the Company may withdraw or borrow funds from
the Policy.

4. Trustee's Rights. The Trustee shall have all rights under the Policy
that are not specifically granted to the Company by this agreement, including,
without limitation, the rights to change the beneficiary designation under the
Policy and exercise settlement options under the Policy; provided, however, that
the Trustee may not surrender the Policy, change the death benefit option under
the Policy or otherwise take action that would jeopardize the Company's right to
recover its interest in the Policy without the written consent of the Company.
In the event of an assignment, the assignee shall possess all of the rights and
obligations of the Trustee in the Policy and under this agreement.

5. Collateral Assignment. The parties will enter into a collateral
assignment agreement to evidence the Company's interest in the Policy as set
forth in this agreement. Notwithstanding its interest in the Policy, the Company
shall have no right to take any action that would endanger or impair the
interest of the Trustee in the Policy, including, without limitation, the right
to receive the Policy proceeds in excess of the value of the Company's interest
upon the Insureds' death.

6. Termination of Agreement. This agreement will terminate upon the
happening of any one of the following events: (a) the termination of the
Executive's employment by the Company for "cause" (as that term is defined in
the Executive's employment agreement with the Company); (b) the death of the
survivor of the Insureds; (c) delivery by the Trustee to the Company of written
notice of termination; and (d) payment in full to the Company of the Company's
interest in the Policy. In the

-2-

<PAGE> 3

event this agreement terminates for reasons other than the death of the
Insureds, the Trustee shall have 90 days in which to pay or cause to be paid to
the Company the then value of the Company's interest in the Policy (to the
extent not previously paid). Upon the payment of the Company's interest in the
Policy, the Company shall release the collateral assignment of the Policy and
the collateral assignment will be of no further force or effect. If the Trustee
does not pay or cause such amount to be paid to the Company within said 90-day
period, then (x) the Company may surrender the Policy without the consent of the
Trustee or (y) the Trustee may transfer ownership of the Policy to the Company,
and, in either event, the obligations of the Trustee under this agreement and
the interest of the Trustee in the Policy will thereupon be discharged and
terminated.

7. Death of Insureds. If this agreement is not sooner terminated, then,
upon the death of the survivor of the Insureds, the Company shall be entitled to
receive from the proceeds of the Policy the then value of the Company's interest
in the Policy, and the balance of the proceeds of the Policy shall be paid to
the Trustee or such other beneficiary or beneficiaries as shall have been
designated by the Trustee under the Policy.

8. Insurer Not a Party. The Insurer is not a party to this agreement
and shall have no liability except as set forth in each Policy. The Insurer
shall not be bound to inquire into or take notice of the provisions of this
agreement or to inquire as to the application of any payments made by it
pursuant to the terms of the Policy.

10. Assignment and Successors. This agreement will be binding upon and
inure to the benefit of the parties and their respective legal representatives
and successors and assigns.

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<PAGE> 4

11. Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have entered into this agreement
as of the date first above written.

PULITZER INC.

By: /s/ Robert C. Woodworth
-----------------------------------
Name: Robert C. Woodworth
Title: Chief Executive Officer

/s/ Tansy K. Ridgway
-----------------------------------
Tansy K. Ridgway, Trustee

/s/ Brian H. Ridgway
------------------------------------
Brian H. Ridgway, Trustee

-4-

<PAGE> 5

SPLIT DOLLAR COLLATERAL ASSIGNMENT

Issuing Company: C.M. Life Insurance Company ("Insurer")

Policy No.: 8,215,876 ("Policy")
-----------------------------------------------------

Insured: Ronald H. Ridgway and Doris D. Ridgway ("Insured")
-----------------------------------------------

Owner/Assignor: Tansy K. Ridgway and Brian H. Ridgway, Trustees, under Trust
Agreement dated June 3, 1999 ("Assignor")

Assignee: Pulitzer Inc. ("Assignee")

RECITALS

B. The Assignee, by accepting this Assignment, agrees to the terms
and conditions hereof.

ASSIGNMENT

2. (a) It is expressly agreed that the Assignee's collateral
interest in the Policy shall be strictly limited to the following:

(1) Upon surrender of the Policy, the right to
obtain the then value of the Assignee's interest in the Policy as
set forth in the Split Dollar Agreement.

3. Notwithstanding any other provision of this Assignment, the
Assignee shall have the right to make investment allocations of net premiums, to
make transfers of values among the Policy investment options, and, subject to
the Assignor's consent, the right to borrow money from the policy and to make
withdrawals but not in excess of the then cash surrender value of the Policy. If
the Split Dollar Agreement is terminated at any time (other than in accordance
with Section 6(e) of the Split Dollar Agreement) and if the Assignee is not paid
an amount equal to the then value of its interest in the

-1-

<PAGE> 6

Policy within 90 days thereafter, the Assignee may surrender the Policy without
the consent of the Assignor.

6. The Assignor declares that there are no proceedings in
bankruptcy pending against the Assignor and that the Assignor's property is not
subject to any assignment for the benefit of creditors.

7. While this Assignment is in force, the Assignor directs that
all premium notices be sent to the Assignee at the address furnished by the
Assignee.

8. All provisions of this Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

PULITZER INC.

By: /s/ Robert C. Woodworth
--------------------------------------
Name: Robert C. Woodworth
Title: Chief Executive Officer

/s/ Tansy K. Ridgway
----------------------------------------
Tansy K. Ridgway, Trustee

/s/ Brian H. Ridgway
----------------------------------------
Brian H. Ridgway, Trustee

-2-

<PAGE> 1
EXHIBIT 10.37

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of October 4, 1999, by and between The Chronicle Publishing Company, a
Nevada corporation (the "Seller"), and Pulitzer Inc., a Delaware corporation
(the "Purchaser").

W I T N E S S E T H:

WHEREAS, the Seller owns certain assets which it uses to conduct the
operations of The Pantagraph, a daily newspaper serving Central Illinois, and
Illinois Valley Press, a collection of seven weekly newspapers, one monthly
business magazine and one shopper produced for local communities in Central
Illinois (collectively, the "Business").

WHEREAS, the Purchaser desires to purchase from the Seller, and the
Seller desires to sell to the Purchaser, substantially all of the assets of the
Seller owned, used or held for use by the Seller primarily to conduct the
operations of the Business, and in connection therewith, the Purchaser has
agreed to assume certain liabilities of the Seller relating to the Business, all
upon the terms and subject to the conditions set forth herein (such transaction
sometimes being referred to herein as the "Asset Purchase").

WHEREAS, the Seller and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Asset Purchase, all as more fully set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, promises and agreements hereinafter set forth, the mutual benefits to
be gained by the performance of such covenants, promises and agreements, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and accepted, the parties hereto hereby agree as follows:

ARTICLE I.
DEFINITIONS

1.1 Certain Definitions. For all purposes of and under this Agreement,
the following terms shall have the respective meanings set forth below:

(a) "Action" means any claim, action, suit or proceeding, arbitral
action, governmental inquiry, criminal prosecution or other investigation.

(b) "Affiliate" means any "affiliate" as defined in Rule 144(a)(1)
promulgated under the Securities Act of 1933, as amended, any successor statute
thereto, and the rules and regulations promulgated thereunder.

(c) "Business" shall have the meaning ascribed to such term in the
recitals and shall be deemed to include the Purchased Assets.

<PAGE> 2

(d) "Business Day" means any weekday (Monday through Friday) on
which commercial banks in San Francisco, California are open for business.

(e) "Confidentiality Agreement" means the letter agreement between
the Seller and the Purchaser, dated as of July 13, 1999.

(f) "Contract" means any currently enforceable contract, agreement,
indenture, note, bond, instrument, lease, conditional sales contract, mortgage,
license, franchise agreement, concession agreement, security interest, guaranty,
binding commitment or other agreement or arrangement, whether written or oral.

(g) "Encumbrance" means any security interest, pledge, mortgage,
lien, charge, easement, encroachment, lease, license, option, purchase right,
any right of a third party, adverse claim of ownership or use, restriction on
transfer (such as a right of first refusal or other similar right) or use or any
other contractual limitation of any nature, defect of title, or other
encumbrance of any kind or character.

(h) "Environmental Law" means any Law or Governmental Order
pertaining to land use, air, soil, surface water, groundwater (including the
protection, cleanup, removal, remediation or damage thereof), public or employee
health or safety or any other environmental matter, including, without
limitation, the following laws as in effect on the Closing Date: (i) Clean Air
Act (42 U.S.C. ss.7401, et seq.); (ii) Clean Water Act (33 U.S.C. ss.1251, et
seq.); (iii) Resource Conservation and Recovery Act (42 U.S.C. ss.6901, et
seq.); (iv) Comprehensive Environmental Resource Compensation and Liability Act
(42 U.S.C. ss.9601, et seq.); (v) Safe Drinking Water Act (42 U.S.C. ss.300f, et
seq.); (vi) Toxic Substances Control Act (15 U.S.C. ss.2601, et seq.); (vii)
Rivers and Harbors Act (33 U.S.C. ss.401, et seq.); (viii) Endangered Species
Act (16 U.S.C. ss.1531, et seq.); (ix) Occupational Safety and Health Act (29
U.S.C. ss.651, et seq.); and (x) any other Laws relating to Hazardous Materials
or Hazardous Materials Activities.

(i) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.

(j) "GAAP" means generally accepted accounting principles in the
United States.

(k) "Governmental Authority" means any government, any governmental
entity, department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial body, in each case whether federal, state, county,
provincial, local or foreign.

(l) "Governmental Order" means any statute, rule, regulation,
order, judgment, injunction, decree, stipulation or determination issued,
promulgated or entered by or with any Governmental Authority of competent
jurisdiction.

(m) "Hazardous Material" means any material or substance that is
prohibited or regulated by any Environmental Law or that has been designated by
any Governmental

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<PAGE> 3

Authority to be radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment, including asbestos, petroleum, radon gas and
radioactive matter.

(n) "Hazardous Materials Activity" means the handling,
transportation, transfer, recycling, storage, use, treatment, manufacture,
investigation, removal, remediation, release, exposure of others to, sale or
other distribution of any Hazardous Material or any product containing a
Hazardous Material.

(o) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, any successor statute thereto, and the rules and
regulations promulgated thereunder.

(p) "Income Tax" means any federal, state, county, provincial,
local or foreign income, franchise, business profits or other similar Tax, any
estimated Tax related thereto, any interest and penalties (civil or criminal)
thereon or additions thereto, and any expenses incurred in connection with the
determination, settlement or litigation of any Liabilities related to any such
Tax.

(q) "Intellectual Property" means any (i) United States and foreign
patents, patent applications, patent disclosures and improvements thereto, (ii)
United States and foreign trademarks, service marks, trade dress, logos, trade
names and corporate names, the goodwill associated therewith, and the
registrations and applications for registration thereof, and (iii) United States
and foreign copyrights, and the registrations and applications for registration
thereof.

(r) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.

(s) "IRS" means the United States Internal Revenue Service, and any
successor agency thereto.

(t) "Knowledge of the Seller," "known to the Seller" and phrases of
similar import mean, with respect to any matter in question relating to the
Business or the Seller, if (i) any executive officer of the Seller, (ii) Donald
Skaggs, the Publisher of The Pantagraph, (iii) Barry Winterland, the Chief
Financial Officer of The Pantagraph and the General Manager of the Illinois
Valley Press, (iv) Dan O'Brien, operations manager, (v) Mike Meece, human
resources manager, (vi) Bill Hertter, circulation director, (vii) Mary Keough,
advertising director, or (viii) Jan Dennis, director of newsroom operations, has
actual knowledge of such matter without obligation of inquiry.

(u) "Law" means any federal, state, county, provincial, local or
foreign statute, law, ordinance, regulation, rule, code or rule of common law.

(v) "Liability" means any direct or indirect debt, obligation or
liability of any kind or nature, whether accrued or fixed, absolute or
contingent, determined or determinable,

3
<PAGE> 4

matured or unmatured, and whether due or to become due, asserted or unasserted,
or known or unknown.

(w) "License" means any franchise, approval, permit, order,
authorization, consent, license, registration or filing, certificate, variance
and any other similar right obtained from or filed with any Governmental
Authority.

(x) "Material Adverse Effect" means any change or effect that is
materially adverse to the assets, liabilities, properties, operations, business,
condition (financial or otherwise) or results of operations of the Business,
except for any such changes or effects resulting from (i) the pendency of the
transactions contemplated by this Agreement, (ii) the announcement or other
disclosure of the transactions contemplated by this Agreement, (iii) regulatory
changes, or (iv) changes in conditions generally applicable to the newspaper
publishing industry, or in general economic conditions in the geographic regions
in which the Business is conducted.

(y) "NGCL" means the General Corporation Law of the State of
Nevada, and any successor statute thereto.

(z) "Permitted Encumbrances" means (i) Encumbrances for inchoate
mechanics' and materialmen's liens for construction in progress and workmen's,
repairmen's, warehousemen's and carriers' liens arising in the ordinary course
of the business, (ii) Encumbrances for Taxes not yet due and payable, and for
Taxes being contested in good faith, (iii) except as set forth in subsections
(i) and (ii) of Schedule 4.3, Encumbrances arising out of, under or in
connection with this Agreement, (iv) Encumbrances reflected on the Latest
Balance Sheet, (v) Encumbrances and imperfections of title the existence of
which would not reasonably be expected, to materially detract from the value of,
materially interfere with, or otherwise materially affect the use and enjoyment
of the property subject thereto or affected thereby, and (vi) solely with
respect to Owned Real Property, provided that the following are not violated by
existing improvements in any material respect and do not prohibit or materially
detract from the value of the Owned Real Property, interfere with or otherwise
affect the continued use and operation of such Owned Real Property for the same
uses and operations as currently conducted, or grant any third party any option
or right to acquire or lease a material portion thereof, (A) easements, rights
of way and other similar restrictions which would be shown by a current title
report, (B) conditions that may be shown by a current survey, title report or
physical inspection, and (C) zoning, building and other similar restrictions
imposed by applicable Law.

(aa) "Person" means any individual, general or limited partnership,
firm, corporation, limited liability company, association, trust, unincorporated
organization or other entity.

