Even the most public-spirited wealthy media owners are not perfect. Jeff Bezos has revived The Washington Post, but working conditions — though not as bad as those in, say, an Amazon warehouse — are hardly as good as they could be at a news organization that is reportedly growing and profitable. John Henry, frustrated by ongoing losses at The Boston Globe, has hired a union-busting law firm in an attempt to bring costs into line — as if that’s going to make for a better, more financially sustainable Globe.
But you’d have to go a long, long way to find an owner as awful as Philip Anschutz, who last week killed The Weekly Standard, reportedly so that he could raid its subscriber list and use it to pump up his Washington Examiner.
The Standard, a political magazine founded in the mid-1990s, has been a leading voice of #NeverTrump conservatism. The Examiner is considerably more pro-Trump. Anschutz is entitled to go full #MAGA, of course. But according to John Podhoretz, one of the Standard’s co-founders, Anschutz actually stood in the way of a possible sale because he wanted the Standard dead and gone lest it compete with the Examiner. Podhoretz writes:
That this is an entirely hostile act is proved by the fact that he and Anschutz have refused to sell the Standard because they want to claim its circulation for another property of theirs. This is without precedent in my experience in publishing, and I’ve been a family observer of and active participant in the magazine business for half a century.
Podhoretz was understandably so filled with rage that he either forgot or refused to name who “he” is. But I assume he’s referring to Anschutz henchman Ryan McKibben, who pulled the trigger last Friday.
As I argued on “Beat the Press” on Friday (above), political magazines like the Standard, National Review, The New Republic and The Nation have never made money. Rather, they have depended on wealthy owners to subsidize them. The losses are relatively small because the magazines themselves are shoestring operations.
The Standard didn’t die because it was losing money — it was supposed to lose money. Instead, as Podhoretz writes, it was murdered.
Stat, one of Boston Globe owner John Henry’s other media properties, is making a big move. Editor Rick Berke announced today that the health-and-life-sciences news organization is hiring Matthew Herper, a veteran Forbes reporter whom Berke describes as “sensational,” not to mention “supremely talented, versatile and deeply sourced.”
I sometimes describe Henry’s five years of ownership as throwing stuff against the wall to see what will stick. Some ideas, like Crux, launched to cover the Catholic Church, slid onto the floor, though it continues to do well under different ownership. Stat is one of the ideas that has stuck. The project was launched in 2015 with nearly 40 full-time journalists. It’s a bit smaller today (Berke puts the number at around 30), but it appears to be doing reasonably well.
During the past couple of years the emphasis at Stat has been on paid content, a $300-a-year subscription-based model known as Stat Plus. Revenue, Berke told me in an email, is 20 percent ahead of projections. “We’re not breaking even but closer and closer to profitability,” he said. According to Angus Macaulay, Stat’s chief revenue officer, the site is aiming for 10,000 paid subscribers by the end of 2019, and “we’re ahead of that timeline.”
Like Stat, the Globe itself is smaller than it was when Henry first bought it. But Henry continues to invest, if not necessarily on the scale of giving $68 million to Nathan Eovaldi so that he’ll stay with the Red Sox, one of Henry’s other holdings. The Globe is currently restocking its Washington bureau after losing several top people to The Washington Post and The New York Times, Michael Calderone recently reported in Politico. That’s not necessarily where I’d put my money (if I had money). But Globe editor Brian McGrory said at a conference last year that national politics drives readership and paid subscriptions.
In the early days of Stat, there was a lot of coverage aimed at a general audience — and, in fact, stories from Stat still migrate to the Globe on a fairly regular basis. But the paid Stat Plus model means that the site is increasingly targeting health-care professionals. The Herper move sounds like a smart way to appeal to that audience.
The full text of Berke’s message to his staff follows.
I could not be more excited to announce that we have a sensational new colleague: Matthew Herper.
Many of you are familiar with Matt’s work. Over the past 18 years at Forbes, he has distinguished himself as a supremely talented, versatile and deeply sourced reporter with a loyal readership across the health care and science communities. His first cover (with Bob Langreth) was “How the Drug Industry Abandoned Science for Salesmanship.” He went on to write 16 more covers, ranging from a deep look at breakthrough cancer immunotherapies to an early assessment of the potential impact of Bill Gates on vaccine development. This past summer, in one of his most moving recent projects, Matt gave readers an intimate window into the life of Michael Becker, a biotech executive facing end-stage cancer.
