by Pete Mazzaccaro
We’re one week into August: High vacation season here in Chestnut Hill. The phone stops ringing. Emails go unanswered, save for the recurring “out-of-office” replies that pile up in my in-box.
News here in the neighborhood has been slow to come by as well. All has been quiet in Chestnut Hill. Now that the Pastorius Park Concert Series has ended, it’s essentially a month-long wait for September when people return from the shore and go back to work.
The last several days, however, have not been quiet for the news business. Two big deals have dramatically changed ownership, and perhaps the direction, of two major American newspapers.
On Friday we learned that John Henry, an investment banker who owns both the Boston Red Sox and the LiverpoolFC soccer club, was going to purchase The Boston Globe for some $70 million from The New York Times.
Late on Monday an even greater shock was reported. The Graham family, which has owned The Washington Post for generations and built it into one of the most respected news organizations in the world, has agreed to sell the business to billionaire Amazon CEO Jeff Bezos for $250 million.
It’s hard not to see these transactions as proof positive that the newsprint business is in serious trouble – that the news business is not the sort of private enterprise that can sustain the sort of growth demanded by investors in the public market. It’s hard not to imagine that we’ll soon read of a similar fate at The New York Times. The business of the news has not been a winner.
In an interview, Donald Graham, president and CEO of The Washington Post, said his company had seen rapidly declining revenue for seven straight years. His sale to Bezos was an admission that the company no longer knew how to steer The Washington Post to profitability.
With both transactions comes the fear that private owners like Henry and Bezos will find it difficult not to exert control over coverage. Also, these businessmen have a predisposition to secrecy that might make sense in their respective businesses, but not in the media business where the best policy is always about being open. It’s about building relationships with readers as well as advertisers.
It’s easy to see, however, how papers as publicly held businesses have been a big part of what hurt them to begin with. Knight-Ridder, the company that at one time owned dozens of newspapers across the country, including The Philadelphia Inquirer, dissolved primarily because investors demanded profits and a growth rate of 20 percent and more – a margin that flies in the face of building a long-term institution that depends on the public’s trust to succeed.
What will these new investors do to turn around these shrinking businesses? How will they build reader trust? How will they convince advertisers to remain paying customers?
Well-known author and journalist Jeff Jarvis (brother of Chestnut Hill Presbyterian pastor Cindy Jarvis) said in a Google post on Tuesday morning that he’s hopeful that Bezos, in particular, would help lead the way in finding a business model that would help rescue not only the Post but other newspapers as well.
It’s definitely an uncertain time for newspapers and the business of journalism. But the future doesn’t necessarily have to look so dim. Perhaps we’ll witness the rejuvenation of these institutions. Let’s hope so.