(bb) "Proprietary Rights" means (i) Intellectual Property, (ii)
trade secrets and confidential business information (including, without
limitation, ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, research and
development information, software, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial, marketing and
business data, pricing

4
<PAGE> 5

and cost information, business and marketing plans and customer and
supplier lists and information), (iii) other proprietary rights, (iv) copies
and tangible embodiments thereof (in whatever form or medium), and (v) licenses
granting any rights with respect to any of the foregoing.

(cc) "Seller Documents" means, collectively, the (i) the Grant
Deeds, (ii) the Bill of Sale, (iii) the Assignment and Assumption, and (iv) the
Assignment of Proprietary Rights.

(dd) "Subsidiary" means (unless otherwise indicated), with respect
to a Person, any other Person in which such Person has a direct or indirect
equity or other ownership interest greater than or equal to fifty percent (50%).

(ee) "Tax" means any federal, state, county, provincial, local or
foreign income, franchise, business profits, gross receipts, sales, use, ad
valorem, employment, payroll, excise, social security (FICA, OASDI or similar),
unemployment, disability, severance, transfer, gains, profits, excise,
franchise, property, capital stock, premium, minimum and alternative minimum or
other tax, fee, levy, duty, assessment or charge of any kind or nature
whatsoever imposed by any Governmental Authority (whether payable directly or by
withholding), together with any interest, penalties (civil or criminal),
additions to, or additional amounts imposed by, any Governmental Authority with
respect thereto, and any expenses incurred in connection with the determination,
settlement or litigation of any Liability therefor.

(ff) "Tax Return" means a report, return, refund claim, statement
or other information required to be supplied to, or otherwise filed with, a
Governmental Authority with respect to any Tax, including any schedule or
attachment thereto or any amendment thereof.

1.2 Certain Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the respective meanings ascribed
thereto in the respective sections of this Agreement set forth opposite each
such term below:

<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Agreement Preamble
Asset Purchase Recitals
Asset Transfer Amount 6.9(g)
Asset Transfer Date 6.9(g)
Assignment and Assumption 3.2(a)
Assignment of Proprietary Rights 3.2(a)
Assumed Liabilities 2.2(b)
Assumed Plans 6.9(c)
Benefit Plan(s) 4.11(a)
Bill of Sale 3.2(a)
Business Contract(s) 2.1(b)
Business Employee(s) 4.9
Business Insurance Policies 4.19(a)
Business License(s) 2.1(b)
</TABLE>

5
<PAGE> 6

<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Cash Payment 2.3(a)
Closing 3.1
Closing Date 3.1
Closing Working Capital 2.3(b)
Excluded Assets 2.1(c)
Excluded Liabilities 2.2(c)
Financial Statements 4.13(a)
GCIU Fund 6.9(j)
Grant Deeds 3.2(a)
Indemnified Party 9.4
Indemnifying Party 9.4
Independent Accountant 2.3(b)
Latest Balance Sheet 4.13(a)
Latest Balance Sheet Date 4.13(a)
Leased Assets 4.5(a)
Leased Real Property 4.5(a)
Losses 9.2
Material Business Contract(s) 4.7(a)
Material Business License(s) 4.8
Notice of Disagreement 2.3(b)
Owned Real Property 4.5(a)
Purchase Price 2.3(a)
Purchased Assets 2.1(b)
Purchaser Preamble
Purchaser DB Plan 6.9(f)
Purchaser 401(k) Plan 6.9(d)
Purchaser Trust 6.9(f)
Seller Preamble
Seller Articles of Incorporation 4.1
Seller Bylaws 4.1
Seller DB Plan 6.9(f)
Seller 401(k) Plan 6.9(d)
Seller Trust 6.9(f)
Short Term Agreement 4.7(a)
Statement of Working Capital 2.3(b)
Tax Audit 6.12
Termination Date 8.1(b)
Third Party Agreement 6.1(b)
Transferred Employees 6.9(a)
Transferred Non-Union Employees 6.9(a)
Working Capital 2.3(b)
</TABLE>

6
<PAGE> 7

ARTICLE II.
PURCHASE AND SALE OF ASSETS

2.1 Purchase and Sale of Purchased Assets.

(a) Purchase and Sale. Upon the terms and subject to the conditions
set forth herein, at the Closing, the Purchaser shall purchase from the Seller,
and the Seller shall irrevocably sell, convey, transfer, assign and deliver to
the Purchaser, free and clear of all Encumbrances other than Permitted
Encumbrances and those Encumbrances set forth in Schedule 4.5(b) hereto, all
right, title and interest in and to the Purchased Assets (as defined below).

(b) Definition of Purchased Assets. For all purposes of and under
this Agreement, the term "Purchased Assets" shall mean, refer to and include all
of the Seller's right, title and interest in and to all tangible and intangible
assets, properties and rights which are owned, used or held for use by the
Seller primarily to conduct the operations of the Business, on the Closing Date,
including, without limitation, all right, title and interest of the Seller in
and to all real property (including, without limitation, the Owned Real Property
set forth in Schedule 4.5(a) hereto), and any leaseholds and sub-leaseholds
therein, buildings, structures, improvements, fixtures, furnishings and other
fittings thereon, and easements, rights-of-way, and other appurtenances thereto,
all tangible personal property (whether or not located on the Seller's premises)
including all machinery, equipment and tools, furniture and furnishings,
computers and computer supplies, office materials and supplies, automobiles,
trucks and other vehicles, inventories of any kind or nature, raw materials and
supplies, manufactured and purchased goods, goods in process and finished goods,
all accounts, notes and other receivables, all prepaid assets and expenses, and
all books, records (other than copies of the Seller's Income Tax Returns),
ledgers, files, documents, correspondence, customer, supplier, advertiser,
circulation and other lists, invoices and sales data, creative, advertising and
other promotional materials, studies, reports, and other printed or written
materials or data, and specifically including, without limitation, the
following:

(i) Proprietary Rights (including, without limitation, the
Intellectual Property set forth in Schedule 4.6(a) hereto), goodwill associated
therewith, licenses and sublicenses granted and obtained with respect thereto,
rights thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the applicable Laws of all jurisdictions
and relating primarily to the Business;

(ii) Contracts relating primarily to the Business to which the
Seller is a party or by which its assets or properties are bound (each, a
"Business Contract" and, collectively, "Business Contracts") (including, without
limitation, the Material Business Contracts set forth in Schedule 4.7(a)
hereto), to the extent transferable by the Seller to the Purchaser, and all
rights thereunder;

(iii) Licenses owned or possessed by the Seller and relating
primarily to the Business (each, a "Business License" and, collectively,
"Business Licenses") (including,

7
<PAGE> 8

without limitation, the Material Business Licenses set forth in Schedule 4.8
hereto), to the extent transferable by the Seller to the Purchaser, and all
rights thereunder;

(iv) rights in or to all Assumed Plans, and any and all assets
associated with or allocated to Business Employees and former employees of the
Business thereunder;

(v) any and all refunds of Taxes relating primarily to the
Business other than refunds of Income Taxes;

(vi) Actions, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of
recoupment of any kind or nature (including, without limitation, any such item
relating to Taxes other than Income Taxes) relating to the Purchased Assets or
the Assumed Liabilities; and

(vii) the workers' compensation insurance policy with Third
Coast Insurance Company set forth on Schedule 4.19 hereto.

(c) Definition of Excluded Assets. Notwithstanding anything to the
contrary set forth in this Section 2.1 or elsewhere in this Agreement, the term
"Purchased Assets" shall not mean, refer to or include the following
(collectively, the "Excluded Assets"):

(i) the corporate charter and bylaws, qualifications to
transact business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
similar documents relating to the organization, maintenance, and existence of
the Seller as a corporation;

(ii) all assets, whether real or personal, tangible or
intangible, which are owned, used or held for use by the Seller primarily to
conduct any business operation or activity other than the Business;

(iii) all real and personal property (including, without
limitation, all equipment, furniture, fixtures, files, computers, computer
software and computer software licenses, supplies and other personal property)
used by the corporate and accounting departments of the Seller at its principal
executive offices in California;

(iv) nontransferable Business Contracts;

(v) nontransferable Business Licenses;

(vi) rights in or to all Benefit Plans other than Assumed
Plans, and all assets associated with such Benefit Plans;

(vii) cash and cash equivalents;

(viii) any and all refunds of Income Taxes;

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<PAGE> 9

(ix) Actions, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of
recoupment of any kind or nature (including any such item relating to Income
Taxes) relating to the Excluded Assets or the Excluded Liabilities;

(x) insurance policies applicable to the Business, other than
the workers' compensation insurance policy with Third Coast Insurance Company
set forth on Schedule 4.19 hereto, and all refunds paid or payable in connection
with the cancellation or discontinuance of any insurance policies applicable to
the Business (including, without limitation, the Business Insurance Policies set
forth in Schedule 4.19 hereto) following the Closing; and

(xi) all rights of the Seller under this Agreement, any
agreement, certificate, instrument or other document executed and delivered by
the Seller or the Purchaser in connection with the transactions contemplated
hereby, or any side agreement between the Seller and the Purchaser entered into
on or after the date of this Agreement.

2.2 Assumption of Liabilities.

(a) Assumption. Upon the terms and subject to the conditions set
forth herein, at the Closing the Purchaser shall assume from the Seller (and
therefore pay, perform and discharge), and the Seller shall irrevocably convey,
transfer and assign to the Purchaser, all of the Assumed Liabilities (as defined
below).

(b) Definition of Assumed Liabilities. For all purposes of and
under this Agreement, the term "Assumed Liabilities" shall mean, refer to and
include all Liabilities of the Seller primarily arising out of or relating to
the operation of the Business, including, without limitation, the Liabilities
set forth below to the extent that such Liabilities arose out of or relate
primarily to the operation of the Business or the Purchased Assets, but
specifically excluding the Excluded Liabilities (as defined below):

(i) Liabilities of the Seller under all Business Contracts
(including, without limitation, the Material Business Contracts set forth in
Schedule 4.7(a) hereto);

(ii) Liabilities of the Seller under all Business Licenses
(including, without limitation, the Material Business Licenses), to the extent
such Business Licenses are transferable by the Seller to the Purchaser;

(iii) Liabilities of the Seller under all Assumed Plans;

(iv) Liabilities reflected in the Latest Balance Sheet;

(v) Liabilities for Taxes other than Income Taxes of the Seller
or of any other Person required to be paid by the Seller pursuant to Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise;

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<PAGE> 10

(vi) Liabilities of the Seller arising out, of or in connection
with, any Action (including, without limitation, any Action set forth in
Schedule 4.16 hereto), other than Actions brought by or on behalf of any
shareholder, officer or director of Seller;

(vii) Liabilities of the Seller for any obligation to make
severance payments to any Business Employee pursuant to any collective
bargaining agreement covering such Business Employee;

(viii) Liabilities of the Seller for all accrued vacation and
sick time of all Business Employees;

(ix) Liabilities of the Seller arising from discharges or
releases of Hazardous Materials and other Hazardous Material Activities,
violations of Environmental Laws or similar matters to the extent such
Liabilities are related to the operations of the Business; and

(x) Liabilities under any collective bargaining agreements
relating to the Business, including, without limitation, all employee benefit
plans or other arrangements required under any collective bargaining agreement
or otherwise negotiated with the union that is a party thereto.

(c) Definition of Excluded Liabilities. Except for the Assumed
Liabilities, the Purchaser shall not assume any Liabilities of the Seller
(collectively, the "Excluded Liabilities"). Notwithstanding anything to the
contrary set forth in this Section 2.2 or elsewhere in this Agreement, the term
"Assumed Liabilities" shall not mean, refer to or include (and, therefore, the
"Excluded Liabilities" shall include) the following:

(i) Liabilities of the Seller under any Benefit Plan which is
not an Assumed Plan;

(ii) Liabilities for Income Taxes of the Seller or of any other
Person required to be paid by the Seller pursuant to Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise;

(iii) Liabilities of the Seller in respect of transaction costs
payable by the Seller pursuant to Section 6.8 hereof or any other provision of
this Agreement;

(iv) Liabilities not primarily arising out of or relating to
the operation of the Business;

(v) Liabilities of the Seller under any Material Business
Contract or Material Business License that is not set forth in Schedule 4.7(a)
or Schedule 4.8 hereto, respectively, other than those permitted to be incurred
pursuant to Section 6.1 hereof and those under which the Purchaser accepts any
benefits pursuant to this Agreement and doesn't notify the Seller in writing
within thirty (30) calendar days following the Closing that it has rejected such
Material Business Contract or Material Business License;

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<PAGE> 11

(vi) Actions brought by or on behalf of any shareholder,
officer or director of the Seller;

(vii) Actions against the Seller based upon any claims reported
as of the Closing Date under Seller's general liability, excess liability or
automobile insurance policies to the extent (but only to the extent) that (x)
Seller is insured for such claims and actually receives insurance proceeds in
respect of such liability, and (y) the Purchaser is unable to enforce such
insurance policies with respect to such Actions; and

(viii) Liabilities not directly relating to the Business and
arising under (A) that certain Agreement and Plan of Merger and Reorganization,
dated as of June 28, 1995, by and between The Chronicle Publishing Company, a
Nevada corporation incorporated on January 23, 1906, and Tele-Communications,
Inc., a Delaware corporation, or (B) that certain Contribution and Assumption
Agreement, dated as of March 29, 1996, by and between The Chronicle Publishing
Company, a Nevada corporation incorporated on January 23, 1906, and the Seller.

2.3 Consideration for Purchased Assets.

(a) Consideration. Subject to Section 2.3(b) hereof, the purchase
price (the "Purchase Price") for the Purchased Assets shall be (i) $180 million
in cash (the "Cash Payment"), and (ii) the assumption by the Purchaser of the
Assumed Liabilities pursuant to Section 2.2 hereof.

(b) Working Capital Adjustment.

(i) For all purposes of and under this Agreement, the term
"Working Capital" shall mean (i) the value of the Seller's current assets
included within the Purchased Assets, minus (ii) the value of the Seller's
current liabilities included within the Assumed Liabilities, each calculated as
of the Closing to the extent practicable in accordance with GAAP applied in a
manner consistent with the preparation of the Financial Statements.

