Ownership Models for the Future of Newspapers
In myth and often in reality, newspapers used to be owned by grandees: wealthy and civic-minded individuals or families. Some, like the New York Times and The Post, still are. But many grandee families (their hands forced by rogue cousins who missed the lessons on noblesse oblige) have sold out to chains like Gannett.
In the burgeoning field of fretting about the future of newspapers, some think the solution is to recruit a new set of grandees. Others think a better answer is for newspapers to become officially what they are becoming in reality: nonprofit. Even as newspapers have sunk, there has been a rising tide of rich, media-oriented foundations. The grandee solution and the nonprofit-foundation solution have emerged as favorites because both offer a plausible answer to the question of how newspapers can survive without making money. Their answer is: Don't worry about it.
But which of these "models" (to use the modish term) is best?
Which will be most likely to provide the combination of financial security and editorial freedom that newspapers need? I may be able to shed some light of experience here. In a small way, I have lost the boss money (not my fault!) under both of these arrangements -- plus a couple of others. Every story is different, but to me being owned by or dependent on a nonprofit foundation is the worst possible solution.
The happiest arrangement is one that barely exists anymore in the newspaper industry: to be a flyspeck on the balance sheet of a large company with other things on its mind. For seven years I was editor of Slate, owned then by Microsoft (and now by The Washington Post Co.). We watched our pennies, but we were given what we needed to produce a good product. Never once did the company interfere with our content, no matter how much we goaded it. Never once did it even ask politely if we would publish an executive's op-ed about the future of computing. Why? Partly because we were too small to bother with. But mainly because as unsentimental business types they knew that interfering would destroy the value they were investing millions to create.
One trouble with placing your hopes in a grandee restoration is that earlier grandees made money from newspapers. Pouring money acquired elsewhere into a money-losing business is a less appealing proposition. Amazingly, though, there are rich folks who are eager to do this. Why? Based on my experience as editor of the New Republic, owned then and now by Marty Peretz and family (as well as close observation of others who have chosen to squander large fortunes on media properties), motives include sincere concern to preserve an important institution, a desire to influence the political debate, a misplaced belief that better management could make the thing profitable, hunger for status and -- believe it or not -- a desire to hang around with journalists. Hey. We're better company than horses, a more traditional way to squander a fortune.
Marty has strong opinions on a few subjects. These could be irksome but were more than outweighed by his indifference to what other people might think. Marty's great gift as a proprietor is that he will tell absolutely anybody to [expletive] off. There is no better protection for press freedom.
By contrast, when I was editor of Harper's, it was set up as a nonprofit foundation. I reported to a large board of directors. The Harper's Foundation had been established to take over and run Harper's Magazine (with money from the MacArthur Foundation, the genius-award people) for exactly the reason some today think that nonprofit foundations can be the salvation of newspapers.
The board of directors was composed of civic idealists of the highest order, all donating their time to preserve this important national institution. Not only did each of them have ruthlessly conventional views about most subjects and an inability to imagine how anyone sensible could hold any other views, each of them also had many dear friends, equally high-minded and primed to take offense at any attempt to be interesting. Many of these friends had spouses who wrote short stories and children who had just graduated with remarkable grades and were president of the Foreign Policy Club.
So can ownership by a nonprofit foundation really be worse than ownership by a chain, which is still the most common arrangement? It depends on which chain. Consider Tribune. A few years ago I worked briefly for its crown jewel, the Los Angeles Times. Since then, Tribune has plummeted in reputation from the nation's best to the nation's worst chain. Its current owner, real estate developer Sam Zell, is not one of those rich guys who likes to hang with journalists. He has become legendary as a lurid figure who keeps a dungeon under one of his office buildings in Chicago where he tortures journalists by making them watch as he burns copies of the First Amendment. Or so I'm told. That sounds worse than having to publish a board member's wife's poetry. But I gotta tell you, that poetry was really bad. Let's call it a tie.