Matt also holds the journalistic distinction of having interviewed Elizabeth Holmes and Martin Shkreli on stage the very same day. (That was in their halcyon year.)
For our team of journalistic powerhouses, there is no better recruit. Matt’s interest in revelatory and compelling stories is naturally suited to STAT. He sees himself as writing and reporting from the perspective of a bench scientist, focusing on the researchers who create or study tomorrow’s medicines. He also has a knack for getting some of the most influential names in the life sciences industry to talk with him.
Beyond Matt’s journalistic heft, I see his joining us as a critical step in further ensuring our business success. Presumptuous as it may be, our objective is very clear: to corner the market on smart, must-read journalists writing about health, medicine, and science.
STAT Plus is already growing beyond our projections, and we’re confident that Matt will help us accelerate the expansion of our core business of paying subscribers and sponsors. In addition, Matt will be our point person on the editorial staff as we build out our events business.
Matt’s title will be Senior Writer, Medicine. Like Ed and Damian, he’ll be based in New York. But he has family in the region, and we’ll encourage him to work from HQ as much as he’d like.
Lastly: Matt’s interest in joining us is a testament to our groundbreaking journalism and the business that we have built. One of our biggest draws, he said, is that he’ll get to work with reporters whose work he has admired for years.
“For years, I’ve been saying this is biology’s century,” Matt told me. “Nobody has been covering that giant story better than STAT. I can’t wait to join this amazing team and see what we can do together.”
For local and regional news organizations, nothing is more expensive — or more important — than investigative journalism aimed at holding government and other large institutions to account. Despite the economic challenges that continue to shrink the newspaper business, The Boston Globe continues to provide a steady stream of such stories. And over the past few days, the paper demonstrated the results of two innovative ways to fund such reporting.
First, on Saturday, the Globe published a major update on how Catholic bishops have failed in their response to the sexual-abuse crisis. The story, which appeared in print on Sunday, was reported and written by a team of journalists from the Globe and The Philadelphia Inquirer, with funding from the Lenfest Institute for Journalism. The institute, a nonprofit organization, owns the Inquirer and two sister media properties, the result of a gift from the late Gerry Lenfest in 2016. (I wrote about Lenfest’s legacy for the Globe after his death in August.) Here is how the Globe describes the partnership:
Boston and Philadelphia have been ground zero for the Catholic clergy sex abuse scandal — both cities have endured years of church investigations, allegations, prosecutions, and lasting scars. Now, amid a rising tide of revelations about misconduct by US bishops, the Inquirer and Globe pooled their resources for a deeper look at the crisis. Reporters from the two newsrooms visited nine states, conducted scores of interviews, and reviewed thousands of pages of court and church records to produce this report. Funding for the effort came from the Lenfest Institute for Journalism.
Then, today, the Globe published a story by Jana Winter on attempts by hackers to penetrate voting systems across the United States. Fortunately, her reporting shows that officials are well aware of those attempts and that they appear to be on top of it. Equally interesting, though, is that Winter is the Globe’s Spotlight Fellow — a program funded by Participant Media, which produced the movie “Spotlight.” The fellowship, according to the online description, provides “awards up to $100,000 for one or more individuals or teams of journalists to work on in-depth research and reporting projects.”
As if to underscore the need for alternative funding for accountability journalism, the Globe unveiled a shrunken business section on Sunday, moving innovation columnist Scott Kirsner to Monday.
Quick note about my weekly @bostonglobe column, “Innovation Economy”: after more than a decade of running on Sunday, it’s moving (back) to Monday. Not my decision but I’m psyched to keep it going. It originally launched in Feb 2000 on Mondays.