(ii) As promptly as practicable, but in any event within ninety
(90) calendar days following the Closing, the Seller shall cause to be prepared
and delivered to the Purchaser a statement (the "Statement of Working Capital")
setting forth the Working Capital as of the Closing (the "Closing Working
Capital").

(iii) Subject to Section 2.3(b)(iv) hereof, within forty-five
(45) calendar days following delivery of the Statement of Working Capital
pursuant to Section 2.3(b)(ii) hereof, (A) the Seller shall pay to the Purchaser
the amount of any negative Closing Working Capital reflected in the Statement of
Working Capital, or (B) the Purchaser shall pay to the Seller the amount of any
positive Closing Working Capital reflected in the Statement of Working Capital.
Any and all payments made pursuant to this Section 2.3(b)(iii) shall be made by
wire transfer of immediately available funds to an account designated in writing
by the party to receive such payment. Any payment made pursuant to this Section
2.3(b)(iii) shall be deemed to be an adjustment to the Purchase Price.

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(iv) If the Purchaser disagrees in good faith with the
Statement of Working Capital, then the Purchaser shall notify the Seller in
writing (the "Notice of Disagreement") of such disagreement within forty-five
(45) calendar days following delivery of the Statement of Working Capital. The
Notice of Disagreement shall set forth in reasonable detail the basis for the
disagreement described therein. Thereafter, the Seller and the Purchaser shall
attempt in good faith to resolve and finally determine the amount of the Closing
Working Capital. If the Seller and the Purchaser are unable to resolve the
disagreement within thirty (30) calendar days following delivery of the Notice
of Disagreement, then the Seller and the Purchaser shall select a mutually
acceptable, nationally recognized independent accounting firm that does not then
have a relationship with the Seller or the Purchaser, or either of their
respective Affiliates (the "Independent Accountant"), to resolve the
disagreement and make a determination with respect thereto. Such determination
will be made, and written notice thereof given to the Seller and the Purchaser,
within thirty (30) calendar days after such selection. The determination by the
Independent Accountant shall be final, binding and conclusive upon the Seller
and the Purchaser. The scope of the Independent Accountant's engagement (which
will not be an audit) shall be limited to the resolution of the disputed items
described in the Notice of Disagreement, and the recalculation, if any, of the
Statement of Working Capital in light of such resolution. If an Independent
Accountant is engaged pursuant to this Section 2.3(b)(iv), the fees and expenses
of the Independent Accountant shall be borne equally by the Seller and the
Purchaser. Within ten (10) calendar days after delivery of a notice of
determination by the Independent Accountant as described above, any payment
required by Section 2.3(b)(iii) hereof shall be made, based on such
determination.

(c) Allocation of Purchase Price. For all purposes (including Tax
and financial accounting purposes), (i) the portion of the Purchase Price
attributable to those Purchased Assets which are current assets (as
characterized in accordance with GAAP applied in a manner consistent with the
preparation of the Financial Statements) shall be allocated in a manner
consistent with the determination of the Closing Working Capital, and (ii) the
portion of the Purchase Price attributable to those Purchased Assets which are
fixed assets (as characterized in accordance with GAAP applied in a manner
consistent with the preparation of the Financial Statements) shall be allocated
$500,000 to land, $2,000,000 to buildings and $5,000,000 to machinery and
equipment (including, without limitation, computer and other office equipment,
furniture and vehicles). With respect to the portion of the Purchase Price
attributable to those Purchased Assets which are other assets (as characterized
in accordance with GAAP applied in a manner consistent with the preparation of
the Financial Statements), the parties shall, as promptly as practicable
following the execution hereof, enter into good-faith negotiations regarding a
mutually agreeable allocation of such portion of the Purchase Price. In the
event that the parties are unable to agree by November 15, 1999 on an allocation
of the portion of the Purchase Price attributable to the other assets which are
Purchased Assets, then the parties agree to rely on an appraisal of the other
assets which are Purchased Assets by a mutually acceptable independent
nationally recognized firm of newspaper valuation experts. The cost of such
appraisal shall be borne equally by the parties, shall be obtained no later than
December 15, 1999, and shall be conclusive and binding on the parties for
purposes of this Section 2.3(c). Notwithstanding any other provision hereof, the
allocation of the Purchase Price pursuant to this Section 2.3(c) shall be
consistent with Section 1060 of the Internal Revenue Code. The

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Purchaser and the Seller (i) shall execute and file all Tax Returns and prepare
all financial statements, returns and other instruments in a manner consistent
with the allocation determined pursuant to this Section 2.3(c), (ii) shall not
take any position before any Governmental Authority or in any judicial
proceeding that is inconsistent with such allocation, and (iii) shall cooperate
with each other in a timely filing, consistent with such allocation, of Form
8594 with the IRS. In the event that any Governmental Authority makes or
proposes to either party hereto an allocation of the Purchase Price which
differs from that agreed upon by the parties pursuant to this Section 2.3(c),
the other party hereto shall reasonably cooperate with the contesting party in
contesting the Governmental Authority's determination.

2.4 Further Assurances. At and after the Closing, and without further
consideration therefor, (i) the Seller shall execute and deliver to the
Purchaser such further instruments and certificates of conveyance and transfer
as the Purchaser may reasonably request in order to more effectively convey and
transfer the Purchased Assets to the Purchaser and to put the Purchaser in
operational control of the Business, or for aiding, assisting, collecting and
reducing to possession any of the Purchased Assets and exercising rights with
respect thereto, and (ii) the Purchaser shall execute and deliver to the Seller
such further instruments and certificates of assumption, novation and release as
the Seller may reasonably request in order to effectively make the Purchaser
responsible for all Assumed Liabilities and, to the extent not inconsistent with
this Agreement, release the Seller therefrom to the fullest extent permitted
under applicable Law.

2.5 Nontransferable Business Contracts and Business Licenses. To the
extent that transfer or assignment hereunder by the Seller to the Purchaser of
any Business Contract or Business License is not permitted or is not permitted
without the consent of another Person (each such Business Contract and Business
License that is a Material Business Contract and Material Business License being
set forth in Schedule 2.5 hereto), this Agreement shall not be deemed to
constitute an undertaking to assign the same if such consent is not given or if
such an undertaking otherwise would constitute a breach thereof or cause a loss
of benefits thereunder. The Seller shall use all commercially reasonable efforts
to obtain any and all such third party consents under all Material Business
Contracts and Material Business Licenses; provided, however, that the Seller
shall not be required to pay or incur any cost or expense to obtain any third
party consent that the Seller is not otherwise required to pay or incur in
accordance with the terms of the applicable Material Business Contract or
Material Business License. If any such third party consent is not obtained
before the Closing, the Seller shall cooperate with the Purchaser in any
reasonable arrangement designed to provide to the Purchaser after the Closing
the benefits under the applicable Business Contract or Business License.

ARTICLE III.
THE CLOSING

3.1 The Closing. The consummation of the transactions contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
California time, on the later of (i) January 5, 2000, or (ii) a date to be
designated by the Seller and the Purchaser, which date shall be no later than
the second (2nd) Business Day after satisfaction and fulfillment or, if
permissible

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<PAGE> 14

pursuant to the terms hereof, waiver of the conditions set forth in
Article VII hereof (the "Closing Date"), at the offices of Latham & Watkins, 505
Montgomery Street, Suite 1900, San Francisco, California 94111, unless another
time, date or place is mutually agreed upon in writing by the Seller and the
Purchaser.

3.2 Closing Deliveries of the Seller. At the Closing, the Seller shall
deliver, or cause to be delivered, to the Purchaser the following instruments,
certificates and other documents, dated as of the Closing Date and executed on
behalf of the Seller by a duly authorized officer thereof, in order to effect
the transfer of the Purchased Assets to the Purchaser pursuant to Section 2.1
hereof:

(a) Instruments of Transfer and Assignment.

(i) A grant deed or deeds, as the case may be, in substantially
the form attached hereto as Exhibit A (the "Grant Deeds"), conveying good and
marketable fee simple title to all of the Owned Real Property, free and clear of
all Encumbrances other than Permitted Encumbrances, together with appropriate
certificates of occupancy, to the extent applicable, with respect to the Owned
Real Property (it being expressly acknowledged and agreed that the Seller and
the Purchaser shall share equally in the cost of obtaining policies insuring
title to the Owned Real Property for the benefit of the Purchaser);

(ii) a Bill of Sale substantially in the form attached hereto
as Exhibit B (the "Bill of Sale") conveying good title, free and clear of all
Encumbrances other than Permitted Encumbrances, to the tangible personal
property set forth on Schedule A to the Bill of Sale;

(iii) an Instrument of Assignment and Assumption substantially
in the form attached hereto as Exhibit C (the "Assignment and Assumption");

(iv) an Assignment of Proprietary Rights substantially in the
form attached hereto as Exhibit D (the "Assignment of Proprietary Rights");

(v) copies of all instruments, certificates, documents and
other filings (if applicable) necessary to release the Purchased Assets from all
Encumbrances other than Permitted Encumbrances and those Encumbrances set forth
in Schedule 4.5(b) hereto, all in a form reasonably satisfactory to counsel for
the Purchaser;

(vi) copies of all requisite Licenses, waivers, consents,
approvals, authorizations, qualifications and other orders of any Governmental
Authorities with competent jurisdiction over the transactions contemplated
hereby to be obtained by the Seller which are necessary to effect the valid
transfer and assignment of the Purchased Assets to the Purchaser pursuant to
this Agreement and to otherwise consummate the transactions contemplated hereby,
and those consents, approvals or waivers from third parties (i) under Business
Contracts and Business Licenses that are obtained prior to Closing, (ii) as set
forth under subsections (i) and (ii) of Schedule 4.3 hereto, and (iii) which are
necessary to effect the valid transfer and assignment of the Purchased Assets
(but other than consents, approvals or waivers under Business Contracts

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<PAGE> 15

and Business Licenses) to the Purchaser pursuant to this Agreement and to
otherwise consummate the transactions contemplated hereby; and

(vii) all other instruments and certificates of conveyance and
transfer as the Purchaser may reasonably request in order to more effectively
convey and transfer the Purchased Assets to the Purchaser and to put the
Purchaser in operational control of the Business, or for aiding, assisting,
collecting and reducing to possession any of the Purchased Assets and exercising
rights with respect thereto.

(b) Closing Certificates and Other Documents.

(i) An officer's certificate substantially in the form attached
hereto as Exhibit E;

(ii) a secretary's certificate substantially in the form
attached hereto as Exhibit F;

(iii) a certificate of the Seller certifying as to its
non-foreign status which complies with the requirements of Section 1445 of the
Internal Revenue Code;

(iv) waivers, in form and substance reasonably satisfactory to
the Purchaser, duly executed by each of the lenders described in Schedule 4.3
hereto pursuant to which each such lender (x) consents to the performance of the
Seller's obligations hereunder and the consummation of the transactions
contemplated hereby, and (y) waives any conflict with, breach or other violation
of, either of the agreements set forth in Schedule 4.3 hereto which may result
from the performance of the Seller's obligations hereunder or the consummation
of the transactions contemplated hereby; and

(v) any other documents and instruments relating to the
existence of the Seller, and the authority of the Seller to enter into and
perform its obligations under this Agreement and consummate the transactions
contemplated hereby reasonably requested by the Purchaser, all in form and
substance reasonably satisfactory to the Purchaser.

(i) A legal opinion of Latham & Watkins, outside counsel for
the Seller, substantially in the form attached hereto as Exhibit G; and

(ii) a legal opinion of W. Ronald Ingram, general counsel of
the Seller, substantially in the form attached hereto as Exhibit H.

3.3 Closing Deliveries of the Purchaser. At the Closing, the Purchaser
shall deliver, or cause to be delivered, to the Seller the following
instruments, certificates and other documents, dated as of the Closing Date and
executed or acknowledged (as applicable) on behalf of the Purchaser by a duly
authorized officer thereof, in order to pay for the Purchased Assets

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<PAGE> 16

and effect the assumption of all Assumed Liabilities from the Seller pursuant
to Section 2.2 hereof:

(a) Cash Payment. An amount in cash equal to the Cash Payment,
which shall be made by wire transfer of immediately available funds to an
account designated in writing by the Seller at least two (2) Business Days prior
to the Closing Date.

(b) Instruments of Assumption.

(i) The Bill of Sale;

(ii) the Assignment and Assumption;

(iii) the Assignment of Proprietary Rights; and

(iv) all other instruments and certificates of assumption,
novation and release as the Seller may reasonably request in order to
effectively make the Purchaser responsible for all Assumed Liabilities and, to
the extent not inconsistent with this Agreement, release the Seller therefrom to
the fullest extent permitted under applicable Law.

(i) An officer's certificate substantially in the form attached
hereto as Exhibit I;

(ii) a secretary's certificate substantially in the form
attached hereto as Exhibit J; and

(iii) any other documents and instruments relating to the
existence of Purchaser, and the authority of the Purchaser to enter into and
perform its obligations under this Agreement and consummate the transactions
contemplated hereby reasonably requested by the Seller, all in form and
substance reasonably satisfactory to the Seller.

(d) Legal Opinion. A legal opinion of Fulbright & Jaworski, LLP
outside counsel for the Purchaser, substantially in the form attached hereto as
Exhibit K.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Purchaser as follows:

4.1 Organization. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, and has all
requisite corporate power and authority to own, operate or lease the assets and
properties now owned, operated or leased by it, and to conduct the Business as
presently conducted by the Seller. The Seller is duly authorized, qualified or
licensed to do business as a foreign corporation, and is in good standing, under
the

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Laws of each state or other jurisdiction in which the character of its
properties owned, operated or leased, or the nature of its activities, makes
such qualification or licensing necessary, except in those states and
jurisdictions where the failure to be so qualified or in good standing would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. True and complete copies of the Articles of Incorporation (the
"Seller Articles of Incorporation") and Bylaws (the "Seller Bylaws") of the
Seller, each as amended and in effect as of the date of this Agreement, have
been made available to the Purchaser and its agents and representatives.

