Billionaires love buying newspapers

New York (CNN Business)Not all rich people spend their money on space travel and charities. Some also want to own media companies.

Jeff Bezos has The Washington Post. John and Linda Henry have The Boston Globe. Marc and Lynne Benioff have Time magazine. Laurene Powell Jobs has The Atlantic. And soon, most likely, Stewart Bainum Jr. will have The Baltimore Sun.
Bainum Jr., a businessman and former politician, is planning to take over The Baltimore Sun Media Group, a part of Tribune Publishing (TPCO), and turn it into a nonprofit. But the rest of Tribune’s papers, which includes The Chicago Tribune and The New York Daily News, will likely be owned by Alden Global Capital, a hedge fund that has become synonymous with deep cost cutting measures at newsrooms.

(From Left to Right) Laurene Powell Jobs, Jeff Bezos, Stewart Bainum Jr. and Marc Benioff
The news made some staffers at Tribune’s other papers wish they had their own Bainum Jr. The Hartford Courant, in fact, is continuing its “Save Our Courant” campaign to find an owner other than Alden.
“It’s not a guarantee it’s going to work out,” said Alexa Philippou, the Courant’s UConn women’s basketball reporter. “But we don’t want to give up. We want to put up a fight and that way, regardless of what happens, we know we worked to try and save this institution that’s been such a part of the fabric of Connecticut for longer than the country’s even been around.”

But a rich owner does not necessarily transform a newsroom into a journalism utopia. They are “not a panacea,” multiple people who work in these newsrooms told CNN Business. They do tend to alleviate the pressures that come with being a part of a publicly traded company or a hedge fund seeking high profit margins. But staffers are still at the whims of a super rich and sometimes capricious owner, and they often have to deal with some of the same issues they’d face with different owners. Employees must adapt to strategic shifts, often billed as “restructurings.” They watch as their colleagues get laid off, resources dwindle and journalism suffers. And on top of that there’s always fear that an owner could suddenly decide their hobby needs to make real money and impose painful measures as a result — or simply get bored and sell the company.

‘Spend what you earn’

When Fortune was sold in November 2018, Jake Meth was optimistic. Meth, who is currently commentary editor at the business magazine, joined in August 2016 when Fortune was a part of Time Inc. That conglomerate, home to many storied brands, had been struggling from the declining print business. In 2017 Time Inc. sold itself to Meredith Corporation (MDP), which then sold some of Time’s titles, including Fortune, which went to Thai businessman Chatchaval Jiaravanon.
“From the day I started [at Fortune], it was just chaos,” Meth, who is also unit chair of Fortune’s union, told CNN Business. “When we were bought, the thought was: ‘This person is going to invest in us.’ That’s what we were told.”

Issues of Fortune magazine are for sale at a newsstand in Manhattan on February 13, 2013 in New York City. (Photo by Mario Tama/Getty Images)
Jiaravanon expressed his commitment to “technology and brilliant journalism” at the time of the sale. Fortune moved to a swanky new office and writers focused on high impact storytelling, Meth said. Then the pandemic unfolded in the US. Fortune was among the media companies that made drastic cost cutting measures as its business took a hit. It laid off 35 employees globally and instituted pay cuts for executives.

"It was really disheartening that a quick change in the economic circumstances could have such a negative impact on the work that we were doing and permanently change it."