Kirsner’s column was usually the main event in the Sunday business section. Given that it will continue, this isn’t too much of a loss. But it does show that the Globe’s finances remain precarious, as publisher John Henry admitted when I interviewed him during the summer for WGBH News:
The Globe cannot ever seem to meet budgets — on either the revenue side or the expense side and I am not going to continue that. This has always been about sustainability rather than sizable, endless, annual losses. That is frustrating and due to a combination of mismanagement and a tough industry.
In such an economic environment, it’s essential that the Globe find new ways to pay for what really matters.
The choice of Shirley Leung to run The Boston Globe’s editorial pages on an interim basis is an interesting one. The paper’s top two editors — the editorial-page editor and the editor of everything else — have traditionally held fairly low-profile positions before their appointment, at least in terms of their public profile. But Leung, a business columnist (and former business editor), is one of the Globe’s most high-profile personalities.
In that respect, the choice of Leung resembles the elevation of Brian McGrory to the top of the masthead in 2012. Unlike his predecessors, McGrory wrote a widely read metro column. At a time when newspapers can hardly afford to give up features that draw readers, that was a significant loss. Likewise, Leung’s column will be missed unless the Globe is able to find a suitable replacement. We can all hope that Leung finds the time to write under her own byline at least occasionally, but that’s going to be tough.
As a columnist, Leung is a provocateur who seems to enjoy taking controversial stands — most notably, advocating for the Olympics to come to town. There’s nothing wrong with an editorial-page editor who likes to think counterintuitively. But she’s now going to have to express her opinions as part of a team that includes the editorial board as well as owners John and Linda Henry.
Leung’s predecessor, Ellen Clegg, who retired last week, served a long time as the interim before finally being named to the job. Clegg led the pages through some significant accomplishments: a redesign of the print section that allowed her to cut the number of unsigned editorials from the traditional three per day to (usually) one; innovative editorial projects on gun violence and other topics; new voices such as Michael Cohen, Renée Graham, Niall Ferguson and Richard North Patterson; and an uptick in web-only content. Leung has large shoes to fill, but my guess is that she’s being groomed as the permanent replacement once her six-month interim stint is up. (Disclosure.)
It’s also interesting that Leung’s appointment comes just after deputy editorial-page editor Marjorie Pritchard led a nationwide campaign to persuade newspapers to editorialize against President Trump’s anti-press rhetoric. Ultimately more than 400 papers signed on. Which means that Leung will be even more closely watched than might have otherwise been the case.
Best wishes to Shirley. The full text of the Globe’s press release is below.
SHIRLEY LEUNG NAMED INTERIM EDITORIAL PAGE EDITOR
August 20, 2018, The Boston Globe Boston, MA – The Boston Globe announced today that starting August 27th, Shirley Leung will assume leadership for the Editorial Board for the next six months and will be named the interim Editorial Page Editor.
Leung has been a bold voice in Boston. For the past five years, she wrote an impactful, must-read, often counterintuitive column in The Globe’s business section. Prior to that, Leung served as The Globe’s business editor overseeing coverage of the Great Recession. Her experience brings a deep understanding of the business community and connection to the newsroom that will help lead transformation across the organization. Leung will be the fifth woman in The Globe’s 142-year history to hold this position, and the first person of color to do so.
In naming Leung, Linda Henry, The Globe’s Managing Director, said “We need the strength of a courageous thinker, someone who knows both the newsroom and the world of opinion well, and who knows how to challenge assumptions, and while I am reluctant to lose her column, I could not be more excited about this new role for her. “ Henry added, “I am proud of the board’s progress and bold initiatives, and look forward to the board becoming an even more vibrant voice serving our community locally and nationally. We want to make certain that we take our time to think strategically about the board, who the next permanent leader will be, and how it will be organized.”
Prior to the Globe, Leung spent six years at the Wall Street Journal. A graduate of Princeton University, Leung started her career at her hometown paper, The Baltimore Sun.
“The Globe’s editorial board last week spoke loudly and with purpose with its #FreePress initiative driving a national conversation on the role of journalism,“ said Leung. “I am proud and humbled to take on this new post and have my voice join theirs.”
A source sent this to me a little while ago. It’s a message from Vinay Mehra, the president and chief financial officer of Boston Globe Media. Not a lot of news here. For my money, the most interesting revelations are that Stat, the company’s health and life-sciences vertical, continues to grow, and that Design New England magazine has been discontinued. (Confession: I’m not sure I’ve ever seen an issue.)
