Rupert Murdoch once took a look at buying the Seattle Post-Intelligencer
Opponents of the joint operating agreement between The Seattle Times and the P-I tried to find someone who would buy the "failing" P-I back in 1982. That led to a cat-and-mouse conversation with the media baron who now proposes to buy The Wall Street Journal.
Rupert Murdoch, the press baron who has put forth a $5 billion offer to buy Dow Jones and its Wall Street Journal, is termed "a throwback to the William Randolph Hearst era, when publishers were openly partisan, made backroom deals, and even ran for office," as Howard Kurtz writes in The Washington Post.
That reminds me of the time when Murdoch gave some thought to buying a Hearst property, namely the Seattle Post-Intelligencer, way back in 1982-83. Hard to tell how serious it was then, or whether it could ever get serious again.
I was a bit player in the legal struggles over the formation of the original joint operating agreement (JOA), the federally blessed joint venture that yoked together the Seattle Times Co. and Hearst Corp. in an agreement that has just been renewed for another nine years, if not longer. I was publisher of Seattle Weekly at the time, and I helped form an umbrella group, called People Opposed to a 1-Newspaper Town (or PO1NT) to oppose the proposed merger under the Newspaper Preservation Act. The late Bill Dwyer was our pro-bono attorney, and this great lawyer gave the two papers fits before we lost the case in the Ninth U.S. Circuit Court of Appeals.
Key to the P-I's case was its assertion that it was a failing newspaper, so far gone that nobody else would buy it, and therefore it needed the relief of a federally sanctioned commercial monopoly (combining all business functions but keeping separate and competing newsrooms). I and others made some calls to see if any other publisher might come forward and say they would be interested in buying the "failing" P-I. That would have buttressed our case that there was a simpler course than granting the monopoly: just sell P-I to somebody who would make a go of it, standing alone.
Somehow, a signal of interest came from Murdoch, and Dwyer went to New York to talk with him. Dwyer reported years later that Murdoch had a keen sense of the Catch-22 of the whole situation. If he came forward and said he was interested in purchasing the P-I, he would so anger Hearst that there would be no way the latter would ever sell to Murdoch. Another complication was that Murdoch in 1982 was in the process of buying the Boston Herald-American from Hearst, so he had an additional reason not to antagonize the Hearst Corporation.
At any rate, Murdoch never came forward, and none of us could find any other publisher to express interest in a purchase. I remember having a mixture of disappointment at the legal setback and relief at not having Murdoch come into the Seattle market.
Murdoch's Catch-22 is just one of the perversities of the Newspaper Preservation Act, which serves as a kind of incentive for weaker papers to go ahead and "fail" to be rewarded with monopoly. Many major publishers deplore the act, which is a prime example of special-interest legislation, but they form a kind of club, whose members would not overtly interfere with the request of another publisher for JOA status. That would be very bad form. (Murdoch, of course, is not overly concerned about form.)
Worse, these JOAs are also a way by which the stronger paper is able to prevent the junior paper from being sold to a genuine competitor, since anyone buying the lagging paper would be stuck in the JOA, with no way to turn the smaller paper around. The temptation is to let the struggling paper sink gradually away while still occupying the part of the market that a competitor or startup would need to have. Seattle has succumbed to this dispiriting arrangement ever since 1983 and, amazingly, has decided to keep it going even as newspapers are in desperate need of reinvention – an exercise possibly now put off in Seattle until 2016.
All that might have been avoided if, God forbid, the shrewd Rupert Murdoch had looked across his desk at canny Bill Dwyer and said, "Sure, I'm interested, and you can quote me!" Oh well, maybe Murdoch will be consoled by gobbling up The Wall Street Journal.
