Irrespective of the fate of News Corp. and its chairman and CEO Rupert Murdoch, those who can barely contain their delight at this man’s current troubles might want to check their enthusiasm.
Mr. Murdoch, whatever his sins, is a newspaper mogul. There aren’t many of those folks around. Without such benefactors, good luck keeping a newspaper in business.
Tweet all you want, but real news still comes largely from newspapers and the media they’ve spawned: radio, television, news services and, of course, the Internet. Without newspapers, the Drudge Report would be sheer drudgery; Gawker.com would have much less to gawk at.
Sustaining a daily newspaper is no easy, or inexpensive, task. The very wealthy people or corporations who operate in this arena generally have a purpose, apart from making money, in doing so. It may be a family legacy, a commitment to public service or even - gasp - the advocacy of a point of view. Strictly looking at the numbers, however, newspapering is a tough business, and it’s only getting tougher.
As costs for ink, paper and transportation rise, newspaper ad revenues are falling. On July 18, McLean-based Gannett Co. (where I once worked as a reporter in its Government Media Corp. unit), disclosed that in the second quarter of 2011, its U.S. “advertising revenues declined 7.2 percent and at Newsquest, the company’s operations in the [United Kingdom], advertising revenues were 10.3 percent lower.” Decreased advertising revenue means less money to invest in the news product.
Almost 30 years ago, in 1982, Al Neuharth, then Gannett’s CEO, poured millions into creating something unique for the United States: a national, daily, general-interest newspaper. USA Today worked because it met an unmet need, but where is the 2011 USA Today? Instead of spending $300 million to create a modern-day online successor to Mr. Neuharth’s bold move, AOL passed the money over to Arianna Huffington, who now controls editorial policy for the online service. That may or may not work out for AOL, but many fans were dissatisfied that an entrepreneur known for “aggregating” (read: summarizing and linking) other people’s work is now in charge.
Bill Gates and Microsoft Corp. put millions into Slate, an online journal that was supposed to supplant newspapers - at least digitally - but it was unprofitable for Microsoft and is now wholly owned by The Washington Post Co. Mr. Gates isn’t known to be hunting for any other media properties, nor is Facebook founder Mark Zuckerberg. Indeed, the most recent backer of a major digital news initiative, the iPad-only venture called the Daily, is the now-scorned Mr. Murdoch.
You can count the number of wealthy media entrepreneurs on your fingers, and still have digits to spare. Some are dead (Robert Maxwell), or fighting legal issues (Conrad Black), or essentially out of the game (Sam Zell). Denver’s Philip Anschutz made a valiant effort in print, but his Examiner franchises live chiefly in cyberspace, not at one’s front door each morning.
Among the very few still standing is Mr. Murdoch, whose fabled love for ink on dead trees is a testimony not only to his family’s roots - his late father nurtured a daily newspaper in Adelaide, Australia, into a huge business, providing the impetus for global expansion - but also to his commitment to the medium. In New York, Boston and San Antonio, Mr. Murdoch stepped in to buy flagging properties and try to revive them. His Texas experiment failed and the Boston Herald is now in private hands. But in New York, and in Boston, too, there are daily newspapers today that might not have been there but for Rupert Murdoch.
Whatever happens in the now-infamous phone hacking scandal that has gripped Mr. Murdoch’s British papers, and whoever is responsible for it, will doubtless come out in the days ahead. If it forces some kind of breakup of his media conglomerate, those of us who cherish newspapers and appreciate the folks who fund their operation may well wonder if we shall ever see his like again.
Mark A. Kellner writes a weekly technology column for The Washington Times. He has never been employed by any News Corp. enterprise.