For more on the Arc content-management system and the latest on the Globe’s digital subscriptions, see the email interview I did with publisher John Henry last week for WGBH News.
The full text of Mehra’s message follows.
Happy summer! As we go into the second half of the year, the Senior Leadership Team and I would like to share with you where things stand midpoint of this year. Here are some highlights:
The newsroom continues to hit it out of the park. The Spotlight Team was a finalist for the Pulitzer Prize for a series on race that spurred an unprecedented conversation in this region. Our recent TSA piece has made waves nationally. Day in, day out, there is uniquely compelling journalism on our site and print pages, including the launch of the latest reader advocacy initiative, the Help Desk.
We continue to invest in the future of the Globe. Our latest investment in our digital future is ARC, our new publishing platform that will result in the redesign of our Globe.com website, and the launch of an ioS and Android Boston Globe app in August. There has been great collaborative work across the company to get to this point, and I am grateful for everyone’s help.
We have been disciplined on reducing costs, from ensuring we establish a robust contract management process to more tightly managing expenses, and continue to push ourselves on creating new revenue opportunities and exploring new ways to meet readers where they are, leveraged by our entrepreneurial spirit.
While advertising sales continues to experience industry disruption, we are excited about the potential of BG BrandLabs and sponsored content — we have completed 21 customer campaigns since the beginning of the year and have 14 more in our pipeline. Leading companies across the region appreciate and seek out partnerships with us and we will continue to build on that momentum.
Subscription revenues are on budget with our digital subscriber base over 94,000, putting us #1 among U.S. major metros in terms of total digital subscription revenue. With Pete [Doucette]’s departure, I have made the decision to conduct a search for a new head of consumer revenues, and I am pleased with the initial results of the search and the caliber of candidates who are interested in the role.
After months of negotiation, we have an agreement with the Pressman, Mailers and the Drivers unions. We appreciated the partnership with the bargaining committees and these new contracts give us the flexibility we need to continue to meet the needs of the market and industry.
We made the difficult but necessary decision to discontinue publishing Design New England magazine in order to redirect resources into our growth. This was hard news for our colleagues affected by the change, but we were transparent with the decision making process and explored all options before coming to this decision.
STAT, our bold life sciences initiative, continues to see impressive growth – year over year growth in advertising by 59% and growth in subscribers by 308%.
The constant change we are experiencing is what it feels like to be in transformation, and frankly, it will continue. While it is no doubt challenging to navigate in a business as dynamic as ours, I can tell you that we are not alone in this challenge and I believe that our organization will be positioned for success. Since starting at the Globe, I have spent a lot of time out in the field speaking with CEOs in the greater Boston area, familiarizing myself with the unique perspectives within the region and forging relationships that will ultimately allow our organization to help tell the incredible stories of growth, disruption and innovation in our backyard. The good (and bad) news is that I hear the exact same set of challenges in all of these discussions. Everyone, in every industry, is experiencing the very real ups and downs of transformation. The key for us is to stay focused on why we do the work we do, because what I also hear in these conversations is that we, the Globe, are critical to this city.
Success will require that all of us — and particularly the Senior Leadership Team — work across boundaries as one Boston Globe and in harmony with our partners. In the coming month, the Senior Leadership Team and I will be engaging in a strategic planning process to determine our plans for long-term growth. Expect to hear more from us after some of that work is done.
Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that it’s not just work, but something that will inform and improve other people’s lives. This is the opportunity that drives each of us at this company.
Thank you for your ongoing support and hard work. I recognize we wouldn’t be where we are without the contributions made by each and every one of you.
Nearly five years after the billionaire financier announced that he would buy The Boston Globe, there’s a low but persistent buzz within the city’s media and political circles that Henry is tired of losing money and looking to get out. But Henry, who is also the principal owner of the Red Sox, insists there’s nothing to it.
“I don’t think of selling any local assets during my lifetime,” Henry said in an email interview. “Linda and I love and are committed to this city.”