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Comments:
Posted Tue, May 15, 9:41 a.m. Inappropriate
Good Piece on JOA History: Fascinating piece on the Rupert Murdoch-Bill Dwyer meeting about a possible P-I purchase. Fun to recall the clever acronym, PO1NT. I was at The Times when the JOA was announced, having come there 5 years earlier partly because Seattle was then still a town with two separately owned, competing newspapers. While working on a master's degree in journalism at Stanford in 1970, I wrote a paper criticizing the Newspaper Preservation Act when it was passed by Congress that year. Most critics called it the Publishers' Preservation Act. Interesting to see how Joint Operating Agreements have struggled or failed in many cities around the country. And it will be even more interesting to watch how The Times and the P-I manage now that they have "preserved" themselves for at least several more years. Brewster is right: Newspapers are in desperate need of reinvention. They should start by being more open, transparent and accountable, which would help them retain public trust. See www.wanewscouncil.org for a good example of a newspaper on the cutting edge in that regard. Crosscut is on the cutting edge, too. Keep it sharp.
Posted Tue, May 15, 11:38 a.m. Inappropriate
The Piper
Posted Tue, May 15, 1:51 p.m. Inappropriate
RE: Good Piece on JOA History: Junk mail, my friend, will always be there to fill that void.
Posted Tue, May 15, 2:53 p.m. Inappropriate
Actually, a great use of the stuff is in the garden. Instead of that nasty landscape fabric or black plastic, old newspaper covered over with bark is a perfect mulch! It all eventually decomposses thus ensuring a continuation of the circle of life. Ashes to ashes; P-I and Times to dust.
The Piper
Posted Tue, May 15, 5:20 p.m. Inappropriate
Note that Murdoch is currently pursuing the Wall Street Journal with the intent of expanding its reach across the globe. That is the one growing niche still available to the paper newspaper: the global newspaper that has not yet achieved global reach. As these papers become more powerful, local papers become less so, and the business cycle spiral downward worsens. Crosscut's notion of becoming a regional purveyor of news would seem to be consistent with this larger global vision, though neither global in scope, nor a physical paper product.
Because advertising revenue is increasingly being siphoned away from paper papers and from news organizations in general, the online medium has a curious position in the current shift away from paper papers. Crosscut, for example, is unburdened with the enormous expense of printing and delivering a physical product, so as a business doesn't cost nearly as much to operate as a paper paper, and the cost of content and technology are presumably its two greatest costs. However, generating significant revenue in a competitive online advertising world ain't easy, and being profitable and sticking out from the many online newspapers is a tremendous challenge. Online one must compete with global papers such as the NY Times and the Wall Street Journal; local online newspapers; local paper newspapers; Google News and Yahoo News; the online versions of ABC News, Fox News, CBS News, et al.; and thousands of news blogs.
In the online arena the technological ante is constantly being upped. Videos, networks of blogs, photo albums associated with stories, are now being integrated into self-organizing layouts on the screen that take advantage of individual screen real estate, the personalized content preferences of news consumers, and the subscription to the personally relevant streams provided by thousands of syndicated sources.
The upshot is that just because you're sitting on a deck chair made of wood on a sinking deck, or clinging to it in the sea of online news, there's no guarantee that you'll ever make it to shore. My bet is that in ten years that all newspapers will be predominately online, with some printed versions available at extra cost, and that either the Times or PI or both will be moribund and at least one will die off. In the online arena, there's room for several views of the world presented by say the PI, Crosscut, and the Stranger. Or maybe its the Times, the PI, and the Weekly. No one knows right now. Time will tell. But getting the business model right means keeping up with technology and continuous experimentation to identify profitable niches and opportunities. The big guys like the Times and the PI will outsource their technology to keep up with the Joneses, will continue to operate hybrid paper/online news organizations, but will be unable to innovate to the degree possible with newer, more nimble online competitors. The little guys like Crosscut must focus on innovation in presentation and content, and innovation in the business model. Compelling, high-quality content and presentation attracts readers. Monetizing these readers remains a challenge, but Google and others have shown that this is the Great Nearby and not the Great Far Away.
Posted Sun, May 20, 6:36 p.m. Inappropriate
He bought the Village Voice which owns Seattle Weekly which I used to enjoy. It took a while but they eventually fired all the writers who made Seattle Weekly worthwhile. Now I don't know what to think of it. I only know my primary emotion toward Seattle Weekly is not one of enthusiasm, and my general feeling is that its being free is too high a price to pay.
I don't want to see Rupert Murdoch come to town, he thinks he knows what I like, but he's not only presumptuous, but wrong.
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