Around the world, there are as many business models as there are markets. In some countries private ownership is a legal requirement. Others are dominated by companies owned by public corporations that are only in it for the cash. Then there are passionate family businesses, newspapers owned by interest groups, such as trade unions, students, even the church, god forbid. There are trusts that guarantee editorial independence within a broader framework, such as The Guardian and Irish Times. Of course in some parts of the world the media are owned, and controlled by state.
There are many magnificent Chinese media companies, in terms of scale, and content – but no-one is deluded enough to believe the content is a true reflection of their society. Russia’s once burgeoning free press has seen most of its newspapers acquired by oligarchs in the pockets of the even more powerful.
And there are hybrids, such as the New York Times, the Daily Mail, News Corp, which are quoted stock, but which have a strong (but maybe weakening) family control.
In mature markets we take it all for granted. Indeed in the UK, Ireland and Australia government has been seeking to constrain the news media, and introduce various levels of oversight.
But I could list for you the number of people, friends, clients, and contacts, who have been harassed, jailed and murdered because of their beliefs in the positive power of the press.
So who should own the press?
It all comes down to three factors: passion, vision and viability. And there is a trichotomy between them.
In the USA, the Graham family demonstrated a great passion for their ownership of theWashington Post. They commendably built a wider business to protect their core asset, but they have decided that their other properties will drive a better financial future for them.
The UK’s Guardian Media Group Trust exists to protect their core newspaper values, and they very successfully built a significant media empire that is empowered to fund their newspapers’ activities. The Guardian punches way above its weight in terms of influence, and has built an enormous online audience. But while the company has sought cost efficiencies, it still employs a generous resource.
Sweden’s Bonnier looks and acts like a quoted corporation, but it is family business. From a bookshop in Copenhagen in 1804, it is now a €3 billion corporation, operating around 175 companies in 18 countries, with 10,000 employees. Twenty per cent of their revenues are from newspapers. I was privileged enough to work for them, and I learned more in two years from their culture and operation, than I had in the previous 20 years in the industry.
Norway’s Schibsted was originally a family business from 1839. In 1989 their inspirational CEO, Kjell Aamot persuaded the family to list the company on the Oslo stock market, but their articles of association guarantee that their newspapers enjoy distinct freedoms of expression. Today, they are perhaps the most highly regarded newspaper company in the world, but they too now derive their revenues from their diversity.
In Austria, Eugen Russ took over his family newspaper company in 1983 at the age of 22. Today his company operates in six countries, and he is also regarded as a pioneer in the news industry.
Of course there are countless examples of other tiny to enormous family or privately owned newspaper companies. Many are quietly achieving great results, small annual profits, sufficient to feed the family, but a focus on reinvestment for the future.
The challenge is for the massive conglomerates – Gannett, Trinity Mirror, Fairfax, et al – who are caught in a battle between shareholder demand for short-term profits, and the need to face up to the realities of a general society disinterest in news and the challenges of the digital age.
In the last couple of months I must have spoken to more than 20 different large publishing groups in Europe, and the difference in their attention to the three priorities – passion, vision and viability – is astonishingly palpable.
The best will evolve because it is in their Darwinian DNA. Some will collapse further than they already have. Others will be forced to rethink, and divest. Which comes back to the issue of who should own the news.
Let’s get one thing out of the way. There should be no need for state subsidy or intervention. There have been many discussions, and reports (e.g. the European Commission High Level Review), suggesting that society requires the state to provide subsidies. One only needs to consider the issue of financial dependence with the interference of the likes of Leveson in the UK to know that such a route would be unacceptable.
Bezos’ acquisition of the Washington Post is not a first. Sam Zell acquired the Tribune Group with good intentions and got his fingers well burned. As did Brian Tierney, who brought true inspiration to the US industry when he acquired papers in Philadelphia, only to fall victim to the 2008 economic collapse. At the time he told me his objective was to bring Philadelphia back to life, and if he made money along the way that would be useful.
Within the current strategic mindset, newspapers, in the Western World at least, currently have a half-life of seven years. In that period we are going to see massive rethinks in terms of ownership. Some like the Grahams are going to bail out to the likes of Bezos. At the other extreme the vanilla shareholders behind the conglomerates are going to have to think about how to divest to protect their investment.
Companies like those I described above are well set. Their strategies will lead to a point where their new initiatives will outpace their declines in traditional activities.
For many, the newspaper companies will have to be divested to people with the passion, vision and focus on long-term viability. This may be in the form of straight sale, or it may be in the form of partnership. The conglomerates have rightly sought to achieve efficiencies in operations; editorial, production, advertising sales, administration. However, as I’ve written so many times, there are gross differences between efficiency, economy and effectiveness. So publishers may move from being owners and controllers to franchisers and service providers.
Here local entrepreneurs may take on the role of owner/publisher, and absorb it into their other business activities, providing the inspiration and local connectivity that is required.
What is key is that news has a pivotal role in our society, and it is essential that in the years to come it is owned by people who care about its future.
- Jim Chisholm is an independent media consultant based in France