The World’s Smallest Violin

The World’s Smallest Violin

Yesterday, The New York Times ran a business-section feature describing how poorly things are working out for the billionaires who bought struggling major media operations, only to see them continue to struggle and continue to hemorrhage money.  As it turns out, Jeff Bezos is losing a ton as the owner of The Washington Post, the poor dear:

As the prospects for news publishers waned in the past decade, billionaires swooped in to buy some of the country’s most fabled brands. Jeff Bezos, the founder of Amazon, bought The Washington Post in 2013 for about $250 million. Dr. Patrick Soon-Shiong, a biotechnology and start-up billionaire, purchased The Los Angeles Times in 2018 for $500 million. Marc Benioff, the founder of the software giant Salesforce, purchased Time magazine with his wife, Lynne, for $190 million in 2018….

[I]t increasingly appears that the billionaires are struggling just like nearly everyone else. Time, The Washington Post and The Los Angeles Times all lost millions of dollars last year, people with knowledge of the companies’ finances have said, after considerable investment from their owners and intensive efforts to drum up new revenue streams.

Regular readers might suspect that we – being far pettier than we’d like to admit and having an ax to grind with Benioff – take a certain amount of pleasure in Time’s struggles.  And…we do.  We’ll admit, it tickles us, but not for the reasons you think.

In truth, it tickles us that all of these billionaires are losing their shirts on their media purchases, just as it tickles us that another billionaire, Laurene Powell Jobs (the widow of Apple founder Steve Jobs) has consistently lost money on her media purchase, The Atlantic.

Why does that tickle us?

If you read the whole New York Times story – and, as always, you should read the whole thing – you’ll see that it’s actually a pretty good piece.  It’s solid and substantive and mostly free of bias.  The only problem we have with it is the headline that some junior copywriter slapped on top of it: “Billionaires Wanted to Save the News Industry. They’re Losing a Fortune.”  That’s just dumb, as well as wholly dishonest.

Jeff Bezos didn’t buy the Post to “save” the news business.  Marc Benioff Didn’t buy Time to save the news business.  They bought their respective outlets for the same reason that Powell Jobs bought hers, TO CONTROL THE NARRATIVE.  None of these super-rich media dabblers gives a damn about the news industry.  They’re not Rupert Murdoch, for example, who is a billionaire who owns major media properties because he’s in the media business.  They’re not trying to change the way news is transmitted in the hope of rediscovering profitability or preserving independent reporting or anything else so high-minded and noble.  They just want to own a toy that they can use – subtly, to be sure – to bolster their images and advance their worldviews.  They don’t want to save the news.  They want to control it, to manipulate it, to ensure that it serves their purposes.

That’s why it tickles us.

If any of these billionaires was really interested in “saving the news industry,” he wouldn’t have spent his money on a prominent national outlet.  He would, instead, have spent it on something closer to home, something local.

As you may have heard, much of the media establishment is apoplectic about the fact that David Smith, the chairman of the Sinclair Media Group, which owns a ton of local TV stations, just bought the once-vaunted Baltimore Sun.  And what’s wrong with Smith, you ask?  What makes him so horrible and dangerous?  Well, you see, he’s not “one of us.”  Michael Tomasky, the editor of The New Republic put it this way the other day:

Smith wasted no time in showing his cards during his first meeting with the staff Wednesday. He was asked about a comment he made to New York magazine back in 2018, when he said, “Print media is so left wing as to be meaningless dribble.” (“Dribble”? Let’s hope he won’t be on the copy desk.) Did he feel that way about the Sun specifically? “In many ways, yes,” Smith said…

Mon Dieu!

What Smith gets is that local media matters.  And he gets that, of course, because he’s in the media business.  He’s not a rocket-building bookseller or a shareholder-fund-squandering self-righteous robber baron/software mogul who bought a media operation with his spare change.  He’s made the news business his business.  To be sure, Smith has his own agenda and his own narrative to push, but he knows that he has to do so in a way that appeals to a significant audience.  He can’t afford to write off his media business losses every year.  He has to make it work.

Almost five years ago, we wrote a series of pieces praising local media, insisting that local news would be the salvation of the industry – and the nation.  In one such piece, we put it this way:

We spend a great deal of time in these pages criticizing the “mainstream media” – and for good reason.  It is worth remembering, however, that not all journalists should be tarred by our broad brush.  Many journalists – including many left-wing journalists – do really, really good work.  And by our unscientific assessment, a large majority of those journalists toil away in virtual anonymity at various local outlets….

We have long believed and argued in print that Washington is not the place where the real action in this country takes place.  Washington is merely where the score is kept.  The real action takes place in the schools, churches, clubs, town halls, kitchens, and family rooms of the nation.  And given this, local journalism should, by rights, be the focus of our attention.  That it’s not is a shame.  That it could all disappear is a tragedy.

A couple of months later, we revisited the issue, quoting a piece on partisanship from Scientific American:

There are no doubt many reasons for the rise of partisanship, but our research, using voting data from across the country over a four year period, recently uncovered an important one: the loss of local newspapers. As local newspapers disappear, citizens increasingly rely on national sources of political information, which emphasizes competition and conflict between the parties. Local newspapers, by contrast, serve as a central source of shared information, setting a common agenda. Readers of local newspapers feel more attached to their communities. Unless something is done, our politics will likely become ever more contentious and partisan as the media landscape consolidates and nationalizes….

As newspapers continue to close, these dynamics are likely to get worse. The polarized electorate will continue to turn towards nationalized, partisan media outlets….

The death of local media is both a symptom and a cause of the ongoing politicization of everything – as are the billionaires who invest their money in large national media outlets, only to use them specifically to push their preferred social and political narratives.

Marc Benioff and Jeff Bezos are losing a fortune on their media hobbies.  But don’t feel sorry for them.  Feel sorry for us, as a nation.

Stephen Soukup
Stephen Soukup
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Steve Soukup is the Vice President and Publisher of The Political Forum, an “independent research provider” that delivers research and consulting services to the institutional investment community, with an emphasis on economic, social, political, and geopolitical events that are likely to have an impact on the financial markets in the United States and abroad.