Henry holds the title of Globe publisher. His wife, Linda Pizzuti Henry, is the managing director and, even more than her husband, is a regular presence at the Globe’s offices.
Henry responded to a range of questions I recently emailed to him. He declined to offer answers on two issues: whether he thought columnist Kevin Cullen could regain the trust of his readers after he returns from a three-month suspension for ethics violations; and how he plans to handle former Boston.com editor and reporter Hilary Sargent’s claims that she was sexually harassed by Globe editor Brian McGrory — claims that she has continued to assert even after the Globe’s recent announcement that investigators had interviewed Sargent and cleared McGrory. Henry did offer praise for McGrory’s performance as editor, saying, “Brian has done a terrific job of early on moving us primarily into local reporting and over the past year or so has really moved us to more and more relevant, interesting and compelling stories across New England. Every day there are ‘can’t miss’ stories.”
As is the case with many daily newspapers, the Globe has staked its future on its ability to sell digital subscriptions. The Globe missed its target of signing up 100,000 digital-only subscribers by the end of June — a crucial benchmark on the way to 200,000, which McGrory and other Globe executives have identified as one of the keys to long-term financial sustainability. Those efforts are about to get a significant boost. Earlier this year, it was announced that the paper would adopt The Washington Post’s highly regarded content-management system, Arc, both for internal operations and for re-energizing the Globe’s web and mobile platforms.
Globe spokeswoman Jane Bowman said the rollout would begin in August, with updates throughout the fall and full adoption by the end of the year. “The move to Arc will relaunch globe.com with a focus on site speed and driving user engagement,” Bowman said via email. “We will extend our mobile offerings, with Arc powering new iOS and Android apps for digital subscribers. The newsroom will have access to Arc’s advanced testing and analytics tools, giving us deeper insight into how readers engage with our content.”
Henry also had some provocative things to say about objectivity, telling me, “A news journalist (as opposed to a columnist) has an obligation to sift through whatever evidence he or she can find and give the reader what actually has happened or is happening to the best of his or her ability much like a juror in a courtroom is asked to do. Today we get the news interpreted far too often rather than reported.”
The financier-turned-publisher’s efforts to reinvent the Globe as a business have been mixed. Expanded print sections, for the most part, have not worked out, as advertising to support those sections failed to materialize. Crux, a free website devoted to covering the Catholic Church, was given away to its star columnist, John Allen. A new $75 million printing plant in Taunton got off to a slow start, resulting in poor quality, late and missed deliveries, and the loss of client publications such as the Boston Herald and USA Today. A revamped version of Boston.com, stripped of Globe content, never really achieved liftoff.
On the other hand, the standalone website Stat, which covers health and life sciences, keeps chugging along. The newsroom and business operations were moved from the paper’s hulking, outmoded plant in Dorchester (sold for about $80 million) to downtown Boston. The Globe’s journalism remains excellent, and the newsroom, with about 220 full-timers, is far larger than it would have been if the paper had fallen into the hands of a corporate chain — as we saw this week with New York’s Daily News, whose staff was cut in half by tronc, its bizarrely named owner.
According to The Washington Post, the Daily News had as many as 400 full-time editorial employees in the late 1980s. After this week’s cuts, that number is now about 45 — an indication not only of how fortunate the Globe has been to have Henry at the helm, but of how bad it might get if he can’t turn things around.
A transcript of my email conversation with Henry follows.
Q: From time to time people tell me that you are considering selling the Globe. Lately that kind of talk has been more persistent — I’ve heard people say that you’re tired of losing money and perhaps tired of the recent controversies. So: Are you planning to sell the Globe?
A: We have had no discussions about selling nor is anything contemplated. I don’t think of selling any local assets during my lifetime. Linda and I love and are committed to this city.
The Globe cannot ever seem to meet budgets — on either the revenue side or the expense side and I am not going to continue that. This has always been about sustainability rather than sizable, endless, annual losses. That is frustrating and due to a combination of mismanagement and a tough industry.
Q: If you are not planning to sell the Globe, are you committed to keeping it for the foreseeable future, which I’ll define as the next three to five years?
