Bronstein and Blethen debate investor vs local newspaper ownership

by Joe Strupp, Editor and Publisher

A year ago, their companies settled one of the most bitter legal battles in newspapers when the JOA lawsuit between The Seattle Times and Hearst's Seattle Post-Intelligencer ended.

But today, Phil Bronstein, formerly top editor at Hearst's San Francisco Chronicle and Frank A. Blethen, president of The Seattle Times Company, took on a different debate: media consolidation.

During a panel discussion sponsored by the Columbia University Graduate School of Journalism, Blethen rallied against public ownership of newspapers, claiming the local publisher still offers a better approach to print news coverage. Bronstein urged that such stereotypes of corporate ownership be avoided.

Blethen even suggested financial incentives for newspapers that add staff or keep and expand newshole. "I could see subsidies where you craft something where you get tax credits for a variation of this," Blethen said after the event, noting similar incentives for farmers and other businesses. "A way to offer incentives to add staff. There is some baseline for all this in pubic service broadcast, some kind of incentive for owners who will be willing to make that investment."

During a discussion of the economic difficulties today's public companies are having, Belthen stated: "The question should really be not what is happening to the poor companies, it should be what public policy do we need - including subsidies - to ensure we have a variety of voices or a variety of models."

In the discussion, moderated by First Amendment lawyer Floyd Abrams, Blethen argued that the public ownership has proven a failure because shareholders want profits at the cost of quality, in many cases. "Wall Street can’t have it two ways," Blethen told the breakfast crowd of about 60 at Manhattan's Century Club. "Wall Street has spent 30 years milking the newspaper industry. The trade-off of that was lack of investment and lack of innovation."

He later added, "The notion of investor-owned, that is mutually exclusive with public purpose….If you live in a community, you are far more inclined to work to run your newspaper with some element of public good. I'd rather have a crummy paper owned locally than a supposedly good paper owned in absentia."

Bronstein, who recently stepped down as editor of the Chronicle to take a Post as a Hearst editor-at-large, disagreed. He said the approach toward newspaper ownership should not be limited to stereotypes.

"The real world is a more complex place," he said. "Whether it works or does not work is not based on a business model. In the real world, whether this is a bad thing or a good thing is based on the company -- is it a good company or a bad company?"

He also took issue with Blethen's "crummy" newspaper view, claiming "if the crummy paper is owned locally or owned nationally, it does not serve the public, it is a bad paper."

Bronstein also cited the financial support corporate owners can provide, such as with his paper's BALCO fight in which two reporters were facing jail time for refusing to reveal sources for documents that led to a steroid expose -- a legal battle that went on for years.

"If the San Francisco Chronicle had been locally owned, we might have been broke," he said about the legal costs involved. "Family-owned papers can be great papers, but depending on the commitment of the home office, a newspaper owned by someone who lives somewhere else can be a good newspaper."

When the issue of competition was raised, Blethen claimed that media consolidation limits the variety of news outlets, claiming online and other non-newspaper options that are growing are not the same as newspapers. "There really is a big difference in voice and substance and a difference in voice and content," he said about newspapers and other online outlets. "We need to realize that the vast preponderance of journalism today is still being done by print and some over the air."

Bronstein countered by noting some online outlets are doing solid journalism. He used as an example thesmokinggun.com, which recently exposed as fake some FBI documents cited by the Los Angeles Times in an attempted murder story.

"The Los Angeles Times did some bad, bad journalism," he said about the paper's March 17 story. "Smokinggun smoked them out. Now the Los Angeles Times is on its fifth or sixth apology."

Bronstein also mentioned the problem some journalists have of a "higher-calling disease," which he contends takes them out of both the financial realities of newspapering and out of digging into some stories. "There is the elite journalist and then there is the rest of us," he said. "The elite journalist misses 90% to 95% of journalism."

Also at the event was John G. Chachas, managing director and co-head of the Media and Digital practice for Lazard Freres & Co. He offered up data that suggests many newspapers are still profitable and the wave of public ownership in recent decades is ending, claiming the increase in private ownership will eventually be positive.

"The vast majority of publishers are, in fact, private," he said, citing MediaGeneral and E.W. Scripps among them. "These companies still generate a lot of cash flow. They just aren't really well-suited to be in the public market."

article originally published at http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=....

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