4.2 Authority. The Seller has all requisite corporate power and
authority to enter into and deliver this Agreement and the Seller Documents, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by the
Seller of this Agreement and the Seller Documents, the performance by the Seller
of its obligations hereunder and thereunder, and the consummation by the Seller
of the transactions contemplated hereby and thereby, have been duly authorized
by all necessary corporate action on the part of the Seller. This Agreement has
been duly executed and delivered by the Seller and, assuming the due
authorization, execution and delivery of this Agreement by the Purchaser, this
Agreement constitutes a legally valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by principles of public policy, and subject to (i)
the effect of any applicable Laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or similar Laws affecting creditors'
rights and relief of debtors generally, and (ii) the effect of rules of law and
general principles of equity, including, without limitation, rules of law and
general principles of equity governing specific performance, injunctive relief
and other equitable remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Upon the execution and delivery
of the Seller Documents by the Seller at the Closing and, assuming the due
authorization, execution and delivery of the Assignment and Assumption by the
Purchaser, each of the Seller Documents will constitute a legally valid and
binding obligation of the Seller, enforceable against the Seller in accordance
with its respective terms, except as such enforceability may be limited by
principles of public policy, and subject to (i) the effect of any applicable
Laws of general application relating to bankruptcy, reorganization, insolvency,
moratorium or similar Laws affecting creditors' rights and relief of debtors
generally, and (ii) the effect of rules of law and general principles of equity,
including, without limitation, rules of law and general principles of equity
governing specific performance, injunctive relief and other equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

4.3 No Violation; Third Party Consents. Assuming that all consents,
waivers, approvals, orders and authorizations set forth in Schedule 4.4 hereto
have been obtained and all registrations, qualifications, designations,
declarations or filings with any Governmental Authorities set forth in Schedule
4.4 hereto have been made, and except as set forth in Schedule 4.3 hereto, the
execution and delivery by the Seller of this Agreement and the Seller Documents,
the performance by the Seller of its obligations hereunder and thereunder, and
the consummation by the Seller of the transactions contemplated hereby and
thereby, will not conflict with or violate in any material respect, constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a material default) under, give rise to any right of

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<PAGE> 18

termination, amendment, modification, acceleration or cancellation of any
material obligation or loss of any material benefit under, result in the
creation of any Encumbrance other than a Permitted Encumbrance on any of the
Purchased Assets pursuant to, or require the Seller to obtain any consent,
waiver, approval or action of, make any filing with, or give any notice to any
Person as a result or under, the terms and provisions of (i) the Seller Articles
of Incorporation or the Seller Bylaws, (ii) any material Contract to which the
Seller is a party or by which any of the Purchased Assets is bound, or (iii) any
Law applicable to the Seller or any of the Purchased Assets, or any Governmental
Order issued by a Governmental Authority by which the Seller or any of the
Purchased Assets is in any way bound or obligated, except, in the case of
clauses (ii) and (iii) of this Section 4.3, as would not, individually or in the
aggregate, have a Material Adverse Effect.

4.4 Government Consents. No consent, waiver, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of the Seller in
connection with the execution and delivery by the Seller of this Agreement and
the Seller Documents, the performance by the Seller of its obligations hereunder
and thereunder, and the consummation by the Seller of the transactions
contemplated hereby and thereby, including, without limitation, the sale and
transfer of the Purchased Assets and transferable Business Licenses to the
Purchaser, except (i) as set forth in Schedule 4.4 hereto, and (ii) where the
failure to obtain such consent, waiver, approval, order or authorization, or to
make such registration, qualification, designation, declaration or filing, would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

4.5 Tangible Property.

(a) Schedule 4.5(a) hereto contains a true, correct and complete
list of the following to the extent owned, used or held for use by the Seller
primarily to conduct the operations of the Business: (i) each parcel of real
property owned, as of the date hereof, by the Seller ("Owned Real Property"),
(ii) each parcel of real property leased from or to a third party, as of the
date hereof, by the Seller ("Leased Real Property"), the name of the third party
lessor(s) or lessee(s) thereof, as the case may be, the date of the lease
contract relating thereto and all amendments thereof, and (iii) all fixed assets
owned or leased by the Seller, as reflected in the Seller's schedule of fixed
assets prepared in the ordinary course of business as of the date set forth
therein. Except as set forth in Schedule 4.5(a) hereto, the Seller does not own,
or have a contractual obligation to purchase or otherwise acquire any material
interest in, any parcel of real property which would be used or held for use
primarily in the operation of the Business. All of the tangible assets and
properties used by the Seller pursuant to a lease or license included among the
Purchased Assets shall be referred to herein, collectively, as "Leased Assets."

(b) The Seller has good and marketable fee simple title to all of
the Owned Real Property, free and clear of all Encumbrances other than Permitted
Encumbrances and those Encumbrances set forth on Schedule 4.5(b) hereto. The
Seller has good title to all of the tangible personal Purchased Assets purported
to be owned by the Seller, free and clear of all Encumbrances other than
Permitted Encumbrances and those Encumbrances set forth on Schedule 4.5(b)
hereto.

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4.6 Intellectual Property and Proprietary Rights.

(a) Schedule 4.6(a) hereto contains a true, correct and complete
list of all material Intellectual Property owned by the Seller as of the date
hereof, to the extent such Intellectual Property is related primarily to the
operations of the Business. A true and complete copy of all material
documentation relating to each item of Intellectual Property set forth in
Schedule 4.6(a) hereto has been made available to the Purchaser and its agents
and representatives.

(b) Except as set forth on Schedule 4.6(b) hereto, the Seller owns
or has a valid right to use all Proprietary Rights used by the Seller to conduct
the operations of the Business as currently conducted by the Seller (including,
without limitation, the Intellectual Property set forth in Schedule 4.6(a)
hereto) without infringing upon the rights of any other Person, except as would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. To the knowledge of the Seller, no other Person is infringing
upon the rights of the Seller in or to any of the Intellectual Property set
forth in Schedule 4.6(a) hereto, except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

4.7 Business Contracts.

(a) Schedule 4.7(a) hereto contains a list of each Business
Contract (whether written or oral and including all amendments thereto) to which
the Seller is a party or by which the Seller or any of the Purchased Assets is
bound as of the date hereof, which is material to the Business, the Purchased
Assets or the Assumed Liabilities (each, a "Material Business Contract" and,
collectively, the "Material Business Contracts"), including, without limitation,
the following: (i) leases relating to all Leased Real Property; (ii) capital or
operating leases or conditional sales agreements relating to any Purchased
Assets (other than Short Term Agreements), in each case involving monthly
payments in excess of $5,000; (iii) noncompetition or other agreements
restricting the ability of the Seller to engage in the Business in any location;
(iv) employment, consulting, separation, collective bargaining or other labor
agreements; and (v) agreements under which the Seller is obligated to indemnify,
or entitled to indemnification from, any other Person, other than any agreement
that requires indemnification solely in connection with or as a result of a
breach of such agreement. For purposes of this Agreement, any Short Term
Agreement or any Business Contract to which the Seller is a party and which
obligates the Seller to pay less than $100,000 in annual payments shall be
deemed not to be a Material Business Contract, and any Business Contract (other
than Short Term Agreements) to which the Seller is a party and which obligates
the Seller to pay more than $100,000 in annual payments shall be deemed to be a
Material Business Contract. For all purposes of and under this Agreement, the
term "Short Term Agreement" shall mean an agreement entered into in the ordinary
course of business that is terminable by the Seller upon ninety (90) days or
less notice without penalty.

(b) The Seller has made available to the Purchaser and its agents
and representatives a copy of each written Material Business Contract and a
written summary of each

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<PAGE> 20

oral Material Business Contract. Except as set forth in Schedule 4.7(b) hereto,
(i) each Material Business Contract is in full force and effect and represents a
valid, binding and enforceable obligation of the Seller in accordance with the
respective terms thereof and, to the knowledge of the Seller, represents a
valid, binding and enforceable obligation of each of the other parties thereto;
and (ii) there exists no material breach or material default (or event that with
notice or the lapse of time, or both, would constitute a material breach or
material default) on the part of the Seller or, to the knowledge of the Seller,
on the part of any other party under any Material Business Contract, in any case
which has had or could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.

4.8 Business Licenses. The Seller owns or possesses all right, title
and interest in and to all Licenses which are necessary to conduct the Business
as conducted by the Seller as of the date hereof, except for such Licenses which
the failure to obtain or possess would not, individually or in the aggregate,
have a Material Adverse Effect (each, a "Material Business License" and,
collectively, the "Material Business Licenses"). Schedule 4.8 hereto contains a
list of all Material Business Licenses in effect as of the date hereof. No loss
or expiration of any Material Business License is pending or, to the knowledge
of the Seller, threatened, other than the expiration of any Material Business
Licenses in accordance with the terms thereof which may be renewed in the
ordinary course of business.

4.9 Business Employees. Schedule 4.9 hereto contains a true, correct
and complete list of all employees of the Seller who, as of the date of this
Agreement, have employment duties principally related to the Business, including
(and designating as such) any such employee who is an inactive employee on paid
or unpaid leave of absence, and indicating date of employment, current title and
compensation. Each employee set forth in Schedule 4.9 hereto who remains
employed by the Seller immediately prior to the Closing (whether actively or
inactively), and each additional employee who is hired to work primarily in the
Business following the date hereof and prior to the Closing who remains employed
by the Seller immediately prior to the Closing (whether actively or inactively),
shall be referred to herein individually as a "Business Employee" and,
collectively, as "Business Employees."

4.10 Tax Matters.

(a) With respect to Taxes, other than Income Taxes, relating to the
Business, (i) the Seller has filed all material Tax Returns which it has been
required to file (taking into account all extensions) through and including the
date hereof, and all such Tax Returns were properly and accurately compiled and
completed, fairly presented the information purported to be shown therein and
correctly reflected all of the Seller's Liabilities for Taxes for the periods
covered by such Tax Returns in all material respects, (ii) all material Taxes
owed by the Seller (whether or not shown on any Tax Return) have been fully and
timely paid and (iii) except as set forth in Schedule 4.10 hereto, there is not
currently pending any dispute or claim concerning any Tax Liability of the
Seller either claimed or raised by any Governmental Authority in writing or of
which the Seller has knowledge. There are no liens on any of the Purchased
Assets which arose in connection with any failure (or alleged failure) by the
Seller to pay any Taxes, other than Taxes which are not yet due and payable or
which are being contested in good faith through

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appropriate proceedings and for which adequate reserves are reflected on the
Latest Balance Sheet.

(b) The Seller has made available to the Purchaser correct and
complete copies of all Tax Returns (other than Income Tax Returns) related to
the Business filed by, and all examination reports and statements of
deficiencies in Taxes (other than Income Taxes) related to the Business assessed
against or agreed to by, the Seller since January 1, 1994. Except as otherwise
set forth in Schedule 4.10 hereto, the Seller has not waived any statute of
limitations in respect of the assessment and collection of Taxes (other than
Income Taxes) or agreed to any extension of time with respect to a Tax (other
than Income Tax) assessment or deficiency. The Seller is not currently the
beneficiary of any extension of time within which to file any Tax (other than an
Income Tax) Return.

4.11 Employee Benefit Plans.

(a) Schedule 4.11(a) hereto contains a true, correct and complete
list of each employment, bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, equity (or equity-based),
leave of absence, layoff, vacation, day or dependent care, legal services,
cafeteria, life, health, medical, accident, disability, workmen's compensation
or other insurance, severance, separation, termination, change of control or
other benefit plan, agreement (including any collective bargaining agreement),
practice, policy or arrangement, whether written or oral, and whether or not
subject to ERISA (including, without limitation, any "employee benefit plan"
within the meaning of Section 3(3) of ERISA), which the Seller sponsors,
maintains, has any obligation to contribute to, has Liability under or is
otherwise a party to as of the date hereof, and which covers or otherwise
provides benefits to any Business Employees or former Business Employees (or
their dependents and beneficiaries) (with respect to their relationship with the
Business) (each, a "Benefit Plan" and, collectively, the "Benefit Plans").

(b) Except as set forth in Schedule 4.11(b) hereto:

(i) each of the Assumed Plans, the Seller 401(k) Plan and the
Seller DB Plan presently complies and has been operated in compliance in all
material respects with its terms and all applicable Laws, including, without
limitation, all tax rules for which favorable tax treatment is intended;

(ii) each of the Assumed Plans, the Seller 401(k) Plan and the
Seller DB Plan which is intended to be tax-qualified under Section 401(a) of the
Internal Revenue Code has been determined by the IRS to be so qualified and, to
the knowledge of the Seller, no circumstances have occurred that would adversely
affect the tax-qualified status of any such Assumed Plan;

(iii) with respect to each of the Assumed Plans, the Seller
401(k) Plan and the Seller DB Plan, true, correct, and complete copies of the
applicable following documents have been made available to the Purchaser and its
agents and representatives: (A) all current plan documents and related trust
documents, and any amendments thereto; (B) Forms 5500, financial

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statements, and actuarial reports for the most recent plan year; (D) the most
recently issued IRS determination letter; and (d) summary plan descriptions; and

(iv) neither the Seller, nor any entity required to be
aggregated with the Seller or any Subsidiary thereof (as defined under Sections
414(b), 414(c), 414(m) or 414(o) of the Internal Revenue Code or Section 4001 of
ERISA) has incurred any withdrawal liability that has not been satisfied with
respect to any "multiemployer plan" (as defined in Section 3(37) of ERISA).

(c) Except as set forth in Schedule 4.11(c) hereto, the execution
and delivery by the Seller of this Agreement and the Seller Documents, the
performance by the Seller of its obligations hereunder and thereunder, and the
consummation by the Seller of the transactions contemplated hereby and thereby,
does not and will not result in the acceleration or creation of any rights or
benefits of any current or former Business Employee (or other current or former
service provider to the Business) that would not have been required but for the
transactions contemplated by this Agreement.

4.12 Sufficiency of Purchased Assets.

(a) The Purchased Assets (including the licenses or leasehold
interests in or relating to the Leased Assets) constitute all of the assets,
properties and rights necessary for the conduct of the Business by the Seller in
a manner consistent with past practice.