Jake Meth, commentary editor at Fortune and chair of Fortune's union

Meth said editorial staffers like himself in the last year have been subjected to story output quotas that disincentivize deeply reported journalism.
“It was really disheartening that a quick change in the economic circumstances could have such a negative impact on the work that we were doing and permanently change it,” Meth said. “It’s not like, ‘Hey, I’m gonna support you until the situation is over, and then we’ll focus on profit.’ It’s, ‘We need to be profiting and any loss is a big problem.'”
In an interview with CNN Business, Fortune CEO Alan Murray reiterated the owner’s commitment to investing in the magazine. He added that the layoffs were a result of the pandemic upending the live conference business, which used to be about a third of the company’s revenue and “very profitable.”
Jiaravanon “made it clear from day one that he was in it for the long term, that he buys businesses, he doesn’t sell them very often, and that he really wanted to give us the opportunity to grow,” Murray said. “It wasn’t that, ‘I’m going to give you tons of money to spend,’ but it was, ‘You can spend what you earn.'”
The Atlantic, despite being owned by Powell Jobs, one of the richest people in the world, also laid off 68 staffers, about 17% of its employees, in May. Similar to Fortune, the brand’s lucrative in-person events business had been shut down amid the pandemic.
Billionaire Laurene Powell Jobs cuts back on journalism investments
And in October Powell Jobs, who founded the Emerson Collective, also cut ties with Pop-Up Magazines Productions, which owns Pop-Up Magazine and California Sunday Magazine, after a five-year partnership. Emerson Collective told CNN Business at the time that the two organizations mutually agreed to go their separate ways with Emerson supplying Pop-Up with what it called a “substantial contribution” to keep it afloat independently.
Marc Benioff, the tech billionaire who owns Time magazine, took a different approach during the pandemic, pledging in March of last year there would be no layoffs for 90 days at his company Salesforce. Time CEO and Editor-In-Chief Edward Felsenthal joined that pledge. Benioff told CNN’s Brian Stelter in 2019 that he wanted the magazine to be “unshackled” from financial constraints.
Still, staffers in the Time union have recently expressed frustration with their management. The union’s official Twitter account tweeted last month that bargaining sessions have been “unproductive” and accused management of “unlawfully demanding” staffers leave negotiations.
“We were pleased that the company made a 90-day, no-layoff commitment, but the only way to guarantee long-term job security is with a strong contract,” said Leslie Dickstein, the unit chair of Time union.
Conflicts between management and unions are not unique to Time and occur at media companies not controlled by wealthy individuals. But there is a perception that the rich invests in newspapers and media as a matter of public service rather than as a profitable enterprise, and their wealth is supposed to help a newsroom weather an economic downturn.
A Time spokesperson told CNN Business that the company’s workforce has grown 65% since Benioff’s acquisition.
“[W]e are deeply committed to our world-class team. A fair contract that is both good for employees and sets the company up for continued success remains a key priority for TIME and we are eager to reach an agreement,” the spokesperson added.

Turnaround stories

Bezos’ ownership of The Washington Post is often heralded as an example of a successful relationship between a struggling paper’s savior and its beleaguered newsroom.
Bezos’ investment in technology and talent allowed the newsroom to produce some of the most consequential stories in accountability journalism. The public took notice: Within three years of Bezos’ acquisition in 2013, the Post became profitable and its web traffic doubled. The Washington Post said in 2017 it had crossed 1 million paid digital-only subscribers. It now boasts more than 3 million subscribers.

Washington Post owner Jeff Bezos takes part in a "digital ribbon cutting" during the inauguration of the Washington Post Headquarters on January 28, 2016 in Washington, DC.
“Jeff fundamentally changed the strategy of the Post, and that made all the difference in the world,” Marty Baron, the Post’s former executive editor, told Vanity Fair in an interview pegged to his recent retirement. “And then he did make an investment that gave us runway. We were able to sort of build a bridge toward digital without having to make severe cuts in what we were already doing.”
A similar change of circumstances occurred in Boston, days before Bezos announced he was buying the Washington Post. The billionaire owner of the Boston Red Sox, John Henry, bought The Boston Globe from The New York Times (NYT).

"When the Henrys bought us, it was just an enormous relief to me and to a lot of people at the Globe. In the early years of their ownership, they were willing and able to absorb really significant losses."

