Over the past few days, the two grandest families of American media have redefined the status of the storied big-city newspaper.
By selling The Boston Globe and The Washington Post?—?to billionaires for notional prices in what are essentially non-commercial transactions?—?the Sulzbergers and the Grahams have effectively brought down the curtain on the era of the celebrated big-city masthead as a business. The Globe and the Post are now, officially, philanthropic assets.
And if the Washington Post and Boston Globe can now be designated as charities, are the circumstances of The Sydney Morning Herald or The Age any different?
Actually, their circumstances are much worse. Not only are the Herald and Age print editions haemorrhaging advertising revenue and losing money on most days of the week, they do not have the protective layer of family ownership that, until last week, provided a cushion against the forces of financial reality in Boston and Washington. Not even the Graham family’s passionate custodianship of the Washington Post was enough to preserve it as a commercially and editorially viable entity. As its current publisher Katherine Weymouth (a Graham family member) said yesterday:
“There are no easy answers in this business, and if there were everyone would have figured them out by now.”
The “reclassification” of important newspapers from being businesses to charitable trophy assets is now a fast-rolling phenomenon. The Los Angeles Times and Chicago Tribune are in the final stages of a sales process that is likely to land them in the hands of billionaires with political agendas. In Britain, the London Evening Standard and The Independent are owned by a Russian oligarch and The Guardian and The Observer are the core assets of a charitable trust. Meanwhile Rupert Murdoch’s most influential mastheads?—?The Australian, The Times and The New York Post?—?are effectively philanthropic assets, losing around $200 million annually and subsidised by News Corp.
The inevitability of this pattern places the SMH and The Age in a precarious position. Run by a board bereft of industry experience, owned by institutional investors whose only motive is financial, operating a strategy based exclusively on cost-cutting, these two newspapers are prime material to be reconstituted as philanthropic assets (which, in harsh reality, is what they have already become).
The problem is, Australia has very few billionaires?—?and maybe only one, Gina Rinehart, with the appetite to use her wealth to bankroll editorial institutions for non-commercial motives.
When the proud family owners of a paper like The Washington Post give up, you begin to understand that certain kinds of big newspapers are unlikely to survive as businesses, no matter how much spin is attached to their trajectory.
This piece was first published on Crikey. Eric Beecher is the chairman of Private Media, the owner of LeadingCompany.