Billionaires have had a pretty good pandemic. There are more of them than there were a year ago, even as the crisis has exacerbated inequality. But scrutiny has followed these ballooning fortunes. Policymakers are debating new taxes on corporations and wealthy individuals. Even their philanthropy has come under increasing criticism as an exercise of power as much as generosity.
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One arena in which the billionaires can still win plaudits as civic-minded saviors is buying the metropolitan daily newspaper.
The latest example comes in the form of a $680 million bid by Hansjörg Wyss, a little-known Swiss billionaire, and Stewart W. Bainum Jr, a Maryland hotel magnate, for Tribune Publishing and its roster of storied broadsheets and tabloids like the Chicago Tribune, the Daily News and The Baltimore Sun.
Should Wyss and Bainum succeed in snatching Tribune away from Alden Global Capital, whose bid for the company had already won the backing of Tribune’s board, the purchase will represent the latest example of a more than decade-long quest by some of America’s ultra-wealthy to prop up a crumbling pillar of democracy.
If there was a signal year in this development, it came in 2013. That is when Amazon founder Jeff Bezos bought The Washington Post and the Red Sox’s owner, John Henry, bought The Boston Globe.
“I invested in The Globe because I believe deeply in the future of this great community, and The Globe should play a vital role in determining that future,” Henry wrote at the time.
Bezos and Marty Baron, the recently retired editor of The Post, famously led a revival of the paper to its former glory. And after a somewhat rockier start, experts said that Henry and his wife, Linda Pizzuti Henry, CEO of Boston Globe Media Partners, have gone a long way toward restoring that paper as well.
Across the country, for Dr Patrick Soon-Shiong, the physician and billionaire who bought the Los Angeles Times in 2018, it hasn’t always gone smoothly. But few prefer the alternative of hedge-fund ownership. “There’s not a doubt in my mind that the Los Angeles Times is in a better place today than if Tribune had held onto it these last three years or so,” said Norman Pearlstine, who served as executive editor for two years after Soon-Shiong’s purchase and still serves as a senior adviser. “I don’t think that’s open to debate or dispute.”
From Utah to Minnesota and from Long Island to the Berkshires, local grandees have decided that a newspaper is an essential part of the civic fabric. Their track records as owners are somewhat mixed, but mixed in this case is better than the alternative.
Researchers at the University of North Carolina at Chapel Hill released a report last year showing that in the previous 15 years, more than a quarter of American newspapers disappeared, leaving behind what they called “news deserts.” The 2020 report was an update of a similar one from 2018, but just in those two years another 300 newspapers died, taking 6,000 journalism jobs with them.
“I don’t think anybody in the news business even has rose-colored glasses anymore,” said Tom Rosenstiel, executive director of the American Press Institute, a nonprofit journalism advocacy group. “They took them off a few years ago, and they don’t know where they are.”
“The advantage of a local owner who cares about the community is that they in theory can give you runway and also say, ‘Operate at breakeven on a cash-flow basis, and you’re good,’” said Rosenstiel.
“The communities that have papers owned by very wealthy people in general have fared much better because they stayed the course with large newsrooms,” said Ken Doctor, on hiatus as a media industry analyst to work as CEO and founder of Lookout Local Inc., which is trying to revive the local news business in smaller markets, starting in Santa Cruz, California. Hedge funds, by contrast, have expected as much as 20 percent of revenue a year from their properties, which can often only be achieved by stripping papers of reporters and editors for short-term gain.
Alden has made deep cuts at many of its MediaNews Group publications, including The Denver Post and The San Jose Mercury News. Alden argues that it is rescuing papers that might otherwise have gone out of business in the past two decades.
And a billionaire buyer is far from a panacea for the industry’s ills. “It’s not just, go find yourself a rich guy. It’s the right rich person. There are lots of people with lots of money. A lot of them shouldn’t run newspaper companies,” said Ann Marie Lipinski, curator of the Nieman Foundation for Journalism at Harvard and former editor of the Chicago Tribune. “Sam Zell is Exhibit A. So be careful who you ask.”
Zell, a real estate maverick and billionaire whose nickname is “the grave dancer,” took Tribune Publishing private in a leveraged buyout in 2007. The company filed for bankruptcy the next year. His brief tenure helped set in motion the events leading to the Alden Capital bid.
Other rescuers have come and gone. There was a time when Warren Buffett looked like a potential savior for newspapers, investing in them through his company Berkshire Hathaway. He has since beat a retreat from the industry. And there have even been reports that Soon-Shiong has explored a sale of the Los Angeles Times (which he has denied).
“The great fear of every billionaire is that by owning a newspaper they will become a millionaire,” said Rosenstiel.
After cable television entrepreneur H.F. (Gerry) Lenfest bought The Philadelphia Inquirer, he set up a hybrid structure. The paper is run as a for-profit, public benefit corporation, but it belongs to a nonprofit called the Lenfest Institute. The complex structure is meant to maintain editorial independence and maximum flexibility to run as a business while also encouraging philanthropic support.
Of the $7 million that Lenfest gave to supplement The Inquirer’s revenue from subscribers and advertisers in 2020, only $2 million of it came from the institute, while the remaining $5 million came from a broad array of national, local, institutional and independent donors, said Jim Friedlich, executive director and CEO of Lenfest.
“I think philosophically, we’ve long accepted that we have no museums or opera houses without philanthropic support,” said Lipinski. “I think journalism deserves the same consideration.”
Bainum has said he plans to establish a nonprofit group that would buy The Sun and two other Tribune-owned Maryland newspapers if he and Wyss succeed in their bid.
“These buyers range across the political spectrum, and on the surface have little in common except their wealth,” said Friedlich. “Each seems to feel that American democracy is sailing through choppy waters, and they’ve decided to buy a newspaper instead of a yacht.”
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