Changing of hands: newspaper ownership trends
Ever since Warren Buffett’s surprising purchase of the Omaha World-Herald at the end of last year, newspaper ownership trends have become an especially hot topic in the media world.
As the New York Times’ David Carr pointed out in an April story, we have increasingly seen wealthy individuals and big businesses purchasing large and mid-sized publications.
Much like Buffett’s World-Herald purchase, wealthy hotelier Douglas F. Manchester’s acquisition of the San Diego Union Tribune – now called U-T San Diego – also made headlines at the end of 2011. This past spring saw big buys too, with three local businessmen taking over ownership of the Philadelphia Inquirer and the Philadelphia Daily News.
But these companies aren’t just purchasing well-known titles. Buffett’s company, Berkshire Hathaway made plans in May to acquire 63 newspapers from Media General Inc., which included small weeklies such as the Madison Eagle, a Virginia-based newspaper with a circulation of 4,350. The following month, Berkshire Hathaway bought the Texas daily, the Bryan-College Station Eagle. The paper has a circulation of just 22,685.
Andrew Beaujon, senior online reporter at the Poynter Institute, said wealthy companies’ motivation for buying both big and small publications is influenced by various factors. “The money on those properties has been lost by other people; most are available for far, far less than they would have cost five years ago,” Beaujon said in an email interview. “Also, they frequently have attractive real estate holdings. BH refinanced Media General’s debt, too, in exchange for a share of the company, which has a television business with a lot of upside. But it’s important to note that Buffett thinks those papers can make money … if they focus on their community, maintain their relationships with local advertisers and put up paywalls.”
While it may seem like ownership trends are leaning toward major companies, there are some cases that prove otherwise. In June, it was reported that 10/13 Communications, which owns four small newspapers in Arizona, purchased 26 Houston Community Newspaper publications.
Additionally, big businesses haven’t just been buying newspapers. Some have been forced to get rid of them. Former media giant, Freedom Communications recently spent months selling off all its newspapers to various buyers, some of which, as Beaujon noted, are smaller operations. The company’s publications ranged from big and mid-sized dailies such as the Orange County Register to small weekly papers like the 4,500-circulation Crestview News Bulletin in Florida.
In many previous cases, new ownership has led to paper consolidations, foldings and staff changes. However, Beaujon hasn’t seen these trends with newly-purchased publications. “Where I’ve noticed layoffs is more at the companies that haven’t sold papers – often they’re struggling with huge costs, greatly reduced revenues and debt,” he said.
As for the overall effect these ownership changes have had on the industry, Beaujon explained we can’t know for sure but so far it’s positive. “I don’t know if we’ve seen enough changes in ownership to draw any conclusions about the whole industry,” he said. “It’s heartening to see people buying papers thinking they can make money and also seeing people buy them because they think it’s important that they continue to exist.”
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