Jeff Bezos’ acquisition of The Washington Post raised one of the biggest questions surrounding our industry. Who should own the news?
Around the world, there are as many business models as there are markets. In some countries, private ownership is a legal requirement. Others are dominated by companies owned by public corporations that are only in it for the cash. Then there are passionate family businesses, newspapers owned by interest groups such as trade unions, students, even the church, heaven forbid. There are trusts that guarantee editorial independence within a broader framework, such as The Guardian and Irish Times. Of course, in some parts of the world, the media are owned and controlled by state.
There are many magnificent Chinese media companies in terms of scale and content. But no one is deluded enough to believe the content is a true reflection of their society. Russia’s once-burgeoning free press has seen most of its newspapers acquired by oligarchs in the power’s pockets.
And there are hybrids, such as The New York Times, the Daily Mail, News Corp., which are quoted stock, but which have a strong (but maybe weakening) family control.
In mature markets we take it all for granted. Indeed in the U.K., Ireland and Australia, government has been seeking to constrain the news media and introduce various levels of oversight. But I could list for you the number of people, friends, clients and contacts, who have been harassed, jailed and murdered because of their beliefs in the positive power of the press.
So who should own the press?
It all comes down to three factors: passion, vision and viability. And there is a trichotomy between them.
In the U.S., the Graham family demonstrated a great passion for their ownership of The Washington Post. They commendably built a wider business to protect their core asset, but they have decided that their other properties will drive a better financial future for them.
The U.K.’s Guardian Media Group Trust exists to protect its core newspaper values, and it very successfully built a significant media empire that is empowered to fund its newspapers’ activities. The Guardian punches way above its weight in terms of influence, and has built an enormous online audience. But while the company has sought cost efficiencies, it still employs a generous resource.
Sweden’s Bonnier looks and acts like a quoted corporation, but it is a family business. From a bookshop in Copenhagen in 1804, it is now a $468 million corporation, operating around 175 companies in 18 countries, with 10,000 employees. Twenty percent of its revenues are from newspapers. I was privileged enough to work for Bonnier, and I learned more in two years from the culture and operation than I had in the previous 20 years in the industry.
Norway’s Schibsted was originally a family business from 1839. In 1989, its inspirational CEO Kjell Aamot persuaded the family to list the company on the Oslo stock market, but its articles of association guarantee that the newspapers enjoy distinct freedoms of expression. Today, it is perhaps the most highly regarded newspaper company in the world, but it, too now derives revenues from its diversity.
In Austria, Eugen Russ took over his family newspaper company in 1983, at the age of 22. Today, Vorarlberger Medienhaus operates in six countries and Russ is also regarded as a pioneer in the news industry.
Of course, there are countless examples of other tiny to enormous family or privately owned newspaper companies. Many are quietly achieving great results, small annual profits, sufficient to feed the family, but with a focus on reinvestment for the future.
Challenge for big pubs
The challenge is for the massive conglomerates — Gannett, Trinity Mirror, Fairfax, et al — who are caught in a battle between shareholder demand for short-term profits and the need to face up to the realities of general disinterest from society in news and the challenges of the digital age.
In the last couple of months I must have spoken to over 20 different large publishing groups in Europe and the difference in their attention to the three priorities — passion, vision and viability — is astonishingly palpable.
The best will evolve because it is in their Darwinian DNA. Some will collapse further than they already have. Others will be forced to rethink and divest. Which brings us back to the issue of who should own the news.
No need for subsidy
Let’s get one thing out of the way. There should be no need for state subsidy or intervention. There have been many discussions and reports (e.g. the European Commission High Level Review) suggesting that society requires the state to provide subsidies. One only needs to consider the issue of financial dependence with the interference of the likes of Leveson in the U.K. to know that such a route would be unacceptable.
Bezos’ acquisition of The Washington Post is not a first. Sam Zell acquired the Tribune Co. with good intentions and got his fingers well burned. As did Brian Tierney, who brought true inspiration to the U.S. industry when he acquired the papers in Philadelphia, only to fall victim to the 2008 economic collapse. At the time, he told me his objective was to bring Philadelphia back to life, and if he made money along the way that would be useful.
Within the current strategic mindset, newspapers, in the Western World at least, presently have a half-life of seven years. In that period we are going to see massive rethinking in terms of ownership. Some, like the Grahams, are going to bail out to the likes of Bezos. At the other extreme, the vanilla shareholders behind the conglomerates are going to have to think about how to divest to protect their investment.
Companies like those I described above are well set. Their strategies will lead to a point where new initiatives will outpace declines in traditional activities.
For many, the newspaper companies will have to be divested to people with the passion, vision and focus for long-term viability. This may be in the form of a straight sale, or it may be in the form of partnership. The conglomerates have rightly sought to achieve efficiencies in operations; editorial, production, advertising sales and administration. But as I’ve written so many times, there are gross differences between efficiency, economy and effectiveness. So publishers may move from being owners and controllers, to franchisers and service providers.
Here local entrepreneurs may take on the role of owner/publisher, and absorb it into their other business activities, providing the inspiration and local connectivity that is required.
What is key is that news has a pivotal role in our society. In the years to come it is essential that it be owned by people who care about its future.
Jim Chisholm can be reached at firstname.lastname@example.org.