(b) The Owned Real Property and tangible personal property
included in the Purchased Assets or the Leased Assets are in good condition and
repair (ordinary wear and tear excepted) for property of comparable type, age
and usage, except for tangible personal property that is obsolete and no longer
used in the Business.

4.13 Financial Statements.

(a) Attached to Schedule 4.13(a) hereto is a true, correct and
complete copy of the following financial statements (collectively, the
"Financial Statements"): (i) the unaudited statement of assets and liabilities
of the Business (the "Latest Balance Sheet") as of July 31, 1999 (the "Latest
Balance Sheet Date"), and the related unaudited statements of revenues and
expenses for the seven (7) month period then ended, and (ii) the unaudited
statement of assets and liabilities of the Business as of December 31, 1998, and
the related unaudited statements of revenues and expenses for the year then
ended. Each of the Financial Statements is derived from the books and records of
the Seller (which are accurate and complete in all material respects) and the
audited consolidated financial statements of the Seller (which were prepared in
accordance with GAAP), and fairly present, in all material respects, the assets
and the Liabilities of the Seller that primarily relate to, or primarily arise
out of, the Business as of the respective dates thereof, and the results of
operations of the Business for the respective periods then ended.

(b) Except as set forth in Schedule 4.13(b) hereto, no reserves
or other Liabilities attributable to the Business were recorded in the
consolidated financial statements of

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the Seller as of July 31, 1999 and December 31, 1998, respectively, that are
not reflected in the Financial Statements.

4.14 No Undisclosed Liabilities. The Seller has no Liabilities that are
attributable to the Business other than (i) the Liabilities reflected on the
Latest Balance Sheet, (ii) Liabilities incurred in the ordinary course of
business and consistent with past practices after the Latest Balance Sheet Date,
none of which is material to the assets, properties, business, results of
operations or condition (financial or otherwise) of the Business, (iii)
Liabilities set forth in Schedule 4.14 hereto, and (iv) Liabilities that have
not had and would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.

4.15 Subsidiaries and Investments. The Seller does not have any
Subsidiaries, and does not own any direct or indirect equity or debt interest in
any other Person, including, without limitation, any interest in a corporation,
partnership or joint venture, and is not obligated or committed to acquire any
such interest, in any case which Subsidiary, interest or other Person relates
primarily to the Business.

4.16 Litigation; Governmental Orders.

(a) Except as set forth in Schedule 4.16 hereto, as of the date
hereof, there are no pending or, to the knowledge of the Seller, threatened
Actions by any Person or Governmental Authority against or relating to the
Seller with respect to the Business or any Assumed Plan or, to the knowledge of
the Seller, any current or former employees (in their capacity as such) of the
Seller, or to which any of the Purchased Assets are subject, other than those
which would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

(b) The Seller is not subject to or bound by any Governmental Order
other than those which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

4.17 Compliance with Laws. Except as set forth in Schedule 4.17 hereto,
to the knowledge of the Seller, the Seller is in compliance with, and the Seller
has never received any claim or notice that it is not in compliance with, each
Law or Governmental Order applicable to the Business, except as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

4.18 Environmental Matters. Except as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, (i) no
Hazardous Material is present at any of the Owned Real Property or Leased Real
Property in violation of any applicable Environmental Law, (ii) during the
course of its operation of the Business, the Seller has not engaged in any
Hazardous Materials Activity in violation of any applicable Environmental Law,
(iii) as of the date hereof, no Action is pending or, to the knowledge of the
Seller, has been threatened in writing against the Seller concerning any of the
Owned Real Property or Leased Real Property, or any of the Hazardous Materials
Activities of the Seller taken during the course of its operation of the
Business, (iv) the Seller has operated the Business

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<PAGE> 24

in compliance with all applicable limitations, restrictions, conditions,
standards, prohibitions, requirements and obligations of Environmental Laws and
related Governmental Orders, and (v) all Licenses, permits, consents, or other
approvals required under Environmental Laws that are necessary to the operation
of the Business have been obtained and are in full force and effect.

4.19 Insurance.

(a) Schedule 4.19 hereto contains a true, correct and complete list
(specifying the insurer, the policy number or covering note number with respect
to binders and the limits, and the aggregate limit, if any, of the insurer's
liability thereunder) of all policies or binders of fire, liability, errors and
omissions, workers' compensation, vehicular, and other insurance held by or on
behalf of the Seller with respect to the Business as of the date hereof
("Business Insurance Policies").

(b) All of the Business Insurance Policies are in full force and
effect. The Seller is not in default with respect to any material provision
contained in any such Business Insurance Policy, nor has the Seller failed to
give any notice or present any claim under any such Business Insurance Policy in
due and timely fashion. The Seller has not received any notice of cancellation
or non-renewal of any such Business Insurance Policy. The Seller has not
received any notice from any of its insurance carriers that any premiums will be
materially increased in the future or that any insurance coverage under the
Business Insurance Policies will not be available in the future on substantially
the same terms as now in effect.

(c) All of the Business Insurance Policies in the name of the
Seller with respect to libel (all of which are identified on Schedule 4.19) will
be in full force and effect, and enforceable by the Purchaser, following the
consummation of the transactions contemplated by this Agreement in respect of
all reported or unreported libel claims arising out of occurrences prior to the
Closing.

(d) Seller will maintain all of the Business Insurance Policies set
forth on Schedule 4.19 hereto, and the workers' compensation insurance policy
referenced in Section 2.2(b)(vii) hereof, in full force and effect through and
including the Closing Date in respect of all matters occurring prior to the
Closing.

4.20 Transactions with Affiliates. Except as set forth in Schedule 4.20
hereto, since January 1, 1999, no shareholder, officer, director or employee of
the Seller or any of its Affiliates, or any immediate family member of any of
the foregoing, has (a) borrowed money from, or loaned money to, the Business
which remains outstanding, (b) except as set forth in Schedule 4.11(a) hereto,
any contractual or other claim, express or implied, of any kind whatsoever
against the Business, (c) any interest in any of the Purchased Assets, or (d)
engaged in any other transaction with the Business other than in such person's
capacity as an employee, officer or director of the Seller.

4.21 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Seller directly
with the Purchaser without the intervention of any Person on behalf of the
Seller in such manner as to give rise to any valid

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<PAGE> 25

claim by any Person against the Purchaser for a finder's fee, brokerage
commission or similar payment, other than Donaldson, Lufkin & Jenrette
Securities Corporation, whose fees and expenses shall be borne by the Seller.

4.22 Absence of Certain Changes. Except as contemplated by, or
disclosed in, this Agreement, since July 31, 1999, there has been no change or
effect in the assets, properties, operations, liabilities, business, condition
(financial or otherwise) or results of operations of the Business, that has had
or would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

4.23 Year 2000. The Seller has made available to the Purchaser and its
agents and representatives disclosure regarding the Business's state of
readiness, remediation plans and related expenditures relating to what is
commonly referred to as the "Year 2000 problem," and such disclosure is true,
correct and complete in all material respects.

ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller as follows:

5.1 Organization. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.

5.2 Authority. The Purchaser has all requisite corporate power and
authority to enter into and deliver this Agreement and the Assignment and
Assumption, to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Purchaser of this Agreement and the Assignment and Assumption,
the performance by the Purchaser of its obligations hereunder and thereunder,
and the consummation by the Purchaser of the transactions contemplated hereby
and thereby, have been duly authorized by all necessary corporate action on the
part of the Purchaser. This Agreement has been duly executed and delivered by
the Purchaser and, assuming the due authorization, execution and delivery of
this Agreement by the Seller, this Agreement constitutes a legally valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by
principles of public policy, and subject to (i) the effect of any applicable
Laws of general application relating to bankruptcy, reorganization, insolvency,
moratorium or similar Laws affecting creditors' rights and relief of debtors
generally, and (ii) the effect of rules of law and general principles of equity,
including, without limitation, rules of law and general principles of equity
governing specific performance, injunctive relief and other equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Upon the execution and delivery of the Assignment and
Assumption by the Purchaser at the Closing and, assuming the due authorization,
execution and delivery thereof by the Seller, the Assignment and Assumption will
constitute a legally valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such
enforceability may be limited by principles of public policy, and subject to (i)
the effect of any applicable Laws of general

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<PAGE> 26

application relating to bankruptcy, reorganization, insolvency, moratorium or
similar Laws affecting creditors' rights and relief of debtors generally, and
(ii) the effect of rules of law and general principles of equity, including,
without limitation, rules of law and general principles of equity governing
specific performance, injunctive relief and other equitable remedies (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

5.3 No Violation. Assuming that all consents, waivers, approvals,
orders and authorizations set forth in Schedule 4.4 hereto have been obtained
and all registrations, qualifications, designations, declarations or filings
with any Governmental Authorities set forth in Schedule 4.4 hereto have been
made, and except as set forth in Schedule 5.3 hereto, the execution and delivery
by the Purchaser of this Agreement and the Assignment and Assumption, the
performance by the Purchaser of its obligations hereunder and thereunder, and
the consummation by the Purchaser of the transactions contemplated hereby and
thereby, will not conflict with or violate in any material respect, constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a material default) under, give rise to any right of
termination, amendment, modification, acceleration or cancellation of any
material obligation or loss of any material benefit under, result in the
creation of any Encumbrance other than a Permitted Encumbrance on any of assets
or properties of the Purchaser pursuant to, or require the Purchaser to obtain
any consent, waiver, approval or action of, make any filing with, or give any
notice to any Person as a result or under, the terms or provisions of (i) the
organizational documents of the Purchaser, (ii) any Contract to which the
Purchaser is a party or is bound, or (iii) any Law applicable to the Purchaser,
or any Governmental Order issued by a Governmental Authority by which the
Purchaser is in any way bound or obligated, except, in the case of clauses (ii)
and (iii) of this Section 5.3, as would not, in any individual case, have a
material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement and the Assignment and Assumption or to
consummate the transactions contemplated hereby or thereby.

5.4 Governmental Consents. No consent, waiver, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of the Purchaser
in connection with the execution and delivery by the Purchaser of this Agreement
and the Assignment and Assumption, the performance by the Purchaser of its
obligations hereunder and thereunder, and the consummation by the Purchaser of
the transactions contemplated hereby and thereby, including, without limitation,
the assumption of the Assumed Liabilities from the Seller, except (i) as set
forth in Schedule 4.4 hereto, and (ii) where the failure to obtain such consent,
waiver, approval, order or authorization, or to make such registration,
qualification, designation, declaration or filing, would not have a material
adverse effect on the ability of the Purchaser to perform its obligations under
this Agreement and the Assignment and Assumption or to consummate the
transactions contemplated hereby or thereby.

5.5 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Purchaser directly
with the Seller without the intervention of any Person on behalf of the
Purchaser in such manner as to give rise to any valid

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claim by any Person against the Seller for a finder's fee, brokerage commission
or similar payment.

ARTICLE VI.
COVENANTS AND AGREEMENTS

6.1 Conduct of Business.

(a) At all times during the period commencing upon the execution
and delivery hereof by each of the parties hereto and terminating upon the
earlier to occur of the Closing or the termination of this Agreement pursuant to
and in accordance with the terms of Section 8.1 hereof, unless the Purchaser
shall otherwise consent in writing (which consent shall not be unreasonably
withheld or delayed), and except as otherwise set forth in Schedule 6.1 hereto,
the Seller shall (i) conduct the operations of the Business in the ordinary
course of business and consistent with past practices, (ii) use commercially
reasonable efforts to preserve intact the goodwill of the Business and the
current relationships of the Seller with its officers, employees, customers,
advertisers, suppliers and others with significant and recurring business
dealings with the Business, (iii) use commercially reasonable efforts to
maintain all Business Insurance Policies and all Business Licenses that are
necessary for the Seller to carry on the Business in the manner conducted by the
Seller as of the date hereof, (iv) maintain the books of account and records of
the Business in the usual, regular and ordinary manner and consistent with past
practices, and (v) not take any action that would result in a breach of or
inaccuracy in (in each case as of the Closing) any of the representations and
warranties of the Seller contained in Article IV hereof.

(b) At all times during the period commencing upon the execution
and delivery hereof by each of the parties hereto and terminating upon the
earlier to occur of the Closing or the termination of this Agreement pursuant to
and in accordance with the terms of Section 8.1 hereof, unless the Purchaser
shall otherwise consent in writing (which consent shall not be unreasonably
withheld or delayed), and except as otherwise set forth in Schedule 6.1 hereto,
the Seller shall not agree to, take, or cause to be taken, any of the following
actions to the extent such actions relate primarily to the Business:

(i) merge with or into, or consolidate with, any other Person;
provided, however, that nothing in this Section 6.1(b)(i) shall prohibit or
otherwise restrain the Seller from entering into an agreement with another
Person to merge with or into, or consolidate with, such Person (hereinafter, a
"Third Party Agreement") as long as (A) neither the Business nor the Purchased
Assets, in whole or in part, are transferred pursuant to such Third Party
Agreement, and (B) such Third Party Agreement does not prevent or interfere with
the consummation of the transactions contemplated hereby.

