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Washington Post Sale Ushers In A New Age Of Publishing

Memo Pad National News

Washington Post Sale Ushers In A New Age Of Publishing


Amazon.com founder Jeff Bezos bought The Washington Post — a newspaper no one knew was for sale — on Monday, in a move with enormous implications for not just the news, digital, and retail industries, but for the future of democracy in America.

The Washington Post sale makes it much more likely that The New York Times, the world’s most influential newspaper, will be sold next year to New York City mayor Michael Bloomberg, who leaves office Jan. 1 with no announced plans for the future. Bloomberg, whose income runs more than $1 billion annually, chafes at how his Bloomberg company terminals are the nerve centers of Wall Street, but his solid (and deadly dull) news operation has less influence than some Internet pipsqueaks.

Bloomberg, like Bezos, has the very deep pockets needed to invest in the news business and devise a model suited for the Digital Age. Both men also have a long-term vision focused on wealth creation, rather than quick profits, and on affecting the body politic rather than enjoying a life of idle decadence.

Meanwhile, the Koch brothers may buy the Los Angeles Times, Chicago Tribune and other newspapers. With Rupert Murdoch in control of The Wall Street Journal, we could see a new age of publishing titans duking it out for readers, but in a world where readers are much more sophisticated and have access to other sources of information than in the yellow journalism era more than a century ago when Hearst and Pulitzer invented news to sell papers, or the Red Scare era when the Chandlers of Los Angeles effectively invented Richard Nixon and pushed him toward the White House.

It would be a huge public benefit to restore actual competition among news organizations in which ideas, policies and facts about how government and the economy perform actually got thrashed out in public.

If we are lucky we may even enjoy the many benefits of aggressive and skeptical reporting, instead of the stenography that Aaron Sorkin skewers on HBO’s The Newsroom.

While the new world of digital commerce and Internet news distribution opens new opportunities, taking advantage of them requires the aforementioned deep pockets. Neither the Grahams of Washington nor the Sulzbergers of New York have much economic muscle anymore, thanks to the creative destruction of the digital economy compounded by their own mismanagement.

A basic tenet of business is to give people more for less, yet for decades publishers raised prices while cutting the physical dimensions of the printed page and the size of the news staff, while paying the established talent (including me) to go away because they could not afford us anymore.

More profit for less product is not a sound strategy. It is, instead, a way to milk the business so when you sell out, the damage is less than it appears.

Bezos paid just $250 million for the Washington Post, close to pocket change for the Seattle mogul.

Last week the Sulzbergers sold the Boston Globe and other New England properties for $70 million, just four cents on the inflation-adjusted dollar they paid in 1993. It is no coincidence that the record high price for a newspaper was paid for the Boston Globe in 1993, the year the first Internet browser, Mosaic, opened the World Wide Web to an audience beyond the scientists and geeks who communicated in arcane code.

The New York Times is likely to sell for less than a half-billion dollars, even though it is so beloved by readers that they now bring it more money through circulation and Internet fees than advertisers pay to reach them, an exceptionally educated and thoughtful audience.

The problem here is not a thirst for news. Demand is great and growing, especially as the world becomes ever more complex and the federal government accretes power, secret power, to itself through massive spying and lying as well as reducing public access to information, an issue far too few journalists have reported on.

The problems are revenue and adjusting the newsgathering and delivery mechanisms to the times without violating the principles of sound journalism.

The biggest newspaper moneymaker – classified ads – has moved to Craigslist and the like. Old man Pulitzer called those ads “mustard,” a reference to the piles of tiny seeds that are needed to make the yellow condiment. Traditional publishers do not know how to get those ads back, but perhaps Bezos and Bloomberg will figure it out or come up with new revenue streams.

In the age of the printing press, where your newspaper was located mattered.  You could put out a fine newspaper in Des Moines or Minneapolis; Delta, Mississippi or Watsonville, California, but you would have no measurable influence beyond the most distant porch where your paper was delivered each day.

The Los Angeles Times, where I worked from 1976 to 1988, spent a fortune delivering morning copies to every member of Congress, as well as opinion makers in Manhattan.  It even briefly distributed same-day papers in Beijing, forcing earlier deadlines for hometown news, or at least so said a memo on the newsroom bulletin board to which I attached a proposed new slogan (which management quickly took down):

The LA Times — Yesterday’s News Day After Tomorrow.

