Private newspapers

Diantha Parker Oct 27, 2006


KAI RYSSDAL:The news about newspapers has been all doom and gloom. Rising labor costs and more expensive newsprint. Falling circulations certainly haven’t helped. But some big US newspapers are still attracting interest.Because even for all the troubles they’re generally profitable things to own. Margins of 20 percent aren’t uncommon. Several bids are expected today for Chicago’s Tribune company, owner of the Chicago paper of the same name as well as the Los Angeles Times. Former General Electric CEO Jack Welch is said to be sniffing around the Boston Globe. And local owners have already bought up the Philadelphia Enquirer. But will they still be of value to readers when the deals get done? From Chicago, Diantha Parker reports.

DIANTHA PARKER:There’s a price for being a publicly-traded media company: the relentless quest for shareholder profits. One shareholder recently sued the Tribune Company after it rejected bids for its largest paper, the Los Angeles Times. It’s worth about $2 billion. The thought was, if you break up the company, the parts would be more profitable.

A rich private owner can shore up a paper. But these wannabe local newspaper barons may not value the quality of the journalism any more than previous owners.

TOM ROSENSTIEL:The closer analogy would be someone who owns a modern sports team who’s made their money somewhere else and is doing this as a second act in life.

That’s Tom Rosenstiel, who heads up The Project for Excellence in Journalism. He says it may not matter who controls papers.

ROSENSTIEL:The issue may not be which ownership model is better, but which owner views these news operations as emerging technologies.

Alex Ben Block is an entertainment industry expert. He says newspapers, if they stay strong, can serve as the backbone of innovation.

ALEX BEN BLOCK:Most of the internet is not about original news. It’s about news that’s been repurposed from places like the Chicago Tribune and the Los Angeles Times.. Nobody’s quite figured out how that’s going to work.

Until then, readers are still cleaning out newspaper vending boxes, at least here in the Tribune Company’s hometown.

In Chicago, I’m Diantha Parker for Marketplace.

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