Shareholders Are Killing Newspapers

This week’s episode of PBS’ “News War,” includes remarks by the vice-chairman of Ariel Capital Management, the fifth largest investor in the Tribune Company, which owns 23 television stations and 11 newspapers. Charles Bobrinskoy’s comments present a picture-perfect illustration of everything that’s wrong with the newspaper business. Here are some examples of why stock pickers (never a particularly reliable bunch) should not be allowed to shape the future of media:

“People want to read about what’s going on in their own communities, and the Web usually can’t provide that. The Web can tell you what’s going on in Iraq; the Web can tell you what’s going on in Washington, D.C. It can’t tell you what’s going on in Des Moines if you live in Des Moines.”
Somebody ought to tell Bobrinskoy about Iowa Blogs. In fact, Bobrinskoy could use a remedial course in Internet 101. While the newspaper’s intended audience is much more narrowly focused than the worldwide scope of the net, that audience is no less interested in the world outside the city limits than it is in the affairs of city hall. Just because the web has a global reach doesn’t mean it cannot serve a community. Conversely, just because a newspaper has a local audience doesn’t mean it should ignore the rest of the globe. But that is exactly what Bobrinskoy proposes:

“Readers care about the local entertainment industry, which they don’t do a very good job of covering in the L.A. Times. They care about things like fashion, which The New York Times does a very good job of covering; the L.A. Times doesn’t. They should care about issues like immigration.”
Thanks for telling us what we should care about. Bobrinskoy goes on to make some remarkably contradictory comments about what makes a paper successful. He rebukes the L. A. Times for not being to local enough, then complains that, “The paper, in hindsight, probably could have used a little bit more management out of Chicago.” Continuing to bash the Times for its global perspective, Bobrinskoy advocates reductions in news staff and the elimination of foreign bureaus:

“It’s trying to report on why Bush went to war in Iraq instead of what’s going on in Southern California” [… and …] “the L.A. Times could focus on providing news, better news, investigative news on what’s happening in L.A. City Hall and be more focused and provide a better, higher-quality news product. And allow CNN and Fox to cover Istanbul. And then we’d all be better off. The shareholders would make a better return, and my news coverage would be better.”
I’m sure the shareholders would be quite happy if we were to divvy up news coverage so that the Times would get L. A., give Western Europe to CNN, the Middle East to Fox, Asia to Reuters, etc. Every news organization would have a geographic monopoly and consumers would get a single, unchallenged view of world affairs. This plan would, to the delight of shareholders, eliminate competition in both the financial markets as well as the marketplace of ideas. But this plan completely ignores the fact that most original reporting (estimated to be as much as 80%) is currently is done by newspapers, not CNN or, God forbid, Fox. Surprisingly, Bobrinskoy feels the need to go further and insult every reader of the L. A. Times and, in fact, every consumer of local newspapers:

“Do we really need the L.A. Times devoting the resources it has to [international events]” [… and …] “We’re saying there’s a role for probably three national newspapers — The Wall Street Journal, The New York Times, and USA Today. Each has its own niche; all three are national newspapers. We don’t think there’s any demand for a fourth. The L.A. Times is trying to be that fourth.”
I’m going to let Bill Keller, executive editor of the New York Times answer that:

“…the idea that the L.A. Times is going to say to readers, ‘Buy the L.A. Times, we will tell you what’s going on with the traffic and the schools and the cops and the local stuff, and if you want to know what’s going on in Iraq, go buy The New York Times,’ that doesn’t sound like a terribly sound business approach either. And if I were a Los Angelino, I would be a little insulted by that. Why are the two mutually exclusive?”

They are not mutually exclusive, and I am insulted. We can only hope that the views of investment bankers like Bobrinskoy are rejected for the low-brow, short-term stupidity they represent. His logic is flawed and dangerous and only accelerates the rapid concentration of media voices into small groups of powerful, multinational corporations whose loyalties are bound to owners and shareholders, rather than to consumers and citizens.