Commentary: Advice for billionaires looking to buy newspapers
By Margaret Sullivan / The Washington Post
In a few days, we may know whether some of America’s major newspapers – the Chicago Tribune, the Baltimore Sun, and several others – will be bought out by a profit-seeking hedge fund or by a group of seemingly well-meaning wealthy individuals.
Most of us who care about local journalism work hard for the wealthy men, including Maryland hotel mogul, Stewart Bainum Jr. and Swiss billionaire Hansjörg Wyss. They seem to have their hearts in the right place. (Update: On Monday, Wyss reportedly pulled out of the offer, but Bainum was continuing with the offer.)
“Maybe I’m naive,” Wyss said, before reconsidering, “but the combination of giving enough money to professional staff to do the right things and spending a lot of money on digital will eventually do. a very profitable newspaper. “
Hedge fund Alden Global Capital, on the other hand, never had much to say about its intention which, in previous efforts, amounted to striping newspapers for coins. Some of the saddest stories about the decline of local journalism came after Alden took down a town.
Cut to the bone newsrooms in places like the Denver Post and the San Jose Mercury News can no longer provide solid media coverage to their communities, and there is very little strategic thinking on how to make newspapers. sustainable in the future.
At Alden, it’s not about journalism. Everything revolves around the next income statement.
If Bainum is successful with his $ 680 million bid – which exceeds Alden’s $ 630 million – they should know a few things about owning a newspaper. The same goes for local investors they hope to sell Tribune newspapers to, including Orlando Sentinal and Allentown Morning Call.
I am not a billionaire and I have never owned anything more valuable than a house. But I can claim some expertise. For three decades, I worked for the Buffalo News, then owned by one of the richest people in the world, investor Warren Buffett. This includes the years when I was the newspaper’s first editor and a business executive. (Buffett sold all of his papers last year to Lee Enterprises.)
And a few years before coming to work at the Washington Post in 2016, Jeff Bezos – now the richest person in the world – paid $ 250 million for the struggling newspaper.
So here are my top three tips.
1. Stay out of the newsroom. And I mean, exit. Completely out. Your editor is in charge of the news; which, unfortunately, will inevitably include you and your businesses, and your family, and whatever skeletons you might have in your vast closets.
As soon as you start tinkering, the whole newsroom, and then the whole world, will know and your reputation will be shot. The same will be true for the credibility of your newspaper, which is its major asset.
I’m sure Jeff Bezos didn’t appreciate The Post’s extensive coverage of Amazon’s disputes with his workers, nor was he delighted with our coverage of the photographic indiscretions that preceded his very public divorce. But from everything I know, and everything Marty Baron just pulled out, Bezos never tried to step in or pressure.
Warren Buffett never did that either. Those of us on the editorial board certainly knew what his policy was and which national candidates he was supporting, but we felt free to make our own appeals for approval.
2. Don’t expect to be making money anytime soon. Maybe never. Your goals should be to break even and do something good for the company. Even these goals are lofty in today’s local newspapers, where a once-infallible business model has been severely disrupted, as I detailed in my 2020 book, “Ghosting the News: Local Journalism and the Crisis of American Democracy “. Buffett himself, in a 2019 interview with Yahoo Finance, depressingly described how the business had changed over many decades: “It went from monopoly to franchise, competition and… toast. ”
Some local newspapers – including the Boston Globe and the Minneapolis Star-Tribune – are finding a way forward that includes a wealthy owner, high-quality journalism, a strong connection to readership, and a smart digital plan. The Post is financially prosperous these days, but that’s in part because of a business strategy that requires the scale of a national or even global audience; which most regional newspapers cannot aspire to.
3. Realize that you bought yourself a permanent headache. News organizations are problems. They are regularly prosecuted, rightly or wrongly. Many of their employees are by nature unhappy.
I have often wondered if one of the richest doctors in the world, Patrick Soon-Shiong, regretted his decision to buy the Los Angeles Times for $ 500 million in 2018. It has been a struggle, as the newspaper reported. himself reported it in February:
“The Times was making progress on its revenue targets a year ago; until fears about the covid-19 pandemic wiped out the advertising market. The Times also grappled with internal unrest last summer and a painful toll of its historic treatment of race in the newsroom and its news pages. ”
Does he want to go out? The Wall Street Journal reported he was exploring a sale, but quickly denied it. Because Soon-Shiong owns a large chunk of shares in the Tribune company, he may well be the defining voice in whether Alden or Bainum wins.
Hopefully, despite the hard times, Soon-Shiong still believes in newspapers.
Because here is my last tip to future owners: by all means, go ahead and give it a try. The mission is worth it.
Margaret Sullivan is the Washington Post media columnist. Previously, she was editor of the New York Times and editor of Buffalo News, her hometown newspaper.