The 'Rich Guy Play Toy' Future of Newspapers
Media General is a chain of small-ish newspapers across America. Not a particularly prestigious or savvy chain of newspapers, and the company's value has been nosediving off a cliff for the past five years along with most of the rest of the newspaper industry. But! Media General has now been purchased by Mr. Warren Buffett. And just like that, this mediocre little newspaper chain becomes the embodiment of the industry's future.
With the rise of the internet and the crumbling of the newspaper industry over the past decade-plus, most of the attention has been on the success or horror stories of the prestige properties: the decimation of the Tribune Co's once-proud titles, the utter economic destruction that's laid waste to the Pulitzer-harvesting newsrooms of many big city papers, the New York Times' hit-and-miss efforts to adapt and thrive. The extreme other end of the spectrum—small-town papers with little competition online or off—were fairly insulated from the economic pressures that afflicted their larger brethren. But what about the mid-range? These papers (like the ones owned by Media General)—not small enough to duck the consequences, but not big enough to grab the interest of media reporters—have been suffering in silence.
Until now. With this Warren Buffett purchase, the boring mid-range of the newspaper industry has been shown its road to salvation. Because whereas it's always been known implicitly that no matter how dire the economic straits of the New York Times or the Washington Post became, there would always be some superrich savior out there willing to step in and save them for the social and political prestige alone, less glamorous papers have never had such an assurance. But now a whole new world of possibility is opening up. There are only so many struggling newspaper chains of reasonable size out there, meaning that they have a certain scarcity that can be attractive to the ultrarich. Their price is piddling, compared to their potential influence. It's no longer just the big papers that can envision a safe, comfortable future in the welcoming arms of a rich savior who's willing to write off their steady losses (and, crucially, to abandon the old illusion of turning papers into profit centers that afflicts the immediate past generation of newspaper buyers) in exchange for the validation of being a real live mogul. Instead of the LA Times, why can't Eli Broad buy, say, Lee Enterprises? These middling chains are omnipresent in real America. Forget coastal elitism. Forget internet futurism. The smart, struggling newspaper chain of today will market itself as a patriotic slice of Americana that can't be found elsewhere.
Newspapers are cheaper than private jets.
[Photo: AP]