Thursday, February 08, 2007

Billionaire newspaper owners

Are billionaires the future of newspapers? It’s the question that Vanity Fair is exploring and Warren Buffet as well.

In the March issue of Vanity Fair, Michael Wolff explores the sudden interest from billionaires in snapping up US newspapers.

Former GE chief Jack Welch is reported to be interested in buying the Boston Globe; supermarket king and Clinton buddy Ron Burkle ($2.5bn) and real-estate giant Eli Broad ($5.8bn), bidding for the Tribune Company; and David Geffen is said to be considering a bid to buy the Los Angeles Times.

He's the kind of owner a journalist wouldn't mind. He put Nirvana on the map and recently told The Wall Street Journal: "I'm not interested in buying things simply to make money. I'm interested in doing something that's going to be valuable for the community, where I can make a difference... I would devote my resources to building a first-class national newspaper."

There are others out there too. Billionaire investor Warren Buffett is building a stake in The New York Times. And Buffett likes his newspapers. He is already on the board of The Washington Post and he owns the daily newspaper in Buffalo, New York, the Buffalo News. Clearly The New York Times is the jewel in the US newspaper crown.

With free newspapers and the web withering away paid-for sales as a new generation refuses to buy and wants to read it online for free, many industry analysts have long posited that there no long term future for newspapers in print.

Maybe within 20 years, in the space of a generation, newspapers could be an endangered species and perhaps little more than the play things of billionaires.

This could have its upside. If these titles are put into trusts their future could be assured in some form, but Wolff is worried particularly when he looks at the pro-business credentials of Welch whose arrival would be feared by those Boston Globe liberals.

"Actually, it is not impossible to imagine, in this age of so many billionaires, that competing billionaires would want competing papers. That you can't be an effective or prideful billionaire without your own paper. New York City has the most robust newspaper market in the nation because billionaire Mortimer Zuckerman's break-even-ish Daily News competes against billionaire Rupert Murdoch's certainly-money-losing New York Post.

"Even the more fundamental worry of journalists, that billionaires are cheapskates (no doubt they are), might be, in this circumstance, unfounded. The cheapskates in Philadelphia aside (and their problem seems to be they just weren't rich enough to buy a paper), Murdoch has spent his way at the New York Post into being Murdoch, which is worth much more than the millions he's losing on the Post every year (Murdoch, doubling-down, reportedly might be a buyer of the Tribune Company's Newsday, on Long Island).

"Of course, the internet is a bitch. On the other hand, the internet is an inefficient way for a big man to throw his weight around. A newspaper really is the much more effective bully pulpit.

"What's more, given a host of new papers --The Daily Geffen, The Welch Globe, The Greenberg Times, The Broad Journal, The Burkle Shopper -- freed from the deadening template of the people who theoretically know how to run newspapers, maybe the people who know nothing at all about newspapers will stumble onto something that makes them shout and sing (Eli Broad recently offered that it might be a good idea if the L.A. Times had more pictures of donors at charity events....well … maybe)."

Read the rest of the article in Vanity Fair.


At 11:13 PM, Anonymous Anonymous said...

Shame on you. You should not state that Buffett is buying a newspaper stock when, at the present time, it is nothing more than a rumor.


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