(ii) change or agree to rearrange in any material respect the
character of the Business;

(iii) (A) except as set forth on Schedule 6.9(b) hereto, adopt,
enter into or amend any arrangement which is, or would be, an Assumed Plan
unless otherwise required by

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applicable Law or this Agreement, or (B) make any change in any actuarial
methods or assumptions used in funding any Assumed Plan or in the assumptions or
factors used in determining benefit equivalences thereunder;

(iv) knowingly waive any right of material value;

(v) make any change in the accounting methods or practices of
the Seller, or make any changes in depreciation or amortization policies or
rates adopted by the Seller;

(vi) make any material write down of inventory or material
write off as uncollectible of accounts receivable;

(vii) increase any wage, salary, bonus or other direct or
indirect compensation payable or to become payable to any of the Business
Employees, or make any accrual for or commitment or agreement to make or pay the
same, other than increases in wages, salary, bonuses or other direct or indirect
compensation made in the ordinary course of business consistent with past
practice, and those required by any existing Contract or Law;

(viii) enter into any transactions with any of its
shareholders, officers, directors or employees or their immediate family
members, or any Affiliate of any of the foregoing, other than employment
arrangements made in the ordinary course of business consistent with past
practice;

(ix) except as set forth on Schedule 6.9(b) hereto, make any
payment or commitment to pay any severance or termination pay to any Business
Employee or any independent contractor, consultant, agent or other
representative of the Business, other than payments or commitments to pay such
Business Employees in the ordinary course of business consistent with past
practice;

(x) (A) other than office leases entered into in the ordinary
course of business, enter into any real property lease (as lessor or lessee);
(B) sell, abandon or make any other disposition of any of the assets or
properties of the Seller other than in the ordinary course of business
consistent with past practice; or (C) grant or incur any Encumbrance on any of
the assets or properties of the Seller other than Permitted Encumbrances;

(xi) except in the ordinary course of business and consistent
with past practices and except for Excluded Liabilities, incur or assume any
debt, obligation or Liability;

(xii) make any acquisition of all or any part of the capital
stock or all or substantially all of the assets, properties or business of any
other Person;

(xiii) pay, directly or indirectly, any of its Liabilities
before the same become due in accordance with its terms or otherwise than in the
ordinary course of business and consistent with past practices; or

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<PAGE> 29

(xiv) enter into any commitments to make capital expenditures
payable after the Closing in an aggregate amount exceeding $100,000; or

(xv) fail to pay and perform any of its debts, obligations and
Liabilities as and when due and any leases, agreements, Contracts and other
commitments to which it is a party in accordance with the terms and provisions
thereof.

(c) Notwithstanding anything to the contrary set forth in this
Section 6.1 or elsewhere in this Agreement, the Seller shall be permitted,
without obtaining the consent or other approval of the Purchaser, to enter into,
perform its obligations under, and consummate the transactions contemplated by,
any existing or new agreements or other arrangements pursuant to which the
Seller shall sell, transfer or otherwise dispose of any of its assets other than
the Purchased Assets, it being expressly acknowledged and agreed by each of the
parties hereto that the foregoing shall include the right to distribute the
proceeds from any such sale, transfer or other disposition to the shareholders
of the Seller without obtaining the consent or other approval of the Purchaser;
provided, however, that the performance by the Seller of its rights under this
Section 6.1(c) shall not prevent or interfere with the performance of the
Seller's obligations under this Agreement or the consummation of the
transactions contemplated hereby.

6.2 Access and Information. Subject to the terms of the Confidentiality
Agreement, at all times during the period commencing upon the execution and
delivery hereof by each of the parties hereto and terminating upon the earlier
to occur of the Closing or the termination of this Agreement pursuant to and in
accordance with the terms of Section 8.1 hereof, the Seller shall permit the
Purchaser and its authorized agents and representatives to have reasonable
access, upon reasonable notice and during normal business hours, to all Business
Employees, assets and properties and all relevant books, records and documents
of or relating to the Business and the Purchased Assets, and shall furnish to
the Purchaser such information and data, financial records and other documents
relating to the Business and the Purchased Assets as the Purchaser may
reasonably request. The Seller shall permit the Purchaser and its agents and
representatives reasonable access to the Seller's accountants, auditors and
suppliers for reasonable consultation or verification of any information
obtained by the Purchaser during the course of any investigation conducted
pursuant to this Section 6.2, and shall use all commercially reasonable efforts
to cause such Persons to cooperate with the Purchaser and its agents and
representatives in such consultations and in verifying such information. Without
limiting the generality of the foregoing, the Seller (i) shall cooperate with
and permit the Purchaser or its agents or representatives, at the Purchaser's
expense, to conduct or cause to be conducted (A) a review and audit of the
financial statements of the Business for the year ended December 31, 1998 and
for the nine month period ended September 30, 1999, and (B) all real property
investigations, assessments and environmental due diligence (including, without
limitation, Phase I and Phase II environmental studies (provided, however, that
Purchaser shall not commence any Phase II study without reasonable prior
notification and good faith consultation with Seller on matters including the
timing, scope and duration of any such Phase II study) and review of appropriate
environmental records), and (ii) discuss the preparation of the year 2000 budget
for the Business with the Purchaser.

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<PAGE> 30

6.3 Confidentiality. The terms of the Confidentiality Agreement are
hereby incorporated herein by reference and shall continue in full force and
effect from and after the Closing in accordance with the terms thereof, such
that the information obtained by any party hereto, or its officers, employees,
agents or representatives, during any investigation conducted pursuant to
Section 6.2 hereof, in connection with the negotiation, execution and
performance of this Agreement, the consummation of the transactions contemplated
hereby, or otherwise, shall be governed by the terms set forth in the
Confidentiality Agreement; provided, however, that on and after the Closing
Date, the Purchaser and its officers, employees, agents or representatives shall
be entitled to disclose information relating to the Business.

6.4 Further Actions.

(a) Upon the terms and subject to the conditions set forth in this
Agreement (including, without limitation, the terms of Section 6.4(b) hereof),
the Seller and the Purchaser shall each use their respective commercially
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, and to assist and cooperate with the other party
hereto in doing, all things necessary, proper or advisable under applicable Laws
to consummate the transactions contemplated hereby, including, without
limitation: (i) obtaining all necessary Licenses, actions or nonactions,
waivers, consents, approvals, authorizations, qualifications and other orders of
any Governmental Authorities with competent jurisdiction over the transactions
contemplated hereby, (ii) obtaining all necessary consents, approvals or waivers
from third parties, (iii) defending any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including, without
limitation, seeking to have vacated or reversed any stay or temporary
restraining order entered by any Governmental Authority prohibiting or otherwise
restraining the consummation of the transactions contemplated hereby, and (iv)
executing and delivering any additional instruments, certificates and other
documents necessary or advisable to consummate the transactions contemplated
hereby and to fully carry out the purposes of this Agreement.

(b) Without limiting the generality of the foregoing, the Seller
and the Purchaser hereby agree to provide promptly to Governmental Authorities
with regulatory jurisdiction over enforcement of any applicable antitrust laws
all information and documents requested by any such Governmental Authorities or
necessary, proper or advisable to permit consummation of the transactions
contemplated hereby, and to file any Notification and Report Form and related
material required under the HSR Act as soon as practicable after the date
hereof. The Seller and the Purchaser shall each thereafter use its respective
commercially reasonable best efforts to complete as soon as practicable its
substantial compliance with any requests for additional information or
documentary material that may be made under the HSR Act. The Purchaser and the
Seller hereby further agree to use their respective commercially reasonable best
efforts to (i) obtain any governmental clearances required for consummation of
the transactions contemplated hereby, (ii) respond to any government request for
information, (iii) contest and resist any action, including any legislative,
administrative or judicial action, and have vacated, lifted, reversed or
overturned, any Governmental Order (whether temporary, preliminary or permanent)
that restricts, prevents or prohibits the consummation of the

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transactions contemplated hereby, including, without limitation, by using all
reasonable legal efforts to vigorously pursue all available avenues of
administrative and judicial appeal and all available legislative action, and
(iv) in the event that any permanent or preliminary injunction or other order is
entered or becomes reasonably foreseeable to be entered in any proceeding that
would make consummation of the transactions contemplated hereby in accordance
with the terms of this Agreement unlawful or that would prohibit, prevent, delay
or otherwise restrain the consummation of the transactions contemplated hereby,
to cause the relevant Governmental Authorities to vacate, modify or suspend such
injunction or order so as to permit the consummation of the transactions
contemplated hereby prior to the Termination Date.

6.5 Fulfillment of Conditions by the Seller. The Seller shall not
knowingly take or cause to be taken, or fail to take or cause to be taken, any
action that would cause the conditions to the obligations of the Seller or the
Purchaser to consummate the transactions contemplated hereby to fail to be
satisfied or fulfilled at or prior to the Closing, including, without
limitation, by taking or causing to be taken, or failing to take or cause to be
taken, any action that would cause the representations and warranties made by
the Seller in Article IV hereof to fail to be true and correct as of the Closing
in all material respects. The Seller shall take, or cause to be taken, all
commercially reasonable actions within its power to cause to be satisfied or
fulfilled, at or prior to the Closing, the conditions precedent to the
Purchaser's obligations to consummate the transactions contemplated hereby as
set forth in Section 7.1 hereof.

6.6 Fulfillment of Conditions by the Purchaser. The Purchaser shall not
knowingly take or cause to be taken, or fail to take or cause to be taken, any
action that would cause the conditions to the obligations of the Seller or the
Purchaser to consummate the transactions contemplated hereby to fail to be
satisfied or fulfilled, including, without limitation, by taking or causing to
be taken, or failing to take or cause to be taken, any action that would cause
the representations and warranties made by the Purchaser in Article V hereof to
fail to be true and correct as of the Closing in all material respects. The
Purchaser shall take, or cause to be taken, all commercially reasonable actions
within its power to cause to be satisfied or fulfilled, at or prior to the
Closing, the conditions precedent to the obligations of the Seller to consummate
the transactions contemplated hereby as set forth in Section 7.2 hereof.

6.7 Publicity. The Seller and the Purchaser shall cooperate with each
other in the development and distribution of all news releases and other public
disclosures relating to the transactions contemplated by this Agreement. Neither
the Seller nor the Purchaser shall issue or make, or allow to have issued or
made, any press release or public announcement concerning the transactions
contemplated by this Agreement without the consent of the other party hereto,
except as otherwise required by applicable Law, but in any event only after
giving the other party hereto a reasonable opportunity to comment on such
release or announcement in advance, consistent with such applicable legal
requirements.

6.8 Transaction Costs. The Purchaser shall pay all transaction costs
and expenses (including legal, accounting and other professional fees and
expenses and other fees described in Section 5.5 hereof) that it incurs in
connection with the negotiation, execution and performance of this Agreement and
the consummation of the transactions contemplated hereby. The Seller

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shall pay all transaction costs and expenses (including legal, accounting and
other professional fees and expenses and other fees described in Section 4.20
hereof) that it incurs in connection with the negotiation, execution and
performance of this Agreement and the consummation of the transactions
contemplated hereby. Notwithstanding the foregoing and anything to the contrary
contained in this Agreement, the Seller and the Purchaser shall share equally
any transfer Taxes (including stock transfer, sales, use and deed Taxes, but
excluding Income Taxes) or refunds thereof and the fees and costs of recording
or filing all applicable conveyancing instruments associated with the transfer
of the Purchased Assets from the Seller to the Purchaser pursuant to this
Agreement. The Seller and the Purchaser shall cooperate in the preparation,
execution and filing of all Tax Returns regarding any transfer Taxes which
become payable as a result of the transfer of the Purchased Assets from the
Seller to the Purchaser pursuant to this Agreement.

6.9 Employees and Employee Benefit Matters.

(a) The Purchaser shall offer employment as of the Closing Date to
all Business Employees. As of the Closing Date, the Purchaser shall employ each
Business Employee whose employment is not covered by a collective bargaining
agreement and who accepts the Purchaser's offer of employment ("Transferred
Non-Union Employees") at a salary, on terms and conditions (and with employee
benefits (including without limitation, benefits of the type described in
Section 3(1) of ERISA)) that are substantially as favorable in the aggregate, as
those provided by the Seller (or its Affiliates) immediately before the
execution hereof. The Purchaser shall provide each Transferred Non-Union
Employee credit for years of service with the Seller or any Affiliate of the
Seller prior to the Closing for (A) the purpose of eligibility and vesting under
the Purchaser's health, vacation and other employee benefit plans (including,
without limitation, the Purchaser 401(k) Plan and the Purchaser DB Plan), and
(B) any and all pre-existing condition limitations and eligibility waiting
periods under group health plans of the Purchaser, and shall cause to be
credited to any deductible out-of-pocket expenses under any health plans of the
Purchaser any deductibles or out-of-pocket expenses incurred by Transferred
Non-Union Employees and their beneficiaries and dependents during the portion of
the calendar year prior to their participation in the health plans of the
Purchaser. Notwithstanding any other provision of this Agreement, Business
Employees that become employed by the Purchaser as of the Closing who are
covered by a collective bargaining agreement on and after the Closing
(collectively with the Transferred Non-Union Employees, the "Transferred
Employees") shall receive benefits in accordance with the terms of such
collective bargaining agreement.

(b) Effective at the Closing Date, the Purchaser shall assume the
severance arrangements set forth in Schedule 6.9(b) hereto; provided, however,
that the Purchaser shall have no liability under such severance arrangements
with respect to terminations of employment occurring before the Closing.

(c) Effective on the Closing Date, the Purchaser shall assume the
Seller's obligations, duties and Liabilities to provide benefits under, and the
Seller shall assign, all Benefit Plans (including all related assets and funding
vehicles) sponsored, established and maintained by the Seller solely for the
benefit of Business Employees as are set forth in Schedule 6.9(c) hereto (the
"Assumed Plans") and any other arrangement described in Section 6.1(b)(iii)

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<PAGE> 33

hereof that is adopted by the Seller before the Closing with the prior written
consent of the Purchaser. The Seller shall have no Liability with respect to the
Assumed Plans following the Closing Date.

(d) Effective as of the Closing Date, the Seller shall cause each
Business Employee to have a fully nonforfeitable right to such employee's
account balances, if any, under The Tax Deferred Investment Plan of The
Chronicle Publishing Company (the "Seller 401(k) Plan"). Effective as of the
Closing Date, the Purchaser shall establish or shall extend coverage to each
Transferred Employee under a defined contribution individual account plan (the
"Purchaser 401(k) Plan") qualified pursuant to Sections 401(a) and 401(k) of the
Internal Revenue Code to the extent the Transferred Employee has satisfied the
requirements for participation therein.