A: There is no time frame, honestly. We want to do our part and will, but ultimately the community’s support and the excellence of the paper will determine the long-term future.
I believe this community will support a news organization of this caliber. Brian has done a terrific job of early on moving us primarily into local reporting and over the past year or so has really moved us to more and more relevant, interesting and compelling stories across New England. Every day there are “can’t miss” stories.
Journalism is under attack in this country. We all know facts are under attack. Facts. What should be under attack in journalism these days are not facts but the lack of objective reporting. Personally I reject the notion that you can’t have highly objective reporting although the media seems to believe it isn’t possible. To me that is a long-held myth that has no place in a democracy. A news journalist (as opposed to a columnist) has an obligation to sift through whatever evidence he or she can find and give the reader what actually has happened or is happening to the best of his or her ability much like a juror in a courtroom is asked to do. Today we get the news interpreted far too often rather than reported.
Q: When I was doing my reporting for my book “The Return of the Moguls,” you and others told me that the Globe’s revenues were about $300 million a year. Could you tell me what they are today? What is the gap between revenues and expenses — in other words, how much are you losing?
A: The annual losses are just not sustainable but even if I personally felt that it was acceptable to continue losing significant sums, it does not put the news organization on the road to sustainability. Sooner or later it must sustain itself and it will — again though it will require the Globe convincing the community that it is worthwhile to support.
Q: Do you have concrete plans to fill the gap and move to break-even? You’ve had some success in charging for digital subscriptions, but what can you point to beyond that? How many digital-only subscribers do you now have — did you meet the 100,000 target that had been announced for the end of June?
A: Bridging the gap will not be easy but we have been working on it all year. Last week [early July] we were at 94,797 digital-only subscribers. While the numbers continue to grow, advertising revenues across the country are being gobbled up by Google and Facebook. Bloomberg today reported, “Omnicom Group suffered its biggest decline in nine years after posting sluggish results, renewing concerns that the ad giant can weather media disruption spurred by the likes of Google and Facebook.”
Q: Do you believe the Taunton printing problems have been straightened out or are at least under control? Contracted work was supposed to be a big part of your strategy, but you have lost customers, including the Boston Herald and USA Today. Do you have a strategy to sign up new customers or to lure back old ones (or both)?
A: Yes, and everyone there has been doing everything they can to reduce costs while at the same time getting used to new equipment that initially was extremely challenging.
Whether or not we print other publications comes down to cost primarily. Our cost structure was such that the Herald could be printed more cheaply out of the area. Our costs also led to minimal profit from printing other papers. If we can get our costs in line and be efficient enough we will have almost certainly have more commercial clients than The New York Times.
Q: When will you name a successor to editorial-page editor Ellen Clegg, who recently announced her retirement? [Clegg and I plan to work on a project together. See this disclosure.] Have you chosen anyone? Can you say who that is?
A: This is an extremely important position so we will take our time. Ellen has done a superb job for us and we will miss her.
Q: What do you expect the Globe’s adoption of The Washington Post’s Arc platform is going to accomplish for you? When will that be implemented?
A: I’m not the best person to talk with about this, but it is exciting. Our number one issue is reader experience and having an app experience across platforms as well as a new site will be great for readers.
Don Seiffert of the Boston Business Journal reports that Boston Globe editorial-page editor Ellen Clegg has announced her retirement, and he notes that sports editor Joe Sullivan recently said he would retire as well.
I suspect the sports section will be just fine. Clegg’s shoes, on the other hand, may prove to be difficult to fill. A longtime Globe employee, Clegg followed Peter Canellos, an exceptionally thoughtful editor who took a top job at Politico after leaving the Globe several years ago. Clegg proved to be an innovator both online and in print. More important, she has a close working relationship with owners John and Linda Henry, which has really mattered given the Henrys’ ongoing interest in the editorial pages. You’ll find a synopsis of those innovations in an interview I did with Clegg for the Nieman Journalism Lab earlier this year.
And now for some personal news. For the past several months Clegg and I have been talking about working together on a project, probably a textbook about opinion journalism. I’ve known for a while that she was retiring — the project is not something I could take on if she’d stayed at the Globe given the conflict of interest with my work at “Beat the Press” and WGBH News. So I’m glad Clegg’s departure is finally out in the open.
