Billionaires buying newspapers, whether for vanity or public service, may be the best hope for the future of journalism.


By Jeffrey Cole

The past 20 years have not been good for the newspaper business. Print journalism was disrupted by the internet with little warning. Much of the advertising revenue that sustained quality print journalism has been transferred to Google and Facebook, leaving most newspapers a shell of their former selves.

Some of the best-known newspapers in America have disappeared, others have suspended their print editions, and some have reduced the frequency of publication to the most profitable days (Thursday, Friday and Sunday).

At the Center, we have seen for 18 years that interest in news and information is greater than it has ever been; however, that interest does not easily translate into reading newspapers. Sadly, we see that every time a print newspaper reader dies, he or she is not replaced by a new reader. The ultimate outcome is clear and inevitable.

In the midst of all this bad news, there are some very encouraging developments. The digital divisions of America’s leading newspapers are booming. In this column I look at four of America’s best known, most successful, and award-winning newspapers: the Washington Post, the Wall Street Journal, the Los Angeles Times, and The New York Times.

In the first days of the internet, leading newspapers saw digital as more of a friend than a threat. Business (advertising) was booming, profit margins were at 30 percent or more, and some newspapers were over 200 pages a day and 500 pages on Sunday. Papers opened separate digital divisions because they saw the internet as a supplement rather than a replacement to the paper editions.

The newspapers were so successful that they provided internet news for free, even without subscribing to the paper. Within a few years the real threat of digital became clear: why pay for news when Google and lots of websites provided it for free?

After some experimentation and a few missteps, all four of America’s leading newspapers are now behind pay walls. Some allow readers access to as many as 20 stories each month before they have to pay, and some open their access to everyone on days of critically important news (Presidential elections, for example). Digital subscriptions are booming, and The New York Times and the Wall Street Journal sell more digital than print subscriptions.

Although the fear at first was that papers would trade print advertising dollars for digital pennies (or dimes), the revenue is finally substantial and goes a long way to funding the paper.


At the Center, we have seen for 18 years that interest in news and information is greater than it has ever been; however, that interest does not easily translate into reading newspapers. Sadly, we see that every time a print newspaper reader dies, he or she is not replaced by a new reader. The ultimate outcome is clear and inevitable.


The other and more interesting development — and the one that will sustain our best newspapers for generations or more — is what I call “The Charles Foster Kane Model of Newspaper Ownership.”

In Citizen Kane, Orson Welles’ brilliant, groundbreaking, 1941 film in which he starred and directed, central figure Charles Foster Kane, in a thinly veiled portrait of William Randolph Hearst, takes over the New York Inquirer (a fictional newspaper) because, Kane says, “I think it would be fun to run a newspaper.”

Today, across America, a number of massively rich billionaires are buying trophy newspapers in some of our biggest cities. It is not always clear whether they are buying them out of civic commitment or personal ego. But it doesn’t matter if they respect the long tradition that the publisher (owner) gets to write the editorials and the news division has editorial freedom.

Let’s look at some recent examples.

Bezos buys the Washington Post

Jeff Bezos, founder of Amazon, bought the Washington Post in 2013. It is important to note that Bezos personally rather than Amazon bought the paper. He paid $250 million when his net worth was $25 billion. Today his net worth is $140 billion.

The day Bezos gained control of the Post, some of my friends and former students who work there called me (and probably everyone else they knew) hungry for the answer: what does this mean?

Bezos, the master of creating businesses and making money, did not, I believe, buy the Post as an investment. He didn’t bother to do due diligence on the purchase. He is close to Donald Graham, the last publisher and the son of Katherine Graham, the legendary publisher during the Pentagon Papers and Watergate days. From Graham, Bezos knew the paper was in trouble and was probably a few years from closing or being sold to anyone who was willing to buy it at a fire sale. Bezos bought it to save the paper.

I told the reporters I knew, “He doesn’t care if it makes 50 million dollars a year or loses 50 million dollars a year. But if it loses 50 million, he’ll have to close it in 1,000 years!” I thought the geek in Bezos would see if he could turn the paper around, but that was not part of his motivation in buying. I also believe he understood that the Post reporters would cover Amazon more aggressively to prove there was no bias and that he wouldn’t even care about writing the editorials (he hasn’t).

Bezos buying the Post did far more than save it. He pumped money into it, hired a larger staff (the only major newspaper to expand its staff in the last 10 years), built a new headquarters, and restored the morale employees hadn’t felt in years. It is a better paper than it has ever been, and it is winning Pulitzer Prizes and succeeding by any measure.

Bezos has also paid an additional price for the paper. In March of 2018, President Trump attacked Amazon for not paying its fair share of taxes (hardly the right person to make that charge), for cheating the U.S. Postal Service, and for destroying American retail. Almost no one was fooled that the real target of Trump’s ire was not Amazon but the Washington Post for its coverage of the Trump administration.

Bezos hasn’t reacted at all.

Murdoch, Fox News, and the Wall Street Journal

The Wall Street Journal was owned for generations by the Bancroft family. It was said they would never sell the paper, and for a long time that looked to be true. The problem with family ownership is that by the third generation the family is so large and the wealth has been spread so thin (see the Los Angeles Times below) that liquidating a declining asset becomes appealing.