But in the Digital Age location matters hardly at all — except for local retail advertising revenue, which is shrinking like a wool sweater in a clothes dryer.

Today Americans who want to know about illegal government behavior find it in the online version of the British newspaper The Guardian, but not so much in the Washington Post, New York Times or Los Angeles Times (which all did superb investigative work on Watergate, as well as the Pentagon Papers and domestic spying).

Indeed, The Guardian has been eyeing a U.S. print edition, like the Financial Times, which is based in London.

What digital distribution means, though, is a new opportunity. Publishers who can focus simultaneously on the news today and the audience of the future, instead of how to bring in enough cash this week to meet payroll, can both do well and enjoy the power of publishing a widely read news report.

They should even be able to afford properly staffed copy desks whose duties include keeping mistakes out of the report.

David Cay Johnston

David Cay Johnston won a 2001 Pulitzer Prize for his coverage of taxes in The New York Times. The Washington Monthly calls him “one of America’s most important journalists” and the Portland Oregonian says is work is the equal of the great muckrakers Ida Tarbell, Lincoln Steffens and Upton Sinclair.

At 19 he became a staff writer at the San Jose Mercury and then reported for the Detroit Free Press, Los Angeles Times, The Philadelphia Inquirer and from 1995 to 2008 The New York Times.

Johnston is in his eighth year teaching the tax, property and regulatory law at Syracuse University College of Law and Whitman School of Management.

He also writes for USA Today, Newsweek and Tax Analysts.

Johnston is the immediate past president of the 5,700-member Investigative Reporters & Editors (IRE) and is board president of the nonprofit Investigative Post in Buffalo.

His latest book Divided: The Perils of Our Growing Inequality an anthology he edited. He also wrote a trilogy on hidden aspects of the American economy -- Perfectly Legal, Free Lunch, and The Fine Print – and a casino industry exposé, Temples of Chance.

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  1. Dominick Vila August 6, 2013

    If the Koch brothers manage to buy some of the media outlets they are interested in, what passes for journalism in the USA will be nothing more than the advertising branch of big business. Not even Goebbels managed to go this far.

    1. Mark Forsyth August 6, 2013

      Check out The Spectator,I have not yet gotten an issue to read but it is endorsed by Bill Moyers who is an admirer and proponent of good responsible journalism.

  2. Lovefacts August 6, 2013

    If the Koch brothers buy the LA Times and the Chicago Tribune, it will be the end of what’s left the print media as we know it. Investigative journalism will cease. I’m unsure what Bezos buying the Washington Post will do to that paper or Bloomberg with the NY Times.

    1. Catskinner August 6, 2013

      It would certainly by the end of what David Duke calls the Jewish dominated media.

      1. Lovefacts August 6, 2013

        This is one of the oldest canards around. This accusation was a major theme in the 1903 anti-Semitic pamphlet “The Protocols of the Elders of Zion.” It was widely repeated in the early part of the 20th Century by the “Dearborn Independent,” a newspaper published by Henry Ford. While disproven, since that time it’s become the lie that won’t die as
        your comment proves. It seems the off-repeated and paraphrased Goebbels’ statement “Tell a lie often enough and it will be believed” is alive and well. He’s also credited with saying the following paraphrase: “The bigger the lie, the more it will be believed.”

        As for your claim the Jews control the news and politics, not true. In NYC, approximately 12% of the population is Jewish. In US, according to the American Religious Identification Survey, only 1.2% of the population is Jewish. I will agree that in Hollywood you will find Jews
        heading major studios. However, they don’t head a single major TV news operation be it Fox, CNN, MSNBC, ABC News, CBS News, or NBC News. While the Ochs Sulzberger family, which has controlled the “New York Times” for more than a century, is of Jewish origin, the current Executive Editor Bill Keller isn’t. Since 1946 when non-Jewish Philip Graham took control of the Washington Post, there hasn’t been a Jew heading the paper. Oh, they also don’t control or lead the Senate, the Congress, the CIA, the NSA, or the State Department.

        1. Catskinner August 6, 2013

          Okay! Take it up with David Duke.

