Big changes are afoot in the newspaper industry, including new owners at The Boston Globe
and Washington Post
, raising hopes that new management and fresh ideas will help these
ailing newspapers turn the corner after years of declines.
But past experience suggests the odds are against a dramatic turnaround, as the new owners will face the same, inescapable trends
of declining print ad revenue and mediocre digital growth.
New leadership arrived at The Boston Globe
, where the new owner, John Henry Jr., a co-owner of the Boston Red Sox,
assumed the title of publisher and announced the appointment of Mike Sheehan, former CEO of Hill Holliday, as CEO. Henry purchased The Boston Globe
and the Worcester Telegram &
from The New York Times Co. in October of last year.
Not long after the deal was made public, Henry wrote a column setting out his vision for the Globe
describing his own early background in civic activism, Henry noted that the rise of digital publishing has presented the public with numerous new sources of information, but said there is a continued
need for journalists as trusted, impartial observers and analysts.
He promised the Globe
would be free from any partisan leanings, with balanced opinion columns representing both
liberal and conservative viewpoints.
On the business side, Henry hinted at a digital subscription strategy, with paywalls requiring frequent readers to pay for online access to the
Sheehan was optimistic about the prospects for advertising, stating: “More people read the quality journalism of The Boston Globe
ever before. Whether it is in print, online or on a phone, our journalism is everywhere. The opportunity for advertisers to reach a highly educated, civically engaged audience in the fifth wealthiest
DMA in the country is limitless.”
Separately, The Washington Post
, now owned by Amazon founder Jeff Bezos, announced plans to hire dozens of new reporters, including
five new political reporters, new photo editors, a breaking news desk, and data visualization specialists, among others.
The newspaper also plans to introduce a Sunday style and arts
section and a new Sunday magazine, reversing years of shrinkage, as sections were chopped to cut costs. With Bezos calling the shots, it’s no surprise the main focus will be on the
newspaper’s digital presence, although it’s not yet clear what the new strategy will look like.
Indeed, in both cases, the new owners have announced their intention to
make a mark and shake things up, but have offered few details about how they plan to salvage the publishing business model, badly damaged by the rocky transition from print to digital distribution.
The trend lines are all stacked against them.
Over the last decade, the New England Media Group at The New York Times Co., which included both the Globe
saw total revenues fall 44% from $700 million in 2004 to $395 million in 2012, and this decline continued in the first nine months of 2013, when total revenues fell 6.3% to $269 million. Over the same
period, The Washington Post
saw its newspaper revenues fall 39% from $957 million in 2005 to $582 million in 2012; in the first half of 2013 the newspaper division’s revenues fell 2% to
It may be worth noting that over the last decade, a number of wealthy owners have tried to revive ailing newspapers, usually meeting with little success. The purchase of
The Philadelphia Inquirer
and Philadelphia Daily News
by a group of investors in 2006 set the stage for bankruptcy and high-profile legal battles for control of the dwindling
company. In the latest development, earlier this month, one of the current owners, George Norcross, sued his co-owner Lewis Katz after the latter allegedly tried to initiate an auction of the
Similarly, Sam Zell’s plan to take the Tribune Co. private ended in debacle, with a tortuous four-year-long bankruptcy prolonged by various factions
battling for control of the company. After finally emerging from bankruptcy in December 2012, Tribune immediately revealed plans to dump its troubled newspapers, either through a sale or a spinoff --
settling on the latter course when no suitable offers were forthcoming. The spinoff is expected to be complete sometime this year.
On the other side of the ledger, Berkshire Hathaway
chairman Warren Buffett has expressed optimism about the future for newspaper publishing -- but it’s worth noting that he has confined his optimism, and acquisitions, to smaller metro dailies
and local papers serving mid-sized cities and towns. Berkshire conspicuously passed up chances to bid for bigger metro dailies like the Los Angeles Times
and Chicago Tribune