Tribune needs to look at big picture
IN Chicago today, the directors of the Tribune Co. will be deliberating the fate of this newspaper and 10 others across the country.
Tribune’s board of directors will weigh a proposal from billionaire Los Angeles businessmen Ron Burkle and Eli Broad to acquire the entire company; one from the Chandler family trusts to break the company up but leave the Chandlers in control of the newspapers; and one from the private Carlyle Group to buy just the company’s television stations. The board also may consider proposals from Tribune’s management or alternative arrangements of its own devising.
The law requires that whatever decision the board reaches must be taken in the best interests of all the company’s stockholders. The only voices raised on behalf of this newspaper’s readers and their community -- or, for that matter, those of the Chicago Tribune, Baltimore Sun, Newsday or the other seven papers and their communities -- will have to come from the directors’ consciences.
And yet a decision taken without giving the claims of social conscience a hearing cannot be in the real interests of either Tribune’s newspapers or, for that matter, stockholders willing to take a view of their investment’s value that extends beyond the next quarter’s report.
The so-called auction for Tribune has been a disappointment to Wall Street, principally because none of the private equity firms whose participation was widely anticipated has bid. Actually, their silence tells us something important about the management of Tribune and its newspapers. In essence, the shrewdest, hardest-hearted, coldest-eyed guys on the planet -- American private equity investors -- have kicked Tribune’s tires and said there’s no way to run the machine any leaner. They couldn’t, in other words, see any way to impose the “efficiencies” -- that translates as layoffs and budget cuts -- they usually use to “realize value” in the companies they acquire.
That means that whether the current management or somebody else leads The Times into the future, the smart money boys don’t see any way to cut a path to prosperity. It’ll just have to be done through reinvestment and innovation -- the qualities that will make possible the emergence of the print/online hybrids that clearly are the future of newspaper journalism.
That brings us to the bid by Burkle and Broad, which proposes to take control of Tribune by investing just $500 million and then saddling the company with more than $10 billion in debt so that stockholders can be paid a super dividend. The two say they anticipate no layoffs or cuts will be required to service that debt. They have stellar resumes, but it requires a substantial leap of faith to accept that a couple of guys with no experience running a media company are so brilliant that they can manage that debt level in this era, make the level of reinvestment required by The Times and not hurt somebody, somewhere. They didn’t become billionaires by losing large sums of money.
The Chandler bid is notable mainly because it evokes memories of Otis Chandler, whose leadership made the modern Los Angeles Times possible. As someone who worked for Otis and knew him, let me say that the qualities that made him an admirable leader were precisely the things that made him different from the rest of his family. This bid is being made in the best traditions of the rest of his family and is essentially a scheme for further enriching themselves and sticking the rest of Tribune’s stockholders with the capital gains taxes the Chandlers will, of course, avoid. They are as they always have been, less a family than an organized appetite.
What all this suggests is that local ownership of this or any other newspaper is not an end to itself.
The American system -- in which a hard-won deference to 1st Amendment freedoms generally prevails -- has made our society one in which free expression flourishes. What it can’t do, of course, is to guarantee even the most vital speech an audience. Moreover, that same deference has made it extraordinarily difficult for our public institutions to deal with deformations of free speech created by the blunt force of the marketplace.
Local television, which is the medium the majority of Americans rely on for their news, is the perfect case in point. Every television station in America broadcasts on frequencies that are the property of the American people. In consideration of that fact, the federal government licenses them all to “operate in the public interest.”
Does anyone seriously think that they do? Over the years, as more and more of these stations have been aggregated into chains and those entities, in turn, have been acquired by larger “communications companies,” like Tribune, notions of public service have withered. Today, most local television stations maintain vestigial news operations that virtually ignore politics and government in favor of the sensational and superficial --anything that can be loosely called news and collected on the cheap.
The only interests served are the financial interests of the stations’ owners.
Something similar has been creeping across the American newspaper industry for decades now, as chain ownership has sprawled across the landscape like a corporate kudzu vine. One vital local or regional newspaper after another has been hollowed out by frightened managers with margins to meet on behalf of desperate executives with unforgiving investors to satisfy. In town after town, readers have been left with papers that are little more than columns of generic type assembled for no other purpose than to surround the ads.
Nothing substantial has been done to arrest this trend or the one that has made local television’s mandate to operate in the public interest a dead letter. Worse, most of the governmental interventions that have been proposed to halt this process are fraught with even more dangers to 1st Amendment freedoms than the current situation.
In other words, the same system that has made the American news media among the world’s freest also has made them extremely vulnerable to the quality of their owners. Public opprobrium and the disinterest of readers and viewers are the only real checks on their avarice -- that, plus a powerful tradition among newspaper proprietors that theirs was more than just a business.
The cords that bind a newspaper to its readers are woven from pragmatic insight -- no profit can be sustained as an affront to the public interest -- and from the claims of conscience -- even if it could be sustained, no such profit would be worth having. What the Los Angeles Times and its readers need from the people weighing the future in Chicago is a decision that takes this -- and not only the most crabbed and narrow definition of stockholders’ interests -- into account. Like every other newspaper in America today, what this one requires is a proprietor who has a sufficient sense of responsibility toward the paper and its place in the community, one willing to finance the reinvestment required to move through this transformative period.
It doesn’t matter whether that proprietor lives in Brentwood, Davenport, Iowa, or on the dark side of the moon. It’s their conscience and not their place of residence that counts.
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