Brian McGrory, The Boston Globe's top editor

“When the Henrys bought us, it was just an enormous relief to me and to a lot of people at the Globe,” said Brian McGrory, the Globe’s top editor. “In the early years of their ownership, they were willing and able to absorb really significant losses.”
Last May, The Globe surpassed its goal of 200,000 digital-only subscribers and now has more than 220,000. A subscription to the Globe — 99 cents per day — is also pricier than other papers. The Globe was profitable last year and is operating profitably in 2021.
But amid contract negotiations the Globe’s union has launched a public campaign that contends the paper is “in crisis.” More than two dozen journalists have left over the course of the negotiations, according to Victoria McGrane, politics editor at the Globe and vice president of Boston Newspaper Guild, which represents staffers at the Globe.
“Our contract fight shows that wealthy owners aren’t a panacea,” McGrane said. “We believe that the longstanding protections that we’ve had in our legacy contract that they’re seeking to strip away will continue to drive talented staff to leave, and it will hurt the quality of the news product that we’re producing.”
McGrory disagreed that the company is in a crisis.
“We’re on solid financial ground. We’re growing. We’re investing,” McGrory said. “Management is trying to reach a settlement with the guild, but this is not, to me, a crisis. It is a challenging labor negotiation.”

The ideal owner

Philippou, the Courant reporter, said an ideal owner for the Connecticut paper would be someone who wants to “hire staff, invest in the newsroom. People always talk about how the newspaper model is broken. I would hope for an owner who is willing to experiment.”
Ted Venetoulis, a businessman and the former county executive of Baltimore County, suggested that local media ownership is more than simply providing financial backing.
“It’s local ownership and that it operates as a nonprofit,” Venetoulis, who has published research about nonprofit newsrooms, said. “That removes immediately the concern that there is some ideological motive behind the wealthy person using it for their own purposes, in terms of ideology or business.”

Stewart Bainum Jr.
That “ideological motive” was a concern for staffers at the Las Vegas Review-Journal after Sheldon Adelson bought the paper in 2015. The billionaire casino magnate, who died in January, was a prominent Republican Party donor. The paper’s publisher told the newsroom at the time of the sale that he was told the new owners would not influence coverage. But Jim Wright, the paper’s deputy editor at the time of the sale, told CNN in 2017 coverage of issues Adelson cared about “pretty much comes out of public relations.”
More newsrooms have been converting to or launching as nonprofit businesses, a status that requires these outlets to serve a public good — not personal interests — and allows supporters to make tax deductible donations. The Salt Lake Tribune switched to a nonprofit in 2019. The 19th*, which covers the intersection of gender, politics and policy, launched as a nonprofit last year. It was cofounded by Emily Ramshaw, former editor in chief of The Texas Tribune — another successful nonprofit.
Venetoulis, who cofounded the “Save Our Sun” campaign and discussed the acquisition of The Baltimore Sun with Bainum, said that one of Bainum’s “most important” qualities is his “decency.”

Stewart Bainum Jr. "knows that when you own a newspaper, you've got to be a very judicious owner. You can't just use all the tricks in business."

Ted Venetoulis, former Baltimore County executive and businessman

“He’s a pragmatist,” Venetoulis said. “He knows that when you own a newspaper, you’ve got to be a very judicious owner. You can’t just use all the tricks in business. It requires an understanding that whatever you’re distributing there is going to get to the public and has to be done in a fair and transparent way.”
That sentiment played out at the Los Angeles Times. The Times escaped ownership of Tribune, known as Tronc at the time, in 2018 when biotech billionaire Dr. Patrick Soon-Shiong bought the paper to incredible fanfare. But the staff there has had examine and reckon with its own racial biases in the newsroom and in its coverage. Soon-Shiong acknowledged these problems and committed to change and The Times editorial board apologized for them last year.
The Wall Street Journal recently reported Soon-Shiong was considering selling The Times. Soon-Shiong denied the claims, but it brought renewed attention to the fact that rich media owners could always sell. Last year, Warren Buffett’s Berkshire Hathaway sold its 31 local newspapers.
Matt Pearce, national correspondent for The Times and president of the Media Guild of the West, wrote to guild members that the staffers’ union “will be ready to mobilize” if anything were to happen.

    “Journalists, and our readers, deserve better than a news industry where we have to worry about our owners,” Pearce wrote. “I promise you our union will keep fighting for the stronger, better, independent newsrooms our communities deserve.”
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