WIDENING
THE COVERSATION
'It's Going to Get Worse'
BY
FRANK A. BLETHEN
Public-company
ownership and concentration of ownership are incompatible with
a newspaper's public service stewardship. Combine the two and
our ability to invest in original news content and long-term reader
connection is severely limited.
Being
publicly traded means your fiduciary responsibility is to maximize
profits, which forces you to focus on short-term decision-making.
This works against long-term investment decisions and the aggressive
development of original, independent local content.
This
hasn't always been as clear as it is today.
About
twenty-five years ago, we began transitioning from mostly locally
owned, private, independent newspapers to what today has become
an industry dominated by absentee chain owners and publicly traded
companies.
The
market and its investors demand annual profit growth. In response,
the industry started using profit margins as the Holy Grail to
prove we are more profitable than most other industries.
High
and increasing margins became essential to try to interest institutional
investors who viewed us as a staid, mature industry and a dull
investment. Especially compared to the glitter and promise of
the tech and dot-com world.
In
the early stages of this transition we knew the first generation
of people who began building the public newspaper companies and
laying the foundation for today's concentration of ownership.
They were experienced newspaper operators, often with news backgrounds.
For the most part, they had respect for quality, local journalism,
and our public-service stewardship. But as time passed, the market's
short-term profit demands continued and ownership concentration
increased. We moved into a new generation of chain newspaper leaders.
Frequently, today's chains and public company leaders are business-side,
corporate people whose priority must be keeping their institutional
investors and the stock market happy. My personal epiphany occurred
in the early '90s when I realized the industry had replaced important
words like "communities" and "newspapers" with new words like
"markets" and "properties."
Perhaps
public ownership by itself wouldn't be as harmful if it weren't
for the rapid increase in ownership concentration. But there is
simply no way a large, faceless, institutional investor is going
to spend time worrying about readers, content, and the quality
of our journalism.
Today
the negative consequences of public newspaper ownership combined
with media ownership concentration has become clear. Most alarming
is that it is going to get worse. Our nation's newspaper and journalistic
voices are less diverse, independent, and bold than ever before.
Democracy and public service are not well served by this trend.
The
wonderful journalists populating our newsrooms today are fighting
the good fight. But it's a losing battle against a relentless
market. Only radical action can stem the tide. Serious limitations
should be put on ownership concentration of newspapers and other
media. And tax laws that drive privately held newspapers into
public-chain hands need to be changed. Anything short of this
and the next twenty-five years will be a sad period for the news
business and for our country.
Frank
Blethen is majority owner, publisher, and c.e.o. of The
Seattle Times. He has been one of the leaders in an effort
to eliminate the estate tax.
