February 24, 2018

“Stop Koch” – How Dumb Can You Be?

The liberal advocacy organization Free Press is promoting a “Stop the Koch Brothers” campaign that pleads for its members to sign the following online petition:

Dear Tribune Company:

We need journalism that serves communities, not existing agendas. We need media owners who will encourage their reporters to expose corporate and government wrongdoing. Charles and David Koch are more interested in serving their own interests than in providing the news and reporting that people need.

Don’t sell your papers to the Koch brothers.

Really? Then why didn’t Free Press put on its battle armor and try to stop Warren Buffett from buying 88 newspapers, including The Eagle of Bryan/College Station, Texas, or all of Media General’s newspapers, or the Omaha World-Herald, or the Buffalo News?

The answer is probably that the Free Press and other liberals prefer Buffett’s raise-taxes-on-the-rich politics to the avowed right-wing, lower-taxes-on-the-rich and small-government politics of the Koch brothers. Also, liberals assume that the Koch brothers would buy the Tribune Company newspapers (Los Angels Times, Chicago Tribune, and the Baltimore Sun, among others) for ideological reasons in order to promote their conservative agenda.

The conviction that the Kochs are up to their right-wing tricks also seems to be held by reporters in the target papers’ newsrooms, as reported on Harvard’s Nieman Journalism Lab This Week In Review:

The Washington Post’s Harold Meyerson said a straw poll of L.A. Times journalists revealed many of them planned to leave if the Kochs took over. (The Post’s Steve Pearlstein urged them to do just that.) Meyerson cautioned the Tribune Co.’s board not to see a sale to the Kochs as a purely financial move, but as a political move with potentially disastrous implications.

The Tribune Company has just come out of bankruptcy, and the final decision on a sale will undoubtedly be made on the basis of fiduciary responsibility by the current owners of stock, as it should be in a free-market economy, and not decided by whom the employees think is the most politically correct buyer.

For the reporters to quit if the Kochs buy the LA Times is like curators at the Metropolitan Museum of Art quitting in protest because the Kochs have been huge contributors to the great museum, or nurses quitting in protest because the Kochs gave a new wing to their hospital. Do upset journalists believe the Kochs told curators at the Met what paintings to buy or doctors at hospitals they funded how to treat patients?

And in the case of drowning newspapers such as the LA Times, employees shouldn’t care if whoever rescues them is liberal or conservative, just as long as it’s not Sam Zell, who bought the Tribune Company just to waterboard it. It’s virtually inconceivable that the Kochs could be worse than Sam Zell and Randy Michaels.

Furthermore, as pointed out in the Nieman Lab’s This Week In Review:

Forbes’ Tim Worstall argued that the potential political influence of Koch-owned newspapers was being overstated, however, because newspapers’ political views are inevitably determined by those of their audience. “Proprietors do not mould the views of the readers. They chase them instead,” he wrote. The Atlantic’s Garance Franke-Ruta made a similar point, saying that big cities make their papers liberal, not the other way around. Meanwhile, Slate’s Matthew Yglesias (a liberal himself) saw Koch-owned major papers as a possible boon for the country, as a way to improve the anemic state of conservative journalism.

Also, changing ownership of a newspaper won’t necessarily turn around its decline in readership and revenue. As Clay Shirky brilliantly points out in this interview with The European about post-industrial journalism:

The easiest way to get people in institutions to do interesting new things is for that institution to go bankrupt and for those people to change jobs. It’s often more trouble to try and modify existing institutions than it is to start new ones.

In addition, Shirky makes the point that what must change is the culture of the newspaper business, not just the ownership, business model, or procedures. Shirky implies that combining digital and traditional newsrooms is also a bad idea. I think combined newsrooms tend not to work because digital and print are two entirely different mediums with different languages, cultures, ethics, standards, ways of thinking, ways of writing, and ways of organizing.

Not only can you not combine newsrooms, but also you can’t combine sales forces. You can’t teach old-dog print salespeople to sell digital advertising – those dogs won’t hunt. I’ve seen newspaper companies make this mistake over and over because combining sales forces is a decision made by beancounters – it’s cheaper to have one ineffective sales force than to have two effective ones.

