Rumble in the Media Jungle

Hostile takeovers, angry share holders, panicked whispers: these rumblings and more rolling through the big business media conglomerates, particularly the New York Times these days. Precipitated by dropping stock prices and declining advertising revenues, the New York Times it seems may be on the verge of a hostile takeover. Who knows what media or other transnational giant might be lurking in the shadows ready to seize this prime piece of New York real estate? And even more importantly, what might be their political orientation? Whatever the case the liberal bourgeoisie is clearly worried.

The culprit in this unfolding corporate monopolization mega-battle is a seemingly unlikely suspect: the Internet. Like all newspapers, confronted by the transition of news and revenue on-line, the New York Times is hemorrhaging. With an annual news room budget of $200 million, the Times is grappling with how to stay afloat, preserve the quality of news reporting, and satisfy investors in one fell swoop.

Writing on the huge challenge presented by the Internet, the Sunday's Times magazine's outgoing Public Editor, Byron Calame, comments that, "The challenges, which also face most other newspapers, are lagging advertising revenue and the transition to the Web."

He continues, Generating the revenue to pay for the news staff needed to maintain the Times' high quality is the most serious challenge. With advertising revenue from the print paper weakening in recent years, the hope was that growing revenue from advertising on the Web site would pick up the slack. Unfortunately, as The Times reported April 20 , the paper has "decided to reduce its 2007 guidance for Internet revenue growth, suggesting that the transition from a print advertising model may be a long time coming."

Faced by declining profits, shareholders are throwing a fit. Morgan Stanley has suggested as a remedy that the Times, eliminate its two-tier stock structure, that allows the Times owners, the Sulzberger family to own 70 percent of the stock, opening it up to outside buyers. Seems like a good idea? But wait! Donald Graham of Washington Post fame, writing in the Wall Street Journal, says it a horrible idea: to "support Morgan Stanley's campaign to eliminate that company's two-tiered stock structure is to run crazy risks with the future of its most important asset, the New York Times. Why? Because if the stock structure were eliminated, a line of buyers eager to purchase the company would form within minutes. No one could say no. The line would include private equity firms, high-ego billionaires, international media companies lacking a famous property and lots more."

Wow! Mr. Graham seems really upset. He continues: "Who would bid the highest? Perhaps a principled owner, dedicated to the welfare of the Times and the Boston Globe; willing to anger its friends on a regular basis, as good newspapers do; and prepared to spend money and run other risks to sustain the paper like the Sulzbergers. Or maybe the bidder would be someone quite different." I wonder who he might mean? Clearly, a real low life, someone down under and sleazy. What a terrible possibility! The tone reminds me of similar article on the business page of the Times about 20 years ago, when a certain wealthy Ohio family in the construction business, was attempting to buy a baseball team, but was turned down because they had "business interests in horse racing."

Whatever or whoever he may mean, the problems posed by the editors of the Post and New York Times are serious ones, brought on by Internet and the proliferation of news sources and reporting. Clearly one can't be indifferent to the prospects. No matter how onerous the Times is (and we got an idea how much so with their horrible coverage of communist achieves at the NYU library), far worse is possible. But being that we are unable in any way, shape or form to affect the outcome, the only thing left is ponder an interesting question: Could the Internet be the Achilles Heel, of the mega media giants? Are the countless Davids, blogging all over the world, beating the media Goliaths to punch, causing profits to plunge, shareholders to cringe, and empires to totter? Seems like something on this order is occurring. Bloggers of the world, unite!

--Joe Sims