Sales are collapsing, revenue is declining, the workforce is dwindling and titles are being closed, yet America’s newspaper companies are fast becoming the trophy purchase of choice for a certain class of ultra-wealthy businessmen and women.
In less than three years, at least seven big regional newspapers have been bought up by a group that has been dubbed the “50-50 men”. They include Jeff Bezos, chief executive of Amazon, who paid $250 million in cash for The Washington Post in 2013; John Henry, principal owner of the Boston Red Sox baseball team and Liverpool FC, who paid $70 million for The Boston Globe in 2013; and Glen Taylor, owner of the Minnesota Timberwolves basketball team, who paid $100 million for the Star Tribune of Minneapolis in 2014.
Other wealthy buyers include Gerry Lenfest, who took control of The Philadelphia Inquirer in 2014 for $88 million and handed it to a philanthropic foundation this year, and Sheldon Adelson, the casino magnate, who spent $140 million on the Las Vegas Review-Journal last year. Paul Huntsman, the financier, is on the verge of buying The Salt Lake Tribune for an undisclosed sum.
Indeed, it’s not only men who are making headlines. Alice Rogoff bought the Anchorage Daily News in 2014 for $34 million,
Ken Doctor, a Politico Media analyst and columnist, said that among the 50-50s, half their motivation for buying a newspaper was economic and the other half involved civic duty.
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“They think they can figure out how to turn around an enterprise where others before them have failed,” he said. “They also believe in the democratic role of newspapers. They saw companies slashing costs and not investing in the future of news and they wanted to stop the bleeding.”
Mr Doctor differentiates these buyers from a group he calls “the consolidators”, namely Gannett, GateHouse Media and Digital First Media, which between them own 350 of America’s 1,400 dailies, are buying up titles in bulk and are ruthlessly slashing costs to make a profit. “A likely scenario with this group is that you get to the point where the newspapers have little economic value left,” he said.
As concerns linger over whether the 50-50 buyers will be able to stem the tide of losses at the titles they buy, there are fears, too, that they may try to exert undue influence on editorial content. Mr Bezos’s ownership of The Washington Post might well come in handy as Amazon expands into new areas of business and as itn faces more regulatory hurdles.
Mr Huntsman, son of the Utah industrialist and philanthropist Jon Huntsman Sr, has said that he intends to preserve the independent voice of The Salt Lake Tribune to counter fears that he may attempt to impose his family’s Mormon views on the paper.
Rick Edmonds, a media analyst for The Poynter Institute, said that he had yet not seen any evidence of creeping interventionism by most new owners. However, he added that in the case of Mr Bezos, “just the fact of his ownership of The Post may be helpful to his business”.
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Nonetheless, he notes that the situation cuts both ways. Mr Bezos is bringing much-needed investment and marketing skills, particularly in the subscription field, to The Post, he argues.
As print newspaper sales in America continue to decline, there is every chance that 50-50 owners will snap up other vulnerable titles. For example, should the Los Angeles Times become available, Eli Broad, the only person to build Fortune 500 companies in different industries — that is in KB Home, the housebuilder, and SunAmerica, the insurer — is already being touted as a potential buyer.