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Let a “gaggle of billionaires” take over press, says CJR

An extraordinary editorial in the new edition of the Columbia Journalism Review suggests something close to panic among some of the people who think about the newspaper industry in the United States. It boils down to telling stock market companies to get out of newspapers and hand over to benevolent billionaire proprietors.

The case for this stems, bizarrely, from a comparison of the Tribune company and Donald Rumsfeld. A “Rumsfeld moment” has arrived and it is time for the Tribune company to sell its newspaper business.

As if that metaphor is not enough, the editorial goes on to equate the Tribune company’s behaviour at the Los Angeles Times which it owns with the motorcycle thugs in Hunter S Thompson’s Hell’s Angels. Back in November the LA Times editor, Dean Baquet, was forced to resign by the owners over his refusal to cut editorial staff. The Chicago-based Tribune business owns 11 daily newspapers and 24 TV stations.

From the specific, the CJR moves to the general (“public ownership” does not mean what it would in the UK):

Public ownership of newspapers no longer makes the kind of sense it made when the industry was rapidly shedding labor costs thanks to new technology, and when the money that stockholders poured in was invested partly in editorial. Today newspapers need owners with the patience and the guts to ride through this valley of transition, with its attendant economic uncertainty, and find the next high ground, which will probably have something to do with the Internet.

There is a strong argument for saying that shareholders take too short- term a view to see newspapers through the trauma of the internet and convergence. But I question whether the “gaggle of billionaires”, said to be ready to buy, are the answer and, as the CJR says, some may turn out to be “pirates”.

In the UK, Express newspapers has fallen into the hands of Richard Desmond who took £27.28m in earnings and pension contributions in the last reported year. He is also planning to run the Sunday Express with just 16 full-time journalists. Roy Greenslade, a former editor of the Daily Mirror who is now the media blogger at the Guardian, believes Desmond is driving his newspapers into the grave.

The Barclay brothers, who bought the Telegraph from the ruins of Conrad Black’s empire, are investing £150m in the business with the new print and web integrated newsroom and new presses. But 54 jobs were lost in the move and a strike threat was eventually called off this week after an agreement on Saturday working.

In cutting jobs the Barclay Brothers were behaving in a similar way to the Tribune company at the Los Angeles Times.

Not only are rich proprietors generally trying to make themselves richer, but media companies are finding it difficult to divest themselves of newspapers. Shareholders will not accept fire sale prices.

In the UK, Daily Mail and General Trust called off its attempt last year to sell the regional Northcliffe group and carried on making deep cuts in costs. Trinity Mirror was expected to announce divestment of either its national or regional interests but said an offer for the Daily and Sunday Mirrors “substantially undervalued” them. Instead it has put some smaller papers on the market.

I doubt if the situation is really very different in the US except that there is probably more scope for short term profits though cost cutting there.

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  1. howardowens.com: media blog » Blog Archive » To save journalism, think differently about journalism says

    […] UPDATE: Related, Andrew Grant-Adamson takes on a CJR editorial calling on billionairs to take over big newspapers. He notes that rich owners want to make money, too, and are just as likely to make staff cuts as publicly traded companies.  He also suggests that newspapers have fallen out of favor with Wall Street because of flat revenue, but I think the lack of confidence has more to do with the inability of newspaper companies to articular a clear vision of the future.  We have been clinging to a dying business model (including how we report and present news). Related to that thought is Alan Mutter on newspaper valuation. Share and Enjoy:These icons link to social bookmarking sites where readers can share and discover new web pages. […]

  2. Wordblog » Blog Archive » Ridiculous debate on newspaper ownership says

    […] Let a “gaggle of billionaires” take over press, says CJR […]