Although we’ve sketched out a few ideas, we are a long way from producing anything. She’s not leaving the Globe until mid-August. I just wanted to let you know that Ellen and I will be working together before you heard it from anyone else.
Please join us either in person or via Facebook Live Tuesday May 15 at 4:30 p.m., when Kennedy will be interviewed by Beat the Press Host Emily Rooney at the WGBH studio at the Boston Public Library.
Rumors that The Boston Globe might be for sale began circulating as far back as 2006, when a group headed by retired General Electric chief executive Jack Welch, who was a Boston-area native, and local advertising executive Jack Connors was reported to be nosing around. At the time, the Globe was said to be valued at somewhere between $550 million and $600 million, vastly more than the price John Henry paid seven years later. But the New York Times Co. wasn’t selling — at least not yet.
Politico media columnist Jack Shafer has written, if you can believe it, a semi-defense of the hedge fund Alden Global Capital and its principal, Randall Smith, who are in the midst of running their newspapers into the ground. Alden owns the Digital First Media chain, whose Denver Post is the locus of an insurrection against hedge-fund ownership. The 100-paper chain also owns three Massachusetts properties: the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg.
Shafer’s argument is a simple one: the end is at hand for the newspaper business, no one has figured out how to reverse its shrinking fortunes, and so therefore Smith can’t be blamed for squeezing out the last few drops of profit before the industry collapses. “Smith may be a rapacious fellow,” Shafer writes, “but his primary crime is recognizing that print is approaching its expiration date and is acting on the fact that more value can be extracted by sucking the marrow than by investing deeper or selling.”
Now, it’s possible that Shafer is right. But I’m considerably more optimistic about the future of newspapers than he is. Let me offer a few countervailing examples.
1. I certainly don’t want to sound naive about GateHouse Media, a chain of several hundred papers controlled by yet another hedge fund, Fortress Investment Group. GateHouse, which dominates Eastern Massachusetts, runs its papers on the cheap, too, and I’ve got a lot of problems with its barebones coverage of the communities it serves.
But GateHouse, unlike Digital First, is committed to newspapers. That’s why both insiders and outsiders were hoping GateHouse would buy the Herald. I genuinely think the folks at GateHouse are trying to crack the code on how to do community journalism at a profit for some years to come — and yes, its journalists are underpaid, and yes, I don’t like the fact that some editing operations have been centralized in Austin, Texas. But it could be worse, as Digital First demonstrates. For some insight into the GateHouse strategy, see this NPR story.
2. Smaller independently owned daily papers without debt can do well. The Berkshire Eagle is in the midst of a revival following its sale by Digital First to local business interests several years ago. In Maine, a printer named Reade Brower has built an in-state chain centered around the Portland Press Herald that by all accounts is doing well.
3. Large regional papers like The Denver Post are the most endangered. Transforming The Washington Post into a profitable national news organization, as Jeff Bezos has done, was a piece of cake compared to saving metros. As I describe in “The Return of the Moguls,” billionaire owner John Henry of The Boston Globe is pursuing a strategy that could result in a return to profitability: charging as much as the market will bear for print delivery (now up to more than $1,000 a year) and digital subscriptions ($30 a month). Globe executives say the paper is on track to pass the 100,000 mark for digital subscriptions in the first half of this year, and that the business model will start to look sustainable if it can reach 200,000.
In other words, reinventing the newspaper business is not a hopeless task. Randall Smith and Alden Global Capital have taken the easy, cynical route — but not the only route. There are better ways.
Last week a years-long ownership crisis at the Los Angeles Times may have come to an end. Patrick Soon-Shiong, a billionaire surgeon and entrepreneur, purchased the Times from tronc for a reported $500 million.
Drawing on the lessons I write about in my new book, “The Return of the Moguls,” I e-talked with Dave Beard about what lessons Soon-Shiong could learn from Jeff Bezos’ vision for The Washington Post, and why other billionaire owners both good (John Henry of The Boston Globe) and bad (Sam Zell, who ran the former Tribune newspapers into the ground) have had a rougher go of it.