January/February 2014 Openers

Opinion: What the future holds for family-owned newspaper companies

By Frank A. Blethen

Is there a future for family owned newspapers? Will newspapers even exist in the future?

These questions come to mind when one considers the difficult environment in which family newspapers operate today. In recent months our industry has experienced dramatic shifts. Family-owned Advance Publications decreased the print publication schedule of its newspapers in Alabama, New Orleans, Portland, Ore., and Cleveland. Times-Shamrock, a family media company based in Pennsylvania, sold some of its newspapers. And two of the nation’s most famous family-controlled newspapers, The Washington Post and The Boston Globe, have been sold. A new breed of newspaper owners has emerged, led by Warren Buffett, Jeff Bezos and John Henry.

With these changes in mind, how would I answer the questions above? I believe that there is a future for family-owned newspapers. I also believe that newspapers will continue to exist well into the future, but there will be continued change, disruption and uncertainty. And the outcome—good or bad—will be profoundly affected by government action and political will.

These are vital concerns not just for family media and journalism businesses but also for all Americans. The outcome will have much to do with the survival of our 200-plus-year experiment in self-government, and whether we can rebuild a healthy economy and vibrant middle class.

Throughout history, almost always government and cultures fail from within. This is where we are today in our country—on the brink of the abyss.

The consolidation of the newspaper business, once dominated by local family ownership, and the disinvestment in newsgathering has coalesced with the evisceration of Main Street by faceless financial mercenaries and is one of America’s greatest dangers.

Historical context

We all know the foundation of the American dream is our elegant Constitution, including the Bill of Rights and the amendments. But many Americans are unfamiliar with the history of the two other essential foundational pieces put in place by our nation’s early leaders. Those two additional elements, which are absolutely essential in order for our democratic self-government experiment to work, are newspapers and public education.

The gathering and reporting of news is protected and nurtured by the federal government. The First Amendment guarantees the rights to free speech and freedom of the press. The U.S. Postal Service, the first federal agency, was created to support ubiquitous free distribution of newspapers because early leaders understood that for self-government to work, the general populace, not just the elites, must have access to high-quality information. Public education was nurtured by the federal government’s Common Schools Act of 1871 and was premised upon the understanding that democracy required its citizens to be educated, regardless of status or class. These two truly egalitarian actions helped America achieve the highest literacy rate in the world.

The path back to prosperity

Today, America faces a crisis of unequal opportunity for all: a widening wealth gap, a terrible education achievement gap and a shrinking middle class.

The lack of quality, accessible education and the loss of a once diverse and robust system of independent newspapers are the key drivers of our wealth and opportunity gaps. Our Founding Fathers understood that all citizens must feel a part of the American dream; otherwise, self-government could not be -sustained.

The path back to economic prosperity and opportunity for all begins with radical changes in our calcified and decaying public education system and in our newspaper and media ownership structure.

About 60 years ago, noted journalist Walter Lippmann said he was secure in his belief that American democracy would endure. “… [T]here is, I believe, a fundamental reason why the American press is strong enough to remain free,” Lippmann said. “That reason is that the American newspapers, large and small, and without exception, belong to a town, a city, at the most to a region.”

The secret of a truly free press, Lippmann said, is “that it should consist of many newspapers decentralized in their ownership and their management, and dependent for their support upon the communities where they are written, where they are edited and where they are read.”

Lippmann concluded by saying, “There is safety in numbers, and in diversity, and in being spread out, and in having deep roots in many places. Only in variety is there freedom.”

This was still our newspaper world when I began my career in 1968. Forty-five years later the state of the newspaper industry is Lippmann’s worst nightmare. Approximately 80% of all newspaper revenue and circulation is now controlled by absentee public corporations and profit-driven investors.

This dangerous level of control exists throughout our entire system, from content creation to distribution and control of access. It encompasses newspapers, radio, TV, the Internet, books, Hollywood and phones.

The Seattle Times is the largest of only five locally owned family newspapers left in the top 50 markets. We have had to concede our former standing as the largest privately held newspaper in the country to our Seattle neighbor Jeff Bezos, who now owns the venerable Washington Post.

Newspapers must contend with a new reality that includes the challenges of integrating print and digital platforms, digital subscribers as part of the revenue mix and dramatic demographic and technological changes. But the basics of good journalism, independence and community connection will still be needed. Newspapers’ role as a watchdog will remain critical.

A ray of optimism

Since I first spoke out against newspaper and media consolidations in 1988, there has been a steady erosion of diverse and local ownership. With ever-increasing consolidation and decreased emphasis on journalism, we have become a less informed and less engaged society.

Cheap-to-produce celebrity gossip and uninformed talk shows have replaced real news. All too often, this form of “information” supplants public acumen and engagement on important issues.

The peak of destruction for our once robust newspaper and media system came with the 2008 financial collapse and the bankruptcy of many of the media consolidators.

Hope of a return to enlightened and diverse ownership was dashed as investor groups swooped into bankruptcy proceedings to buy media companies as “distressed assets,” aided and abetted once again by a sleeping Federal Communications Commission and Department of Justice.

But suddenly, something new is beginning to happen. Warren Buffett started to buy newspapers for their public service value; he now owns well over 100. Jeff Bezos bought The Washington Post and, in doing so, took it out of the public financial markets knowing it is a special place and requires public service stewardship. Bezos’ insights on the digital world and his winning efforts in e-commerce could be groundbreaking contributors to an industry challenged by rapid and demanding changes. John Henry bought The Boston Globe undoubtedly for business synergies with the Boston Red Sox and New England Cable Network. At the same time, this transaction is cause for hope that Henry’s New England roots will provide local stewardship and as much attention being paid to journalism and community service as he paid to winning a World Series. They all have different reasons for making their acquisitions, but all bring the hope that public interest stewardship may be returning, and with it a renewal of local family newspaper ownership.

Frank A. Blethen is publisher and CEO of The Seattle Times Company. He is a fourth-generation member of the Blethen family, which founded The Seattle Times in 1896.

Copyright 2013 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.

Tribute to a former family owner

This plaque was placed outside the elevator at the headquarters of the Washington Post to honor Donald Graham, chairman of the Washington Post Co., which was renamed Graham Holdings Co. on November 29, nearly two months after the Graham family sold the historic newspaper to Amazon co-founder Jeffrey Bezos.

Graham Holdings agreed to sell the building to Carr Properties, a family enterprise, for $159 million. The Post will rent space in the building until it finds a new headquarters.