Monday, April 28, 2014

Unchaining newspapers

American print journalism has been undergoing wrenching changes for nearly two decades now, and some encouraging trends are emerging.

The most obvious is what America’s best journalist on the business of journalism is calling the “deconsolidation of the U.S. press.” That’s what blogger Ken Doctor is calling the phenomenon of wealthy people, from Amazon’s Jeff Bezos to Warren Buffet, buying up newspapers for reasons that aren’t entirely financial.

Doctor, on his blog, “Newsonomics,” writes recently that when the buyer of the Minneapolis Star-Tribune was asked whether his purchase was for business or altruistic reasons, he replied, “50-50.”

The latest such transaction was the sale of the Anchorage Daily News by Alice Rogoff, former chief financial officer of U.S. News and World Report. Rogoff and her husband, David Rubinstein, are worth more than $3.1 billion. They’ve been publishing a feisty local alternative to the larger daily they just bought from the McClatchy chain.

During the golden era of newspaper publishing – roughly the last half of the 20th century – many local owners sold to national and multi-national chains because the money was good, with margins often exceeding 25 percent. The Post Register only sniffed at those kinds of numbers, mostly because its owners often invested more heavily in news and other resources than mega-business owners.

Now, newspapers are less attractive in purely financial terms, so the trend is reversing. Local people of means are buying newspapers, at least in part because they want to preserve the sense of place that local or small-group ownership can provide.

While no one can blame business people for wanting to maximize profits – what’s more American, after all? – local newspapers have always been about more than just the money.

Glen Taylor, the new owner of the Star-Tribune, said his purchase was not a deal based purely on business. (He’s already a billionaire, after all.)

“I’m interested in this one because it’s a Minnesota paper,” Taylor said. “For the long run, if we can continue to have a news media that’s consistent, fair, broad-based … I think it’s in the interest of our state. I would be proud to be part of that.”

“What’s most interesting about this spate of buys is that they are local,” writes Doctor. As he notes, there’s opportunity for local print media in the digital environment, “but it’s a tough, years-long slog.”

It’s easy to see the day when local or small-group ownership is the rule, not the exception, and that will be good for the communities they serve.

Doctor’s conclusion: “It’s dizzying change for what used to be a staid industry. … the unwinding of the chains is real. The post WWII logic of buying and building holds far less logic financially.”

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