Dan Gross at Slate had a great piece up about the decline of Newspapers in America and it causes. His main point is that, contra popular belief; the internet did not and is not killing the Daily papers.
Rather, many of the papers that are folding had incompetent management, with heavy debt, running a company with declining revenue. He cites Sam Zell’s Real Estate expertise as a sure marker of Editorial and Publishing success. And of course, a little PR savvy is all you need to run a major newspaper, so Brian Tinery at the Philadelphia Daily News and Inquirer was a natural fit. Yes, let’s buy a newspaper franchise at $562M, $100M+ more then the next bidder, its ok we have a $450M credit line. Awesome!
But let’s not forget the one bon afide media genius of the pack, Conrad Black. Who confessed to stealing millions from Sun-Times Media during the 1990’s. While they were profitable then, the resulting tax liability, has financially held the firm’s head underwater. And as you know, are now also in bankruptcy.
It should be noted from a financial perspective Private Equity enterprises, as all of the above are, always operate from a heavy debt position, because being private they have no access to the equity markets for capital expansion.
Yet, one of my favorite people on the internet, a commentator on Barry Ritholtz’s blog The Big Picture, Marcus Aurelius responded to the fact that The New York Times and The Washington Post are both publically traded, and in the financial crapper:
We have experienced the dumbing-down, politicization and propagandizing of what were formerly true “news” organizations. What was formerly an adversarial relationship – that between the newspapers and the interests they investigated – has become a cozy relationship marked by access to “inside” information and functionaries, for the cost of repeating the party line.
Too often, what passes for news is misinformation, at best. A good example is Chris Whalen’s earlier post here at TBP – AIG: Before CDS, There Was Reinsurance. I doubt many papers will run stories related to this chicanery, and those that do will bury the story in favor of fluff.
The public wants less reporting and more investigation. If they can’t get hard facts and critical analysis from traditional sources, they’ll turn to non-traditional. The public (a.k.a. The Market) is speaking clearly to Big Corporate Media.
Italics mine
In my mind this gets to the heart of the matter not only for the newspapers, but infotainment in general (Fox & CNBC in particular). Within their ranks, journalist do not measure each other by the stories they break, they measure by the level of access. The causes are many, but the feed stock for this perversion is a group of publishers that love access just as much, but are still hamstrung to ensuring monthly debt payments.
My overall point, the one that Gross hints at and Aurelius nails, is that both ways are doomed to failure. Right now the poles are between “Pinch” Sulzberger with Bill Keller, who in their deification of ‘journalism’, have coddled their reporters from the bottom line to the point where the only way forward they see involves non-profit status, or some kind of charitable giving, akin to PBS, just to keep the model afloat. Or you have Roger Alies at Fox, who bases pay scales on Nielsen Ratings and the ability to cross leverage News Corp assets across mediums.
Thus, we have a world in which quality can’t compete and ranting counts as ‘news’. Neither situation is acceptable, and yet with the current management class that all we can get. In my opening salvo I mentioned that Editors and Publishers need to marry, and this is why I said that. Until the Edit and Publishing relationship gains some symmetry, where writers recognize that yes, they need to be concerned with money; and publishers stop treating their writers as power tools (Denton & Huffington), we will continue to have the worst of all worlds.