Most newspaper companies, though not all, have made one dumb decision after another for the last 15 years, and the Tribune Company is now being encouraged by liberal ideologues to make another dumb decision by not selling to the Kochs.

The Future: Non-Profit News?

On September 30, the NY Times wrote a story headlined “Balancing Bottom Lines and Headlines” by Clifford Krauss about the St. Petersburg Times in which he wrote: “Many owners of other daily city papers sold them off years ago to try to avoid inheritance taxes. But The St. Petersburg Times was not sold; to guarantee local ownership and independence, its owner, Nelson Poynter, gave it away upon his death in 1978 to a nonprofit educational organization now called the Poynter Institute.
For newspaper publishing — an industry awash in uncertainty as it tries to adapt to the Internet — The St. Petersburg Times offers one possible model for salvaging enterprises that must, as all businesses do, respond to financial reality.”
Exactly. So here’s what I propose to save journalism and the news media from itself and the greed of its owners—officially and legally become non-profit organizations. The St. Petersburg Times and NPR are the models. Their missions are not to make their shareholders ever richer, but to fulfill a public service and “trying to provide independent, high-quality information and analysis to readers” and audiences.
Joan Kroc gave a $230 million endowment to NPR that helped it become more independent, so some of the super rich ought to take a page from Joan’s book and shift some of their philanthropic giving, if they do any, to the news media. In today’s (October 2) NY Times, in an article titled “For the Yachting Class, the Latest Amenity Can Take Flight,” John Tagliabue writes about mega-yachts that feature helicopters as accessories and that these water castles’ sales are up substantially worldwide. If someone can afford a 500-foot yacht with two helicopters, the rich bitch can certainly afford to set up a non-profit foundation for a mid-market newspaper or television station.
The news media have to be freed from the tyranny of the popular—the necessity of getting ratings or circulation in order to sell enough advertising to pay the bills. Popularity, or mass, translates into lowest common denominator—Paris Hilton and runaway brides—it’s not issues and ideas.
The first non-profit that needs to be set up is one for PBS. A couple of hedge fund people could give a couple of billion dollars each, which would make PBS independent of government funding (and, thus a lot more venturesome) and allow it to beef up production of the “News Hour with Jim Lehrer” to make it less boring and more watchable.
Next, the NY Times. The Sulzberger family should get together with Arthur Junior’s good pal Steve Rattner and several other private equity and hedge fund people, buy all the publicly owned stock, and then set up a non-profit foundation to run the Times on the conditions that the Sulzberger family put all of its money except $2 million for each family member into the foundation and that Arthur never set foot in the building—give him an extra $1 million to stay away. The Times is heading toward being a non-profit under Pinch’s watch anyway, so why not make it official. With a non-profit’s obligation not to make money, the Times could continue its excellent reporting, not have to cut staff, and expand its web presence without worrying about hurting print circulation.
According to Mark J. Penn in Microtrends, the non-profit sector of our economy has outgrown the private sector at a healthy 2.5 percent clip. Young people entering the workforce enjoy the non-profit, or independent, sector of the economy because work in that sector usually has meaning and a higher purpose than pure profit, which is appealing because as Montaigne wrote, “The great and glorious masterpiece of man is to live with purpose.” Profits ain’t purpose, but serving the public is.
So let’s start urging people who are squandering their money on mega-yachts built for the self-absorbed to set up non-profit foundations for the news media that will serve the public good, convenience, and necessity and break the tyranny of the popular.

Like Any Other Business?

