News consumers in Los Angeles, Baltimore, Boston, and other parts of the country may have heard that local investors are interested in buying their main newspaper. They might think this is purely a business matter. Actually, it's more about them – and the future of journalism that informs their daily lives.
The potential buyers, some with very deep pockets, are aiming to "rescue" these newspapers from the maw of publicly owned corporations. Several of the buyers believe Wall Street's profit interest is trumping Main Street's public interest – cutting newsroom staffs to the point that journalism's watchdog role is in danger.
Last week, for instance, the editor of the Los Angeles Times, which is owned by the Tribune Company of Chicago, was forced to resign after refusing to make further staff cuts. Last year that paper and many others reduced staff significantly. Earlier this year, investor demands prompted the sale and breakup of the Knight-Ridder chain. Now investors in the Tribune Co., seeking to increase their stock price, are putting all or part of the company up for sale.
Part of the financial pressure is due to the state of the industry. Newspapers continue to lose circulation and ad revenue to the Internet. Investors' push for improved performance is forcing newspapers to search for a new business model, and that's a healthy force at work.
But does the squeeze have to be this severe? It seems to matter not a whit to Wall Street, so focused on short-term results, that the newspaper industry last year reported an average operating margin of 19.3 percent – twice the average for the Fortune 500 companies.
Some of the potential buyers eyeing these papers simply believe Wall Street's too greedy. By bringing newspapers under private ownership and returning them to local control, they believe they can restore a better balance between profit and the community-service function of rigorous, shoe-leather newspaper reporting – on which so much of the rest of the media depend.
Ted Venetoulis shares this view. He's a former Baltimore County executive heading up a group of local business leaders angling to buy The Baltimore Sun from the Tribune Co. He recently commented that "this may not be the best business venture around" but "this is part civic responsibility."
Private and local ownership has its advantages. The monkey of excessive profits is off the back of owners, who also have a natural stake in their community.
But conversely, local owners may be more inclined to interfere with the editorial independence necessary to maintain a paper's credibility, or suddenly find their pockets for investing in the future aren't as deep as they need to be.
No matter who owns newspapers, they still must find a new business model to survive an age where text, audio, and video are all converging in cyberspace. Fortunately, they're awake, and working on it. Keeping them hopeful is the knowledge that the public still needs a news organization's basic function as information diggers, sifters, and watchdogs.
Private, local ownership has its risks. But if it can give newspapers breathing room to find their way, it seems worth it – for the sake of journalism and an informed public.