What a billionaire can do for a paper (Hint: It’s not always good)
A blessing. A curse. A visionary. A deluded, know-it-all, out-of-their-element disaster.
If anyone knows the mixed bag a billionaire buying a media property can be, it's Dan Kennedy. He’s an associate journalism professor at Northeastern University and author of "The Return of the Moguls: How Jeff Bezos and John Henry Are Remaking Newspapers for the 21st Century." We asked Dan about the recent purchase of the Los Angeles Times and the track record of billionaires in publishing.
Dan, the newsroom of the L.A. Times cheered when it was announced that Patrick Soon-Shiong, a South African-born SoCal transplant with a net worth estimated at $7.8 billion, bought the paper. Several staffers told me how sad they were in 2013 when another billionaire, Jeff Bezos, bought the Washington Post instead of their paper. Can a billionaire "fix" a news operation in a challenging environment?
Bezos succeeded the legendary Grahams, and many people both inside and outside the Post had hoped they could hold onto it forever. Soon-Shiong follows years of chaotic ownership at the Times, culminating in some real ugliness toward the end. So it’s not surprising that staff members cheered. If Soon-Shiong can offer stability, a sense of civic responsibility and financial resources, then Southern California will be well served.
But let’s not get ahead of ourselves. Bezos has been a rousing success for reasons that can’t easily be duplicated. Other wealthy owners, even those with the best of intentions, have found that the declining fortunes of the newspaper business can only be managed, not reversed. That’s not to say there aren’t steps that can be taken to put newspapers on a firmer financial footing. But there is no miracle cure.
Incredible self-belief and determination seem to be key ingredients for self-made billionaires like Bezos and Soon-Shiong. In some ways, they are free of the blinders and experiential disappointments that can limit the imagination of some long-timers in the industry. But do they have the wherewithal to assess and accept advice — contrary to their opinions — that might prove beneficial?
Bezos may have a lot of self-confidence, but he has shown real humility in running the Post — especially on the journalistic side, where he has let executive editor Marty Baron do his job without interference. With more journalists and more resources, Baron has been able to reinvent the Post, returning it to the glory days of the 1970s and ’80s, when it competed head to head with the New York Times.
Even on the technology side, where Bezos obviously has more experience, he left in place Shailesh Prakash, the chief technologist he inherited, recognizing him as one of the best in the business. What Bezos has done is drive technological development and the customer experience, two lessons he learned from running Amazon. It would have been a disaster if Bezos had ordered Baron to cover this story or not cover that story. But it’s good for everyone when Bezos pushes for such things as faster load times, more usable apps, advancements in the content management system, and the like. The Post today is not just a great news organization. It’s a technological powerhouse as well.
What Soon-Shiong could learn from Bezos is that he should concentrate on areas where he can add real value — mainly on the business side — and respect the wall that has traditionally separated news and commerce. We don’t know whether he intends to do that yet. Some wealthy owners get it. Some don’t.
What specifically are the ingredients that have made Bezos' acquisition of The Post such a success? Have they been replicated in Boston, or elsewhere?
The Washington Post under Bezos was uniquely positioned for transformation. By virtue of its location in the nation’s capital, Bezos was able to reimagine what had traditionally been a regional newspaper as a national digital news organization, a space that he perceived — correctly — still had room for competition. He was also able to leverage the Post with Amazon in some interesting ways, offering it at a substantial discount as part of the Kindle Fire and with Amazon Prime.
Bezos’ pockets, needless to say, are unimaginably deep, but his wealth has had less to do with the Post’s success than you might think. He’s boosted the size of the newsroom, but it is still substantially smaller than that of the New York Times. The Post says it was profitable in both 2016 and 2017. Bezos has invested some of his wealth in the Post, but he has done it in a disciplined manner aimed at building a real business rather than a rich man’s plaything.
Unfortunately, the Post’s unique circumstances mean that other wealthy owners have not been able to replicate what Bezos has done. Turning around a large regional newspaper such as the Boston Globe, for instance, is almost impossible. During his first few years at the helm, John Henry unveiled several digital projects and expanded print sections, only to pull back and cut staff. He’s now having some success with paid digital subscriptions, but a new printing plant aimed at cutting costs and serving other newspapers has been beset by problems.
One other wealthy owner I examine at some length in “The Return of the Moguls” is Aaron Kushner, a Boston-based businessman who, along with a group of investors, bought the Orange County Register in 2012. Kushner really cared about local journalism and its role in building community engagement. But he expanded the Register too quickly, adding about 150 full-time journalists to a staff of 180 in a matter of months. The immediate infusion of advertising and reader revenue he had hoped for did not materialize, and in 2015 he was pushed out. If nothing else, Kushner demonstrated that simply conjuring up a return to the glory days of newspapering is not a realistic option.
McCaw and Hughes would be on anyone’s list. But my personal choice would be Sam Zell, the foul-mouthed Chicago real estate magnate who bought the Tribune papers and promptly ran them into the ground. Zell’s ownership resulted in one of the great media stories of our era — the late David Carr’s 2010 New York Times blockbuster in which he documented how Zell drove the company into bankruptcy, resulting in the loss of some 4,200 jobs, and presided over a dystopian hellhole of brutality and sexual harassment.
There is a certain symmetry in the Zell story, too. Tribune morphed into Tronc, and the turmoil that has defined that unfortunately named company is what led to the sale of the L.A. Times to Patrick Soon-Shiong. So the Zell episode continues to reverberate.
What's your early take on Patrick Soon-Shiong's chances to revitalize the Los Angeles Times?
Soon-Shiong has the financial means, if he chooses, to invest in the Times’ journalism and rebuild the paper into the great news organization that it once was. I’ve been struck that, through years of bad ownership, the Times has continued to do excellent work. So it shouldn’t take a herculean effort to set the paper right.
What is less certain is whether the Times, or any large newspaper, can re-establish itself as a profitable, thriving enterprise. If Soon-Shiong is willing to subsidize losses while giving his executives the time and resources they need to figure out a new business model, and allow his newsroom to operate with the independence that it needs, then he will be doing a tremendous service, as have Jeff Bezos and John Henry.
Of course, we all hope that that’s exactly what he’s got in mind.
Editor's note: An earlier version of this story had an incorrect spelling for Patrick Soon-Shiong's name.