Great Newspapers and the Problem of Underspending Billionaires

Behind the incomplete transformations of the Washington Post and LA Times

Welcome to Second Rough Draft, a newsletter about journalism in our time, how it (often its business) is evolving, and the challenges it faces.

When newspapers began failing as businesses, a number of them were bought by billionaires. That provided a lifeline, but, it was pretty widely said, also a risk: What if the billionaires tired of the money they were losing, and abandoned the field? As things are turning out, the risk seems a somewhat different one, and I want to look at it this week.

The problems at the Washington Post under Jeff Bezos and the Los Angeles Times under Patrick Soon-Shiong seem to me to have an important common element: owners who have made significant investments, but have now apparently drawn a line short of what’s necessary for their publications to thrive with readers.

The situations at the Post—still a great paper—and the Times – still seeking a return to greatness—are not the same. But both have serious issues.

Losing the newsroom— and readers— at the Post

The Post’s publisher announced his departure recently, having largely lost the respect of the newsroom, and the personal grant by Bezos to the publisher’s new nonprofit, with its mission to restore civility, looks to a lot of people like a severance payment by another name.

Meanwhile, many of the Post’s best reporters and editors have also left recently (editor Cameron Barr, reporters Hannah Dreier, David Fahrenthold, Stephanie McCrummen and Eli Saslow, and technologist Shailesh Prakesh to name just six), and the position of Sally Buzbee atop the newsroom seems precarious. Other than being Avis to the Hertz or Pepsi to the Coke of the New York Times, the Post’s strategy is unclear.

There’s lots of subjectivity and speculation in that summary. There’s none of either in this: digital subscriptions to the Post have fallen by one sixth recently while those at other leading national papers have continued to rise, and advertising in the Post has, not surprisingly given the loss of readers, also fallen, about 15% just this year.

Losing patience at the Times

At the Los Angeles Times, while some progress is being made under new editor Kevin Merida, labor strife is considerable, and the paper just announced the layoff of one eighth of the newsroom. The most recent public number of digital subscriptions to the Times is about one fifth of the shrunken number at the Post, and the paper reports that growth has “stalled.” Advertising is falling. It’s never been clear just how much money Soon-Shiong could devote to the Times. It is now clear that Merida has gotten all the resources he’s going to get to continue and extend the Times’ resurgence—and some of us don’t think he’s been given enough for the task.

And that’s the point.

Many billionaire businessmen, having made great fortunes, are inclined to think that the problems of the press will admit of business solutions. So, they are prepared to invest, but expect an eventual return in the form of a healthy company, even if not a financial yield on that investment. Eager business managers of the papers they have bought are inclined to assure them that prosperity—or at least healthy stability—is just around the corner. When the promised land is not reached on the promised timetable, there can be a temptation to try again within the resources previously said to be sufficient rather than to question whether more might have been needed all along.

an ad campaign, not a business strategy

A counter-example at the Globe

It doesn’t have to be this way with billionaire owners. The Boston Globe may provide a counter-example. The Globe is much improved under the ownership of John Henry, and particularly the management of his wife Linda Henry, its CEO. The Globe has about half as many digital subscribers at the Los Angeles Times, even though the Boston metro area is only a third the size of LA.

The Henrys have not only invested, they have innovated. Most notably, they have been relatively nimble. They had a concept of vertical publications launched off the Globe’s and Boston’s areas of focus in health (Stat) and the Catholic Church (Crux) as well as one in racial justice (The Emancipator). But they also had the discipline to listen to reader and market reactions and to double down on Stat and spin off both Crux and The Emancipator. They have remained focused on Boston, where they own the Red Sox and most of the team’s local television network, while declining to come to the rescue of the newspapers in Maine— an important contrast with Soon-Shiong’s also acquiring the San Diego paper.

Owning a newspaper in the third decade of this century is a big challenge, and a huge civic contribution if you get it right. We have all been better off because of Jeff Bezos’s purchase of the Washington Post, Patrick Soon-Shiong’s of the LA Times and John Henry’s of the Boston Globe. But saving these papers from the clutches of predatory hedge funds, while necessary, isn’t sufficient to maintain them as vibrant, viable sources of essential news, information and opinion. Readers will be the ultimate judge of whether the billionaire publishers are succeeding. It’s imperative for these publishers to hear what their readers are telling them.

Correction: This post originally said that the Boston Globe shut down Crux, when it actually spun it off. Sorry for the error, and apologies to the folks at Crux.