(e) As soon as practicable after the Closing Date, the Seller shall
cause the trustee of the Seller 401(k) Plan to transfer in the form of cash (or
such other form as may be agreed upon by the Seller and the Purchaser) the full
account balances of the Transferred Employees in such plan, reduced by any
necessary benefit, distribution or withdrawal payments to or in respect of
Transferred Employees occurring during the period from the Closing Date to the
date of transfer described herein, to the appropriate trustee as designated by
the Purchaser under the trust agreement forming a part of the Purchaser 401(k)
Plan. The aggregate account balances of Transferred Employees under the Seller
401(k) Plan transferred by the trustee of the Seller 401(k) Plan to the trustee
of the Purchaser 401(k) Plan shall be increased (or decreased) by the Seller by
the amount of any actual earnings (or losses) on each account included therein
from the Closing Date to the date of transfer to the Purchaser 401(k) Plan and
such earnings (or losses) shall be credited (or debited) to the appropriate
accounts. Following the transfer of account balances to the Purchaser 401(k)
Plan as described herein, neither the Seller nor the Seller 401(k) Plan and the
related trust shall have any obligation or Liability with respect to the
benefits and entitlements accrued under the Seller 401(k) Plan in respect of
Transferred Employees whose account balances are transferred to the Purchaser
401(k) Plan pursuant hereto. The Purchaser shall reasonably cooperate to
effectuate the foregoing.

(f) Not later than ninety (90) days following the date hereof (but
in no event less than thirty (30) days before the Closing Date), the Seller may
elect to transfer assets and Liabilities of The Pension Plan of The Chronicle
Publishing Company (the "Seller DB Plan") attributable to the Business Employees
and the former employees of the Business as of the Closing Date. The Seller
shall promptly notify the Purchaser of its election under this Section 6.9(f).
To the extent the Seller elects such a transfer of assets and Liabilities,
effective as of the Closing Date, the Seller shall cause the Seller DB Plan and
the trust established pursuant to the Seller DB Plan (the "Seller Trust") to
transfer to a defined benefit pension plan qualified pursuant to Section 401(a)
of the Internal Revenue Code (the "Purchaser DB Plan") and the trust established
pursuant to the Seller DB Plan (the "Purchaser Trust") maintained or sponsored
by the Purchaser, the Liabilities of the Seller DB Plan attributable to the
accrued benefits of the Business Employees and former Employees of the Business
under the Seller DB Plan as of the Closing Date, subject to the transfer of
assets from the Seller Trust to the Purchaser Trust in accordance with Section
6.9(g) hereof. The Purchaser DB Plan shall provide to each Business Employee all
of his or her benefits accrued under the Seller DB Plan as of the Closing Date.
The

33
<PAGE> 34

accrued benefits required to be provided to Business Employees and former
employees of the Business under the Purchaser DB Plan shall be determined under
the terms of the Seller DB Plan as in effect immediately prior to the Closing
Date (provided that no improvements thereto shall be made after the date
hereof), including the terms of the early retirement benefits, retirement type
subsidies, optional forms of benefit and all other protected benefits described
in Section 204(g) of ERISA, Section 411(d)(6) of the Internal Revenue Code and
Treasury Regulation Section 1.411(d)-4. The Purchaser shall reasonably cooperate
to effectuate the foregoing.

(g) Prior to the Closing Date, the Seller shall designate the date
(the "Asset Transfer Date") on which assets of the Seller Trust shall be
transferred to the Purchaser Trust in connection with the transfer of
Liabilities pursuant to Section 6.9(f) hereof, and shall notify the Purchaser
thereof. The Asset Transfer Date shall be as soon as practicable but no later
than one (1) year following the Closing Date. Not less than one hundred and
twenty (120) days before the Asset Transfer Date, the enrolled actuary for the
Seller DB Plan, subject to review by the enrolled actuary for the Purchaser DB
Plan, shall calculate the amount of assets to be transferred from the Seller
Trust to the Purchaser Trust (the "Asset Transfer Amount") that would have been
sufficient to satisfy the requirements of Sections 401(a)(12) and 414(l) of the
Internal Revenue Code, Treasury Regulation Section 1.414(l)-1 and Section 208 of
ERISA as of the Closing Date with respect to the transfer of the Liabilities of
the Seller DB Plan attributable to the accrued benefits of the Business
Employees and former employees of the Business as of the Closing Date in
accordance with Section 6.9(f) hereof.

(h) On the Asset Transfer Date, the Seller shall cause the Seller
Trust to transfer to the Purchaser Trust, and the Purchaser shall cause the
Purchaser Trust to accept from the Seller Trust, assets in the form of cash (or
such other form as may be agreed by the Seller and the Purchaser) in an amount
equal to the Asset Transfer Amount, plus interest from the Closing Date to the
Asset Transfer Date, less benefits paid to the Business Employees by the Seller
DB Plan on or after the Closing Date with interest (such interest to be
determined using an interest rate of seven percent (7%)). In no event shall any
transfers take place which are not in accordance with all applicable laws,
including without limitation, Sections 401(a)(12) and 414(l) of the Internal
Revenue Code.

(i) The Seller shall cause the administrator of the Seller 401(k)
Plan and the administrator of the Seller DB Plan, and the Purchaser shall cause
the administrator of the Purchaser 401(k) Plan and the administrator of the
Purchaser DB Plan, to timely make such filings as are required under ERISA, the
Internal Revenue Code or any applicable Laws with respect to the transfer of
account balances, assets or Liabilities described in this Section 6.9, including
any required filings on Form 5310-A.

(j) Prior to the Closing, the Purchaser and the Seller will take
such actions as are necessary so that Section 4204 of ERISA will apply with
respect to the GCIU - Employer Retirement Fund (the "GCIU Fund") as it relates
to Business Employees or former employees of the Business and shall enter into
such further agreements, including an agreement substantially in the form set
forth on Exhibit L hereto, it being understood that any potential economic
exposure to the Purchaser is not material. Notwithstanding the foregoing, the
Purchaser and the Seller

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<PAGE> 35

agree to give good-faith consideration to any reasonable request made by the
other to address matters relating to the GCIU Fund by proceeding other than as
set forth in the foregoing sentence.

6.10 Interdivisional Agreements. Except as set forth in Schedule 6.10
hereto, prior to Closing, the Seller shall terminate, without any continuing
Liability to the Business resulting therefrom, all agreements between any
division of the Seller not related to the Business, on the one hand, and the
division of the Seller responsible for operating the Business, on the other
hand.

6.11 Retention of and Access to Records. From and after the Closing,
the Purchaser shall preserve, in accordance with the normal document retention
policy of the Business, all books and records transferred by the Seller to the
Purchaser pursuant to this Agreement. As soon as practicable following the
Closing, the Purchaser shall deliver to Seller or, if so requested, to the
shareholders of the Seller (through the representative designated pursuant to
Section 10.7 hereof) such financial information relating to the Business as has
been customarily provided to Seller by The Pantagraph in sufficient detail to
enable the Seller or such shareholders to prepare the Seller's financial
statements, the Statement of Working Capital and all Tax Returns of the Seller
and such shareholders relating to periods ending on or prior to the Closing
Date. In addition to the foregoing, from and after the Closing, the Purchaser
shall afford to the Seller, and its counsel, accountants and other authorized
agents and representatives, and to any shareholders of the Seller and their
respective counsel, accountants and other authorized agents and representatives,
during normal business hours and upon the execution and delivery of a
confidentiality and non-disclosure agreement in customary form and substance
(which shall include appropriate exceptions for disclosure relating to Tax
Returns and other Tax matters), reasonable access to the employees, books,
records and other data relating to the Purchased Assets, the Excluded Assets,
the Assumed Liabilities and the Excluded Liabilities in its possession with
respect to periods prior to the Closing, and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required by
the requesting party (a) to facilitate the investigation, litigation and final
disposition of any claims which may have been or may be made against any such
party or Person, or its Affiliates, (b) for the preparation of Tax Returns and
audits, and (c) for any other reasonable business purpose.

6.12 Tax Matters.

(a) The Purchaser shall have the right, at its expense, to control
any audit or examination by any Governmental Authority ("Tax Audit"), initiate
any claim for refund, and contest, resolve and defend against any other
assessment, notice of deficiency or other adjustment or proposed adjustment
relating to any Liability for Taxes that is an Assumed Liability; provided,
however, that the Purchaser shall not (i) consent, without the prior written
approval of the Seller, which approval shall not be unreasonably withheld or
delayed, to any change in the treatment of an item, or (ii) initiate any claim
for a refund, in either case which could in any respect adversely affect the
Seller's Liability for Taxes which are not an Assumed Liability.

35
<PAGE> 36

(b) The Seller and the Purchaser shall each provide the other with
such assistance as may reasonably be requested by the other in connection with
the preparation of any Tax Return, any Tax Audit or other examination by any
Governmental Authority, or any judicial or administrative proceedings relating
to Taxes, and each shall provide the other with any records or information that
may be relevant to such Tax Return, Tax Audit or examination, proceedings or
determination. Such assistance shall include making employees available on a
mutually convenient basis to provide additional information and explanation of
material provided hereunder and shall include providing copies of any relevant
Tax Returns and supporting work schedules. The party requesting assistance
hereunder shall reimburse the other for reasonable expenses incurred in
providing such assistance.

6.13 Insurance Matters.

(a) The Purchaser anticipates obtaining prior to Closing (i) a
"tail" policy to the EPLI portion of the Seller's directors' and officers'
liability insurance policy (as referenced on Schedule 4.19 hereto) if necessary
to continue in effect for the benefit of the Purchaser the coverage under such
EPLI portion of such insurance, and (ii) modifications or "nose" policies to the
Purchaser's existing liability insurance policies (other than libel (if
necessary) and workers' compensation insurance policies), each with respect to
claims relating to matters occurring prior to the Closing that have not been
reported as of the Closing Date. The Seller shall use its reasonable efforts to
assist the Purchaser in obtaining such modifications or policies, and the
Purchaser agrees to reimburse the Seller for any premiums required to be paid by
the Seller in connection therewith.

(b) The Seller and the Purchaser shall execute and deliver to each
other such further instruments and certificates and other documents as each
other may reasonably request in order to more effectively obtain the insurance
modifications or policies referenced in Section 6.13(a) hereof (including libel
and workers' compensation insurance modifications or policies).

ARTICLE VII.
CLOSING CONDITIONS

7.1 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or fulfillment at or prior to the Closing of the
following conditions, any of which may be waived in whole or in part by the
Purchaser in writing:

(a) All representations and warranties of the Seller contained in
this Agreement that are not qualified as to materiality shall be true and
correct in all material respects at and as of the Closing, and all
representations and warranties of the Seller that are so qualified as to
materiality shall be true and correct in all respects at and as of the Closing,
in each case with the same effect as though such representations and warranties
were made at and as of the Closing (other than any representation or warranty
that is expressly made as of a specified date, which shall be true and correct
in all material respects as of such specified date only, provided that any
representation or warranty that is expressly made as of a specified date that is
qualified as to materiality shall be true and correct in all respects as of such
specified date only).

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<PAGE> 37

(b) The Seller shall have performed and complied in all material
respects with all the covenants and agreements required by this Agreement to be
performed or complied with by it at or prior to the Closing.

(c) All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated.

(d) There shall be in effect no Law or injunction issued by a court
of competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.

(e) The Seller shall have delivered to the Purchaser all of the
certificates, instruments and other documents required to be delivered by the
Seller at or prior to the Closing pursuant to Section 3.2 hereof.

7.2 Conditions to Obligations of the Seller. The obligations of the
Seller to consummate the transactions contemplated by this Agreement are subject
to the satisfaction or fulfillment at or prior to the Closing of the following
conditions, any of which may be waived in whole or in part by the Seller in
writing:

(a) All representations and warranties of the Purchaser contained
in this Agreement that are not qualified as to materiality shall be true and
correct in all material respects at and as of the Closing, and all
representations and warranties of the Purchaser that are so qualified as to
materiality shall be true and correct in all respects at and as of the Closing,
in each case with the same effect as though such representations and warranties
were made at and as of the Closing (other than any representation or warranty
that is expressly made as of a specified date, which shall be true and correct
in all material respects as of such specified date only, provided that any
representation or warranty that is expressly made as of a specified date that is
qualified as to materiality shall be true and correct in all respects as of such
specified date only)).

(b) The Purchaser shall have performed and complied in all material
respects with the covenants and agreements required by this Agreement to be
performed or complied with by it at or prior to the Closing.

(c) All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated.

(e) The Purchaser shall have delivered to the Seller the Cash
Payment and all of the certificates, instruments and other documents required to
be delivered by the Purchaser at or prior to the Closing pursuant to Section 3.3
hereof.

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<PAGE> 38

ARTICLE VIII.
TERMINATION

8.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated and abandoned:

(a) by either the Seller or the Purchaser at any time prior to the
Closing with the mutual written consent of the other party hereto;

(b) unless the Closing has not occurred as a result of a breach of
this Agreement by the party seeking such termination, by either the Seller or
the Purchaser if the Closing has not occurred on or prior to 5:00 p.m.
(California time) on the date which is 120 calendar days following the date of
this Agreement (the "Termination Date"); provided, however, that the Seller in
its sole discretion may elect to extend the Termination Date until 5:00 p.m.
(California time) on a date which is not later than 180 calendar days following
the date of this Agreement by written notice to the Purchaser at least ten (10)
calendar days prior to the initial Termination Date; or

(c) by either the Seller or the Purchaser if any Governmental
Authority with jurisdiction over such matters shall have issued a final and
nonappealable Governmental Order permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement;
provided, however, that neither the Seller nor the Purchaser may terminate this
Agreement pursuant to this Section 8.1(c) unless the party seeking to so
terminate this Agreement has used all commercially reasonable best efforts to
oppose any such Governmental Order or to have such Governmental Order vacated or
made inapplicable to the transactions contemplated by this Agreement.

8.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 8.1 hereof, this Agreement shall become null and void and neither party
hereto shall have any further liability hereunder except that (i) the provisions
of Section 6.7 and Section 6.8 and Article VIII generally shall remain in full
force and effect, and (ii) each party hereto shall remain liable to each other
party hereto for any willful breach of its obligations under this Agreement
prior to such termination.