According to an article in the Chicago Tribune on February 22, the Chicago billionaire Sam Zell, is quoted as saying that despite the public service role of journalism, “there is no difference” between running a newspaper and managing any other for-profit business. Well, it gives me great satisfaction to tell someone who is worth several billion dollars that he’s misinformed.
The biggest trouble with the newspaper industry today is that Wall Street and other investors feel the same way–that newspapers are just like other businesses and that the public service role of journalism is a subordinate issue to making a profit. Yes, newspapers are suffering from an erosion of circulation and advertising revenue as young people go to the Web for their news, and as ad revenue, especially classified ad dollars, migrate to the Web. This revenue erosion and its multi-layered fallout that is effecting journalism was well documented in the third PBS “Frontline” program titled “News War: What’s Happening to the News,” that aired on February 27.
The “News War” program included a segment on the problems the Los Angeles Times is having because of its ownership by the publicly held Tribune Company. Big investors want the LA Times to cut editorial staff and focus on local news. It was scary watching interviews with investors Charles Bobrinskoy, vice chairman of Ariel Capital Management, and Lauren Rich Fine, managing director of Merrill Lynch.
Bobrinskoy said, “They’ve got over 20 foreign bureaus, including Istanbul and Cairo. Nobody is reading the LA Times wanting to find out what’s happening in Istanbul, so it’s critical that the LA Times figure out what it is, which is a provider of local news about what’s going on in Southern California.” In other words, the big Wall Street investor wasn’t afraid to tell the editors how to run the newspaper and tell them what kind of stories are important. What would Bobrinskoy say if James O’Shea, the editor of the LA Times, or Bill Keller, the Editor of the NY Times, told him that he didn’t know how to manage his portfolio of investments, that he had too many high-tech stocks and was too heavy in junk bonds?
Lauren Rich Fine, said on the same “Frontline” program, “I don’t believe consumers are willing to pay for the distinction between good-quality journalism and bad-quality journalism…,” thus indicating that the LA Times should concentrate on local coverage and cut staff in international and national reporting. What arrogance, what a low opinion of newspaper readers. She’s obviously speaking from interviewing a sample of one—she’s reflecting her own inability to distinguish. She probably reads The NY Post and Page Six.
When Private Capital Management CEO, Bruce Sherman, badgered Knight Ridder into selling its newspaper chain to McClatchy, it was reported that Sherman was urging Knight Ridder to sell so that his investment fund could make its targeted return and he could then get his huge bonus. Some rumors were that the bonus would be over $300 million. So when Wall Street fund managers say they are looking out for their shareholders, the translation is, “I’m looking out after my multi-million dollar performance bonus and have to find anything even remotely believable to say to justify my actions, no matter how ridiculous or harmful.”
When “Frontline” reporters, or any reporters for that matter, interview anyone from Wall Street, they should ask for full disclosure of interviewees’ financial interests in the company or industry they are being asked about. So, “Frontline” should have asked Lauren Rich Fine, “What percent of the Tribune Company stock does your fund/company own?”, “What is your annual total compensation?”, “”How much money is at stake in your performance bonus if the Tribune Company stock goes up, say three points?” “How much is your fund up or down this year?”, and “How will the percentage it’s up or down effect your bonus?” Then, when Fine says something silly about the LA Times or any company in which her fund and/or firm own stock, we’ll know how to evaluate what she says.
It’s obvious Fine wasn’t up on 35 years of scholarly research on the positive relationship between newspaper quality and profit. Esther Thorson and Murali Mantrala recently completed a study that will be published in the April issue of the Journal of Marketing. Thorson said of the study, “The most important finding is that newspapers are under-spending in the newsroom and over-spending in circulation and advertising. If you invest more in the newsroom, do you make more money? The answer is yes. If you lower the amount of money spent in the newsroom, then pretty soon the news product becomes so bad that you begin to lose money.”
But what would Fine or Bobrinskoy or any Wall Street investor know about the facts and reality of the newspaper business or, more importantly, about public service or being a public trust when their personal bonuses are at stake? The next time I see “Frontline” or any news report quoting any of these creeps, I want better reporting. I want full disclosure—I want to know what’s really at stake for the investors and corporate executives being interviewed. After all, I know what’s at stake when courageous journalists like Dean Baquet, ex-editor of the LA Times, speak out and tell the truth—their jobs, not million-dollar bonuses, are at stake.