Rupert Murdoch, while a television and film mogul, is at his core a newspaperman. I once asked him, “Isn’t your favorite thing in the world waking up, reading your newspapers and then calling your editors and screaming at them?” He smiled and agreed.

Murdoch always wanted the Wall Street Journal. It was America’s national newspaper. He overpaid ($5.6 billion) because he really wanted it and to make sure no one else got it. (See Steve Ballmer and the L.A. Clippers.) Shortly thereafter, he wrote down about half the value, but he was not upset because it was a unique asset in his collection.

Murdoch understood that to turn the paper into a print version of Fox News would destroy its value. His team does write the editorials, and they are very conservative, but there are no discernible fingerprints on the news content from Murdoch’s ownership. When investors were pressuring him to sell his newspapers, he refused, put the newspapers into a separate company (News Corporation), and filled it with valuable assets to protect it.

The Journal is a vibrant asset as long as Murdoch is on the scene. It would be great to see him take some of the $70 billion or more he will gain from the sale of Fox to Disney and create an endowment to protect the paper after he is gone.

Soon-Shiong buys the Los Angeles Times

Some may scoff at including the Los Angeles Times among America’s top newspapers. No major newspaper has suffered more over the past 25 years than the Times. In the 1980s and 1990s, it was arguably among the two best papers in the country, and by far the most financially successful one.

Owned for most of its history by the conservative Chandler Family, the Times really prospered beginning in the 1960s as a liberal newspaper under the leadership of Otis Chandler. Many of Otis’ fellow Chandlers stopped speaking to him because of the direction the Times began moving. It’s not that Times was so liberal; it’s that it moved so far from its archconservative positions of the 1950s. Many historians credit the old, conservative Los Angeles Times with the rise of Richard Nixon.

The Chandler Trust that controlled the newspaper was always thought to be inviolable despite some members of the family wanting to break it in order to free up their inheritance.

Otis was the last Chandler to be publisher of the paper. The next few who followed him were equally committed to great journalism. Eventually the control of the paper and the parent company (Times-Mirror) fell to businessmen. They did not see journalism as a public trust and a service to the community.

The paper was sold to the Tribune Company that owned the Chicago Tribune. Things declined rapidly. The Tribune never forgave the Los Angeles Times for being a better paper than their flagship Chicago Tribune. Whereas in the past, publishers and editors stayed for a generation, both jobs entered a period of musical chairs, with some staying less than a year. One of their best editors left to teach journalism (Michael Parks) and another became the executive editor of The New York Times (Dean Baquet).

Staff reductions were constant, as was the closing of bureaus. The Times had become a shell of its former self, and the print edition looked emaciated. The Tribune Company, never a loyal or interested owner, spun off the papers from its television division and created a new company with one of the most frightening names in corporate history: Tronc. They filled the company with debt. The future was bleak.

Last month, just as the Times was getting ready to close its vaunted Washington Bureau, a Los Angeles biotech billionaire, Dr. Patrick Soon-Shiong, bought the paper for $500 million. He also acquired the San Diego Union-Tribune, and a few smaller papers.

Soon-Shiong is much less known, even in Southern California, than Bezos or Murdoch. Reporters asked the same questions of Soon-Shiong that those at the Post asked about Bezos: what does this mean?

What is clear is that without Soon-Shiong, the paper would have quickly sunk into oblivion. He saved the Los Angeles Times.

Are Soon-Shiong’s motives vanity or a noble effort to preserve great journalism in the second biggest city in America? Will he write the editorials and leave the rest of the paper in the hands of the journalists?

His first move after acquiring control is reassuring: He brought in highly-respected, veteran journalist Norman Pearlstine to be the executive editor of the paper. Pearlstine has had a brilliant career at Time Magazine, the Wall Street Journal, and Bloomberg. He has watched quality news organizations wither away and knows what it will take to save the paper and make it great again.

With that question answered, the next becomes what is the succession for the paper under the 65-year-old Soon-Shiong? That has yet to be worked out, but, for now, the Times may be on its way back.

The New York Times and the Sulzberger Family

The New York Times is the only one of the four newspapers still under long-term family control: the Sulzbergers. The Grahams, Bancrofts, and Chandlers are out of the newspapers business.

The Sulzberger family wealth has also been spread thin, but they are determined to keep the paper in their hands. At the end of 2017, longtime publisher Arthur Sulzberger, Jr. (son of the publisher) was replaced by his 37-year-old son, Arthur Greg (A.G.) Sulzberger.

Instead of selling, they will continue to invest in and improve the paper.

The election of Donald Trump has been very good for the business of The New York Times (and for that of many other newspapers, as well as for Stephen Colbert, Seth Meyers, and others). If the Sulzbergers cannot succeed, there are New York billionaires who might eagerly jump in (Michael Bloomberg?).

Although Charles Foster Kane did not respect the line between editorials and independent journalism, and used the paper to further his own business and political goals, the model Orson Welles created in his classic movie has become the best hope for the survival of great journalism.



Jeffrey Cole is the founder and director of The Center for the Digital Future at USC Annenberg.



See all columns from the Center.

July 2, 2018