Newspapers for sale: Are new billionaire owners good for the business?
Jeffrey Bezos, buyer of the Washington Post, and John Henry, who snapped up The Boston Globe, belong to a new, 'unfettered' class of newspaper owners. It helps that they're billionaires, analysts say.
Los Angeles — While billionaire Jeffrey Bezos’s $250 million purchase of the Washington Post came as a surprise – some say shock – to many, it is just the latest in a recent back-to-the-future trend of wealthy businessmen taking up the helm of ailing newspapers across the country.
Over the weekend, Red Sox owner John Henry announced plans to buy The Boston Globe, while magnates from the real estate and greeting card industries have snapped up publications such as The San Diego Union Tribune and the Orange County Register.
“Clearly we are seeing notable great dailies come into the hands of very wealthy individual owners,” says Mark Jurkowitz of the Pew Research Center.
“These are a new class of owners,” points out Mr. Jurkowitz. “They are more unfettered.”
In the case of Mr. Bezos, he notes for instance, the Amazon founder and new Globe owner will be able to operate without having to explain his actions to outside shareholders.
“His private ownership gives him complete room for maneuvering,” Jurkowitz adds.
The reason for the flurry of purchases, meanwhile, is the falling fortunes of many major papers, he says.
“We are seeing this new wave of wealthy dynamic owners taking over a business because they are getting the business at bargain-basement prices,” he says. The New York Times, for instance, which bought the Globe for $1.1. billion, sold it for just $70 million, what some analysts have called a give-away.
But can these new owners do anything to improve the fortunes of their new possessions?
Key to the perception by both sellers and buyers that they may be able to navigate a new future – where for instance, the Graham family, owners of the Post for some 80 years, could not – is their outsider status.
“Clearly they have different ideas about how to run media operations, and, most important, they are not from newspaper or media culture,” Jurkowitz adds.
Chris Tolles, CEO of Topix, one of the leading news communities on the Web, says the media properties will fare better as they return to individual publishers.
“A corporate or private equity structure is one of the worst possible structures for a metro daily,” he says, adding that such media dynasties as the Grahams and the Chandlers, former owners of the Los Angeles Times, show that “billionaire publishers can do a good job with newspapers, not so much their grandchildren.”
Nonetheless, Mr. Tolles suggests there are some important caveats about outsiders moving into a new business. Look at the tactics in other fields for lessons on how a businessman might proceed, Tolles says. In the end, even amid ferocious competition, the goal of journalism is to inform, whereas, points out Tolles, “Amazon’s core competency is driving other companies out of business.”
Others express similar skepticism about what to expect from Bezos. There is a demonstrated history of preferring part-time and temporary workers at Amazon’s fulfillment houses, points out Mike Elk, economics and business writer for the progressive magazine, In These Times.
“I have no optimism that he would do anything less when he gets to the Washington Post,” he says, adding that this matters because unless you have the reporters to do informed, long-form journalism that means something, “it won’t matter if he figures out a business model that allows some version of the Washington Post to survive.”
Bezos himself, in an open letter to the Washington Post staff in which he sought to confirm his commitment to good journalism, has suggested that as owner, he hopes to channel the courage he says earlier owners have shown.
That includes “the courage to say wait, be sure, slow down, get another source. Real people and their reputations, livelihoods and families are at stake.”
It also includes the courage that comes, perhaps, from having a personal fortune of some $25 billion: “The courage to say follow the story, no matter the cost.”