The Slippery Slope of the Oligarchy Media Model
By Rodney Benson, New York University and Victor Pickard, University of Pennsylvania
On July 28, Apple heiress Laurene Powell Jobs bought a majority stake in The Atlantic.
It’s the latest media purchase by the billionaire class, a group that includes Amazon founder Jeff Bezos (the Washington Post), Boston Red Sox owner John Henry (the Boston Globe), billionaire Glen Taylor (the Minneapolis Star-Tribune) and casino magnate Sheldon Adelson (the Las Vegas Review-Journal).
Some have praised this growing trend, arguing that wealthy individuals are journalism’s last, best hope. And there are notable cases of rich philanthropists, like Pierre Omidyar and Gerry Lenfest, making significant donations toward public service journalism.
Nonetheless, potential hazards arise when news outlets increasingly rely on private capital and billionaires’ largess.
The Upside of Privatizing the News
Private ownership of news organizations is, of course, nothing new.
Since at least the late 19th century, most major U.S. magazines and newspapers have been owned or controlled by wealthy individuals or families. Often these owners distinguished themselves by their commitment to journalistic excellence: at The New York Times, the Ochs-Sulzberger family; at the Los Angeles Times, the Chandlers; and at the Washington Post, the Grahams. In the magazine world, Condé Nast, privately owned by the Newhouse family’s Advance Communications, continues to produce magazines highly regarded for their journalistic rigor, from the New Yorker to Wired.
Between the 1970s and early 2000s, however, media companies increasingly became publicly traded stock corporations that often expanded into large chains. Gannett, owner of USA Today and over 100 other daily newspapers, and Sinclair, proprietor of 173 television stations, are currently two of the largest publicly traded media companies.
In contrast to a private company – which can forgo profits if it chooses – a publicly traded company has obligations to maximize shareholder value. Emphasizing profitability often comes at the cost of professional excellence or civic commitment, even at media companies like the Washington Post, where the founders retained control of voting stock after going public in 1971.
As Kathryn Weymouth, the last Graham family publisher of the Washington Post, remarked when she passed the baton to Bezos: “If journalism is the mission, given the pressures to cut costs and make profits, maybe [a publicly traded company] is not the best place for the Post.”
So compared to Wall Street control, private ownership has many potential advantages. As Bezos has demonstrated, a private owner can absorb short-term losses in service of long-term gain. While most news organizations are still in austerity mode, the “new” Washington Post is increasing staff and budgets. Many believe it’s also dramatically improving its quality and impact.
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