ARTICLE IX.
SURVIVAL AND INDEMNIFICATION

9.1 Survival. None of the representations and warranties of the Seller
and the Purchaser contained in this Agreement, or in any certificate, instrument
or other document delivered by the Seller or the Purchaser pursuant to this
Agreement or in connection with the transactions contemplated hereby, shall
survive the Closing. None of the covenants and agreements of the Seller and the
Purchaser contained in this Agreement, or in any certificate, instrument or
other document delivered by the Seller or the Purchaser pursuant to this
Agreement or in connection with the transactions contemplated hereby, shall
survive the Closing, except to the extent such covenants and agreements by their
terms contemplate performance after the Closing. No claim shall be made or
action brought by any party hereto after the Closing (i) for

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<PAGE> 39

the breach of, or inaccuracy in, any representation or warranties contained in
this Agreement, or in any certificate, instrument or other document delivered
pursuant to this Agreement or in connection with the transactions contemplated
hereby, or (ii) for the breach of any covenant or agreement contained in this
Agreement, or in any certificate, instrument or other document delivered
pursuant to this Agreement or in connection with the transactions contemplated
hereby, except with respect to those covenants and agreements that by their
terms contemplate performance after the Closing, including, but not limited to,
the covenants and agreements set forth in Sections 2.3(b), 2.3(c), 2.4, 2.5,
4.19(c), 6.3, 6.4(a), 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, and 6.13 hereof, Article
VIII and Article X hereof, and in this Article IX.

9.2 Indemnification By Purchaser. From and after the date hereof, the
Purchaser shall indemnify, defend and hold harmless the Seller, and its
respective shareholders, officers, directors, employees, affiliates, agents and
representatives, from and against all judgments, settlements, demands, claims,
actions or causes of action, deficiencies, assessments, Liabilities, losses,
damages (whether direct or indirect, incidental or consequential), interest,
fines, penalties, costs and expenses (including, without limitation, reasonable
legal, accounting and other costs and expenses incurred in connection with
investigating, defending, settling or satisfying any and all demands, claims,
actions or causes of action, suits, proceedings, deficiencies, assessments,
judgments or appeals, and in seeking indemnification therefor pursuant to this
Section 9.2) (collectively, "Losses") arising out of, resulting from, related to
or associated with any and all of the Assumed Liabilities. The Purchaser agrees,
with respect to claims referenced in Section 2.2(c)(vii) hereof, (x) to pursue
the defense and administration of such claims on behalf of the Seller against
the insurer, and (y) to defend the Seller with respect to any Action arising
from such claims. The Purchaser further agrees to indemnify, defend and hold
harmless the Seller, and its respective shareholders, officers, directors,
employees, affiliates, agents and representatives from all Losses arising from
such claims to the extent the Seller does not receive insurance proceeds in
respect of any such Losses.

9.3 Indemnification By Seller. From and after the date hereof, the
Seller shall indemnify, defend and hold harmless the Purchaser, and its
respective shareholders, officers, directors, employees, affiliates, agents and
representatives, from and against all judgments, settlements, demands, claims,
actions or causes of action, deficiencies, assessments, Liabilities, losses,
damages (whether direct or indirect, incidental or consequential), interest,
fines, penalties, costs and expenses (including, without limitation, reasonable
legal, accounting and other costs and expenses incurred in connection with
investigating, defending, settling or satisfying any and all demands, claims,
actions or causes of action, suits, proceedings, deficiencies, assessments,
judgments or appeals, and in seeking indemnification therefor pursuant to this
Section 9.3) arising out of, resulting from, related to or associated with any
and all of the Excluded Liabilities.

9.4 Notice and Defense of Claims. Each party entitled to
indemnification under this Article IX (the "Indemnified Party") shall give
notice to the party required to provide such indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claims
as to which indemnity is sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or litigation resulting therefrom and to
consent to the entry of any judgment or the entry into of any settlement with
respect thereto, provided that

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the Indemnified Party may participate in such defense at such party's expense,
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Article IX except to the extent that the Indemnifying Party has been
adversely affected by such failure. The Indemnified Party shall furnish such
information regarding itself or the claim in question as the Indemnifying Party
may reasonably request in writing and shall otherwise cooperate with the
Indemnifying Party to such extent as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.

ARTICLE X.
MISCELLANEOUS

10.1 Notices. All notices that are required or may be given pursuant to
this Agreement must be in writing and delivered personally, by a recognized
courier service, by a recognized overnight delivery service, by telecopy or by
registered or certified mail, postage prepaid, to the parties at the following
addresses (or to the attention of such other person or such other address as any
party may provide to the other parties by notice in accordance with this Section
10.1):

if to the Purchaser, to: with a copy to:
------------------------ ---------------
Mr. Ronald H. Ridgway
Senior Vice President-Finance Richard A. Palmer, Esq.
Pulitzer Inc. Fulbright & Jaworski, L.L.P.
900 North Tucker Boulevard 666 Fifth Avenue
St. Louis, MO 63101 New York, NY 10103

if to the Seller, to: with copies to:
--------------------- ---------------

The Chronicle Publishing Company
901 Mission Street Latham & Watkins
San Francisco, California 94103 135 Commonwealth Drive
Attention: W. Ronald Ingram Menlo Park, California 94025
Attention: Peter F. Kerman
Kimberly Wilkinson

and, with regard to matters
---------------------------
relating to Taxes, to:
----------------------

Skadden, Arps, Slate, Meagher &
Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Matthew A. Rosen

Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or

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overnight delivery service or sent by telecopy (receipt confirmed) or, if
mailed, when actually received.

10.2 Attorneys' Fees and Costs. If attorneys' fees or other costs are
incurred to secure performance of any obligations hereunder, or to establish
damages for the breach thereof or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party will be entitled
to recover reasonable attorneys' fees and costs incurred in connection
therewith.

10.3 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned or delegated by the Seller or
the Purchaser without the prior written consent of the other party and any
purported assignment or delegation in violation hereof shall be null and void;
provided, however, that the Purchaser may assign its rights and obligations
under this Agreement to a direct or indirect wholly-owned subsidiary of the
Purchaser, as long as the Purchaser continues to remain fully liable for all of
its obligations hereunder. Notwithstanding the foregoing, the Seller shall be
entitled after the Closing Date to assign its obligations under this Agreement
to another entity which succeeds to all or substantially all of the Seller's
assets and properties for the purpose of handling any dissolution or liquidation
of the Seller.

10.4 Amendments and Waiver. This Agreement may not be modified or
amended except in writing signed by the party against whom enforcement is
sought. The terms of this Agreement may be waived only by a written instrument
signed by the party waiving compliance. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise provided. No delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Unless otherwise
provided, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties hereto may otherwise have
at law or in equity. Whenever this Agreement requires or permits consent by or
on behalf of a party, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 10.4.

10.5 Entire Agreement. This Agreement, the Confidentiality Agreement
and the related documents contained as Exhibits and Schedules hereto or
expressly contemplated hereby (including the Seller Documents) contain the
entire understanding of the parties relating to the subject matter hereof and
supersede all prior written or oral and all contemporaneous oral agreements and
understandings relating to the subject matter hereof. The Exhibits and Schedules
to this Agreement are hereby incorporated by reference into and made a part of
this Agreement for all purposes.

10.6 Representations and Warranties Complete. The representations,
warranties, covenants and agreements set forth in this Agreement and the
Confidentiality Agreement constitute all the representations, warranties,
covenants and agreements of the parties hereto and

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<PAGE> 42

their respective shareholders, directors, officers, employees, affiliates,
advisors (including financial, legal and accounting), agents and representatives
and upon which the parties have relied.

10.7 Third Party Beneficiaries. Except as set forth below in this
Section 10.7, this Agreement is made for sole for the benefit of the parties
hereto and nothing contained herein, express or implied, is intended to or shall
confer upon any other Person (including any Business Employee) any third party
beneficiary right or any other legal or equitable rights, benefits or remedies
of any nature whatsoever under or by reason of this Agreement. Notwithstanding
the foregoing or anything to the contrary contained in this Agreement, the
parties hereto acknowledge and agree that the shareholders of the Seller are the
only third party beneficiaries of the benefits under this Agreement that inure
to the Seller following the Closing, and, as a result, a representative of the
shareholders to be designated from time to time by the Seller or the previously
designated shareholder representative in writing shall be entitled to enforce
any of the shareholders' third party beneficiary rights following the Closing
for so long as any such rights remain in effect pursuant to the terms of this
Agreement.

10.8 Governing Law. This Agreement will be governed by and construed
and interpreted in accordance with the substantive laws of the State of
California, without giving effect to any conflicts of law rule or principle that
might require the application of the laws of another jurisdiction.

10.9 Neutral Construction. The parties to this Agreement agree that
this Agreement was negotiated fairly between them at arms' length and that the
final terms of this Agreement are the product of the parties' negotiations. Each
party represents and warrants that it has sought and received legal counsel of
its own choosing with regard to the contents of this Agreement and the rights
and obligations affected hereby. The parties agree that this Agreement shall be
deemed to have been jointly and equally drafted by them, and that the provisions
of this Agreement therefore should not be construed against a party or parties
on the grounds that the party or parties drafted or was more responsible for
drafting the provision(s).

10.10 Severability. In the event that any one or more of the provisions
or parts of a provision contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement or any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein and such provision or part shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.

10.11 Bulk Sales Laws. The parties hereby waive compliance with the
Bulk Sales Laws of any State in which the Purchased Assets are located or in
which operations relating to the Business are conducted.

10.12 Headings; Interpretation; Schedules and Exhibits. The descriptive
headings of the several Articles and Sections of this Agreement are inserted for
convenience only and do not

42
<PAGE> 43

constitute a part of this Agreement. References to Sections or Articles, unless
otherwise indicated, are references to Sections and Articles of this Agreement.
The word "including" means including without limitation. Words (including
defined terms) in the singular shall be held to include the plural and vice
versa and words of one gender shall be held to include the other gender as the
context requires. The terms "hereof," "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all of the Schedules and Exhibits hereto) and
not to any particular provision of this Agreement unless otherwise specified. It
is understood and agreed that neither the specifications of any dollar amount in
this Agreement nor the inclusion of any specific item in the Schedules or
Exhibits is intended to imply that such amounts or higher or lower amounts, or
the items so included or other items, are or are not material, and neither party
shall use the fact of setting of such amounts or the fact of the inclusion of
such item in the Schedules or Exhibits in any dispute or controversy between the
parties as to whether any obligation, item or matter is or is not material for
purposes hereof.

10.13 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (II) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER
VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.13.

10.14 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, each of which shall be
deemed an original and all of which together will constitute one and the same
instrument.

[Remainder of Page Intentionally Left Blank]

<PAGE> 44

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first above written.

THE CHRONICLE PUBLISHING COMPANY

By: /s/ W. Ronald Ingram
-------------------------------
Name: W. Ronald Ingram
Title: Secretary

PULITZER INC.

By: /s/ Ronald H. Ridgway
-------------------------------
Name: Ronald H. Ridgway
Title: Senior Vice President - Finance

<PAGE> 1
EXHIBIT 21

SUBSIDIARIES OF REGISTRANT
- ------------------------------------

Star Publishing Company
Pulitzer Technologies, Inc.
News Information, Inc.
WEJ Investment Company
Pulitzer Ventures, Inc.
Pulitzer Community Newspapers, Inc.
PCN Service Co.
Hanford Sentinel, Inc.
Pulitzer Missouri Newspapers, Inc.
Napa Valley Publishing Co.
Flagstaff Publishing Co.
Santa Maria Times, Inc.
Troy Daily News, Inc.
Sonoma-Marin Publishing Co.
Kauai Publishing Co.
Northern Lakes Publishing Co.
Northern Illinois Publishing Co.
Southwestern Oregon Publishing Co.
Pantagraph Publishing Co.

<PAGE> 1

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

To Pulitzer Inc.:

We consent to the incorporation by reference in Registration Statement No.
333-75697 of Pulitzer Inc. on Form S-8 of our reports dated February 4, 2000,
appearing in this Annual Report on Form 10-K of Pulitzer Inc. for the year ended
December 31, 1999.

DELOITTE & TOUCHE LLP

Saint Louis, Missouri
March 23, 2000

<PAGE> 1

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints ROBERT C. WOODWORTH and RONALD H. RIDGWAY, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign Pulitzer Inc.'s Annual Report on Form 10-K, and
to file the same, with all exhibits thereto and other documents in connection
therewith, and any amendments thereto, with the Securities and Exchange
Commission and New York Stock Exchange, Inc., granting unto said
attorneys-in-fact and agents and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or each of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael E. Pulitzer Director; Chairman January 20, 2000
- ---------------------------------
(Michael E. Pulitzer)

/s/ Robert C. Woodworth Director; President and January 20, 2000
- --------------------------------- Chief Executive Officer
(Robert C. Woodworth) (Principal Executive Officer)

/s/ Ronald H. Ridgway Director; Senior Vice President-Finance January 20, 2000
- --------------------------------- (Principal Financial and Accounting Officer)
(Ronald H. Ridgway)

/s/ Ken J. Elkins Director January 20, 2000
- ---------------------------------
(Ken J. Elkins)

/s/ David E. Moore Director January 20, 2000
- ---------------------------------
(David E. Moore)

/s/ William Bush Director January 20, 2000
- ---------------------------------
(William Bush)

/s/ Emily Rauh Pulitzer Director January 20, 2000
- ---------------------------------
(Emily Rauh Pulitzer)

/s/ Alice B. Hayes Director January 20, 2000
- ---------------------------------
(Alice B. Hayes)

/s/ James M. Snowden Jr. Director January 20, 2000
- ---------------------------------
(James M. Snowden, Jr.)
</TABLE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 106,177
<SECURITIES> 451,714
<RECEIVABLES> 44,537
<ALLOWANCES> 2,362
<INVENTORY> 5,146
<CURRENT-ASSETS> 635,220
<PP&E> 165,599
<DEPRECIATION> 81,995
<TOTAL-ASSETS> 978,287
<CURRENT-LIABILITIES> 39,690
<BONDS> 0
0
0
<COMMON> 226
<OTHER-SE> 834,931
<TOTAL-LIABILITY-AND-EQUITY> 978,287
<SALES> 391,383
<TOTAL-REVENUES> 391,383
<CGS> 148,578
<TOTAL-COSTS> 148,578
<OTHER-EXPENSES> 17,091
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 41,665
<INCOME-TAX> 18,708
<INCOME-CONTINUING> 22,957
<DISCONTINUED> (21,449)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,508
<EPS-BASIC> 0.07
<EPS-DILUTED> 0.07

</TABLE>