June 4, 2018

The rough outline for “The Return of the Moguls” came together during a four-day period in August 2013.

Late on a Friday afternoon reports began circulating that John Henry, a billionaire financier who was the principal owner of the Boston Red Sox, would buy The Boston Globe and its affiliated properties from The New York Times Co. for the shockingly low price of $70 million. The following Monday came even more startling news: Jeff Bezos, the founder and chief executive of Amazon, would purchase The Washington Post from the legendary Graham family for just $250 million.

Every journalist knows you need three for a trend story. At the same time that the Henry and Bezos stories landed, a young entrepreneur named Aaron Kushner had been garnering praise and curiosity for building up The Orange County Register and placing a renewed emphasis on its print edition.

And so I set about following the progress of Bezos, Henry, and Kushner with the idea of writing a book about how they were reinventing their newspapers and what lessons that might hold for the rest of the beleaguered news business.

For a long while, I wasn’t sure what my theme was except that all three were wealthy and might be able to apply their business acumen to the seemingly unsolvable problem of restoring newspapers to financial health.

Over time, though, a broader theme started to come into focus. All three had come along during the last gasps of the free digital news era. For more than two decades, newspaper executives had hoped they could make a successful transition to the internet by giving away their journalism and paying for it through advertising.

By 2013, it was becoming clear that might never happen. Visions of multimedia advertising riches for digital newspapers had long since given way to the reality of Craigslist, Google and Facebook.

So how did the three moguls respond to this challenge?

In Southern California, Aaron Kushner announced a few months after taking over The Orange County Register that he would charge exactly the same for digital that he did for print — $1 a day. Moreover, he lavished attention on the print edition, even improving the quality of the newsprint.

It wasn’t an especially forward-looking approach, but it could have been successful in the short and medium term given that print advertising, though on the wane industry-wide, has retained more of its value than digital has.

But rather than bolster his reporting corps by a modest but sustainable number, Kushner added about 150 full-time journalists to his staff of 180 in a matter of months. He and his investors followed that up by purchasing The Press-Enterprise of Riverside, launching a new paper in Long Beach, and then, finally, starting a new daily in Los Angeles, in the shadow of the mighty Los Angeles Times.

Neither the Long Beach nor the Los Angeles experiments panned out. Kushner, though wealthy, was not in the same financial league as Bezos and Henry. He was cast aside by his investors in early 2015, with the Register and The Press-Enterprise ultimately being sold at bankruptcy to Digital First Media.

The verdict on Henry’s ownership of the Globe has yet to be rendered. Early on he put his resources into expanded print sections covering football, politics and business, as well as starting free online verticals covering the Catholic Church (Crux) and health and life sciences (Stat).

He has had to retreat on some of those ventures; he spun off Crux to John Allen, the journalist he recruited to be its star columnist, and though Stat is still around and doing good work, it has shrunk a bit and now emphasizes paid content.

During the past few years, Henry has shifted his attention toward some smart cost-cutting moves whose execution, unfortunately, has been dreadful.

First the Globe changed home-delivery distributors, a disaster that required the paper’s journalists to help deliver papers for several weeks before the original vendor was brought back on board. Then, last summer, the paper closed its massive plant in Dorchester, moved its news and business operations to downtown Boston, and opened a new printing plant in the exurbs that for months was beset by poor quality and late delivery.

Those problems have diminished but have not entirely gone away.

In late May the Globe announced a new round of buyouts and possible layoffs, although no numbers were provided. The paper has also been beset by allegations that its star columnist, Kevin Cullen, may have fabricated material and that the editor, Brian McGrory, engaged in sexual harassment — a charge McGrory has emphatically denied. 

Despite these setbacks, the Henry era has been defined by the belief that the Globe should charge for its journalism, and on that front, the paper has experienced some success. With a non-discounted price of $30 a month, the Globe charges more for digital subscriptions than any general-interest paper, and it is reportedly on target to pass the 100,000 mark during the first half of 2018. It charges more than $1,000 a year for home print delivery as well.

If reader-supported journalism is the future of the newspaper business, then the Globe may be on its way to sustainability.

Unlike Henry and certainly unlike Kushner, Bezos’s stewardship of the Post has been a rollicking success. Bezos, though, had some advantages, and not just the obvious advantage of being the world’s wealthiest person.

First, because of the Post’s location in the nation’s capital, Bezos was able to reposition what had traditionally been a regional newspaper as a national digital news source that competes head to head with The New York Times. There is nothing more difficult in the current media environment than operating a large regional newspaper. Bezos simply got out of that game, though the Post continues to publish a print edition for readers in the Washington area.

Curious to learn more about The Washington Post's digital buildout? Apply for our Media Innovation Tour to sit in on an editorial meeting and talk to managing editor of digital Emilio Garcia-Ruiz. 

Second, Bezos was able to leverage the Post with Amazon in some interesting ways that would presumably not be available to other papers. The Post is available at a steep discount on Amazon Prime, and a Post app comes preinstalled on the Kindle Fire. Those moves have enabled Bezos to offer a high-quality national news source as a benefit to Prime members along with music, video and, of course, books.

Third, Bezos inherited a talented technology team and gave it the resources it needed to move ahead on multiple projects. Though Post technology is present in everything from Arc, its in-house content management system, to the algorithms it uses to recommend newsletters, the Post’s tech is most visible in its website as well as its attractive, easy-to-use apps for phones and tablets.

The result of all this is an operation that is growing and making money. Although the Post, as a privately held company, is guarded in the numbers that it releases, it claims to have been profitable for each of the past two years and to have signed up more than a million paid digital subscribers — fewer than The New York Times’s 3 million-plus, but more than just about anyone else.

The fate of newspapers, whether in print or online, matters to democracy. Despite the battering they have taken during the past several decades, they remain crucial for holding government and other large institutions to account. The media scholar Alex Jones has written that newspapers are responsible for much of the “iron core” of accountability journalism that we need to govern ourselves.

The story I tell in “The Return of the Moguls” is the story of how that iron core might be preserved.

More from Poynter: An excerpt of "The Return of the Moguls." 

Dan Kennedy will be speaking about his new book, “The Return of the Moguls: How Jeff Bezos and John Henry Are Remaking Newspapers for the Twenty-First Century” (ForeEdge), at the National Press Club in Washington on Wednesday, June 13, at 6:30 p.m. Details here.

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