From the deck for David Olive's column in the Sunday Star: "Unprecedented ineptitude and complacency are leading America's paper of record into irrelevance."
Warning: It's mostly about the New York Times as a failing business.
The company's profits have plunged 31 per cent over the past five years, compared with a 13 per cent slide at the family-controlled Washington Post Co. since its peak profitability four years ago. Times Co. stock has collapsed to $19 from a 2002 high of $52. And the company's market capitalization of $7 billion six years ago has shrivelled to a current $2.8 billion – roughly equal to the latest quarterly profit reported last week by Murdoch's News Corp.
The managerial track record of the Sulzbergers, who control the Times Co. with super-voting stock, is abysmal. Rather than diversifying as rival publishers did, Times Co. doubled down with its purchase of the Boston Globe. A few years later, as newspaper valuations plummeted, the Times Co. was forced to write off almost half the $1 billion it spent on the Globe investment. Gannett Co. Inc., America's largest newspaper publisher, has 23 TV stations to cushion the blow of declining ad-revenue growth. And family owned Washington Post Co. subsidizes its flagship paper with cable-TV earnings and Kaplan Inc., a reliably profitable test-preparation outfit that accounts for 51 per cent of Post Co. revenues. The Times Co. is utterly dependent on newsprint, which accounts for 97 per cent of revenue. And the judgment of Arthur Sulzberger Jr. has been, to be polite, muddled (see "ALL" below right).
But changes are brewing. There is, as business people say, a lot of "low-hanging" fruit by which a Times Co. turnaround could be achieved with relative ease. Despite its woes, the Times managed an 8 per cent operating profit last year; but comparable metro dailies even in these tough times still boast margins of 13 per cent to 22 per cent. After the seating of the hedge-fund board members, the Times trimmed its newsroom staff by about 8 per cent.
Wall Street has long hoped the Times Co. would shed the Boston Globe. But that purchase is a legacy of Sulzberger's father, and likely won't happen while the latter is alive or the Sulzbergers still control the company. The agitators on the board won't long settle for foot-dragging, though. Rather than risk a messy proxy fight, the Sulzbergers will be forced to contemplate selling Times Co.'s dailies in Tuscaloosa and 13 other towns, its printing plants, its New York classical music station, WQXR-FM, its stakes in two Canadian paper mills, and such weeklies as the Petaluma (Calif.) Angus-Courier, circulation 7,321.
Given Sulzberger's track record, it would appear that only professional management at the top will save the Times from its gradual fade in relevance and more rapid decline in value, which has made Sulzberger family members several hundreds of millions of dollars poorer. Family members already are rumoured to want Sulzberger kicked upstairs to an honourary position so that a professional CEO can fend off Murdoch and achieve dominance as an online news purveyor.
Until a short few years ago, it was a given that family-controlled newspapers were the sole guardians of journalistic excellence. This turns out to be a canard. The Murdoch bid for Dow Jones unleashed stories from former Dow Jones executives about how abjectly managed that firm was under the Bancroft family, making Dow Jones vulnerable to takeover. A close inspection of the Times Co. shows a similar absence of long-term acumen. Which leaves the Grahams at the Washington Post Co., with the help of long-term minority owner Warren Buffett, as the exception to the new rule that family control is a match for chain ownership in leading a newspaper enterprise to ruin.
Now, onto the newsroom.
As Oliver notes in a sidebar, Arthur Sulzburger hired Howell Raines as his executive editor, and Raines begat Jayson Blair.
Raines also begat Judith Miller, the WMD queen.
Sez Olive:
Judith Miller, whose unsubstantiated reports of Saddam Hussein's weapons of mass destruction were front-paged in the weeks before Congress authorized U.S. President George W. Bush to take America to war against Iraq, was a Sulzberger favourite to whom he bound himself very publicly until his own paper acknowledged to its readers, at exhaustive length in 2004, Miller's role in the Times' failed coverage in the lead-up to the war – "especially on the issue of Iraq's weapons of mass destruction and possible Iraqi connections to international terrorists."
Olive also took the following shot:
Furthering the erosion of the Times brand was Sulzberger's recruitment earlier this year of William Kristol as an op-ed contributor. Putting aside that neo-con, Iraq-war cheerleader Kristol is a discredited polemicist, he's ubiquitous, undermining the exclusivity of the Times franchise.
Olive didn't think the NYT distinguished itself with its Iraq war coverage, mishandled the John McCain/affair/lobbyist story, and wastes too much space on soft features.
On Bill Keller, Raines' replacement, he cited a May 2008 Vanity Fair article on the NYT:
In his examination of the Times Co.'s inner workings in the latest Vanity Fair, media critic Michael Wolff says Keller, the son a former Chevron Corp. CEO, "has never seemed to quite have his heart in it – his has been a soft, hesitant, often odd, seldom necessary New York Times."
Actually, the VF piece seems to have gone a fair distance in informing Olive's opinion on this issue.