          1. Lovefacts August 6, 2013

            David Duke didn’t write the comment I responded to. However, if you’re getting your information from David Duke, an acknowledged Neo-Nazi, and believe it, I will no longer respond to your comments. It’s obvious you have no desire to learn or hear the truth. It’s equally plain that only hate speech appeals to you.

    2. Wolf Baginski August 14, 2013

      What “investigative journalism” might benefit Jeff Bezos?

      Amazon has a chunk of the cloud-computing pie, but that depends on companies trusting Amazon and the internet. Now the NSA story is out there, would it be better for Amazon for the story to be aggressively pursued, putting pressure on the politicians, or to be covered up.

      Is the Washington Post going to pick its fights differently, or go silent?

      Right now, all we can do is guess. I don’t think it can pay to go silent. What makes a newspaper worth buying? Even the legendary “Page Three of The Sun” in England has an element of controversy. It’s content that stands out.

      (Yes, I know what I wrote there.)

      Without investigative journalism, what is there to make a newspaper, or any other news business, different enough to sell to paying customers?

  3. Catskinner August 6, 2013

    It seems funny to me that everyone is fine with Bloomberg and Bezos buying news papers, but raise holy-hell when the Koch brothers want to buy one.

    1. davidcayjohnston August 6, 2013

      Clearly you are NOT reacting to my column above, but to whatever is going on inside your head. My column suggests a mix of new owners would be good.

      1. Catskinner August 6, 2013

        Yes, you’re right about that. What was going on in my head was the violent reaction from the left-wing-loons when they heard the Koch brothers were interested in the LA Times.

      2. elw August 6, 2013

        David, Catskinner lives in his own world and seldom makes sensible comments.

    2. Dominick Vila August 6, 2013

      I don’t know about anybody else, but I am not fine with special interests buying the media, regardless of their political affiliation or leanings. What I am concerned about is the pervasive influence of money in policy making and our inability as citizens to reach logical conclusions based on fact, as a result of sources of information being owned by people who manipulate the truth to achieve their goals.

  4. itsfun August 6, 2013

    Buy one left wing paper and one right wing paper, read both, then figure the truth is somewhere in between.

  5. elw August 6, 2013

    I stopped buying the paper 10 years ago, when I found that even the “news” stories were becoming nothing more than opinion pieces. There are very few honest and real journalists left in the news industry and very few newspaper that are anything more than a sounding board for the views of the people that own it. I will start buying one again when I find one that is printed in the basement of someone’s house and the person that owns it is reporter, printer and editor. There is something completely immoral about a society that makes every single activity in it a profit center.

    1. metrognome3830 August 6, 2013

      Newspapers always were a sounding board for the person or people who owned them. But, in the past, their views and opinions were clearly separated from the news and confined to the editorial or opinion page. And the publisher was a guy who lived in a middle to upper middle class neighborhood in the city/town/county his paper was published. I worked in newspapers for 10+ years and watched as newspapers became corporations instead of news organizations. I’m not sure what will happen when people like Jeff Bezos take ownership of major newspapers. I hope they might move to return newspapers to what they once were. Until then, I will reserve judgment.

      1. elw August 6, 2013

        Well maybe we will both be surprised 🙂

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  7. Jim Myers August 10, 2013

    While I agree with the vast majority of what David Cay Johnston wrote, there is one glaring mistake in this article.

    The Koch Brothers clearly are not against unions. They are only against LABOR unions.

    Consider the John Birch Society, the Americans For Prosperity, etc. Although they are not LABOR unions, they are clearly unions of like-minded people, with the common goal of destroying the middle class and ALL Social Programs that benefit them.

    And, of course, reduction, (or elimination), of taxes on the wealthy, and also the elimination of regulations and taxes on business.

    After all, the only TRUE AMERICANS are the wealthy and powerful “Job Creators.”

  8. Wolf Baginski August 14, 2013

    The internet has been a big part of the decline of newspaper profits, but didn’t that decline start before the internet got going? It needed a lot more than a web browser. For me, personally, the internet couldn’t compete with newspapers, TV and radio until I could get a broadband, always-on, connection. And that timing does depend on where you are.

    The appearance of Mosaic gives you a date. But back then even a dial-up connection to the internet was pretty unusual. Local differences again, but without the connection infrastructure how could the internet compete with newspapers?


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