Sulzberger Family Refuses to Relinquish Control of NYT
Apr 24, 2007 08:53 Filed in: Media
According to the NY Times, class A shareholders of
the newspaper--including some large institutional
investors--who elect 30 percent of the board want the
Sulzberger family, owners of non-traded class B
shares to give up some of their control over the
newspaper.
A Difficult Annual Times Meeting for Sulzbergers
It's hard to have much sympathy for the class A shareholders, however, since they bought their stock in the full knowledge that the Sulzbergers would be controlling the paper for the foreseeable future.
Considering the seemingly inexorable process of consolidation of the news media and the simultaneous dumbing down of the contents, it is hard not to conclude that the only way the press can fulfill its function as contemplated by the founding fathers is when it is owned privately. Only a private owner has the power to risk financial losses for actions grounded on principle that would otherwise be swiftly punished by shareholders. In the market economy, quality is a cost, not a benefit. A rational actor seeking to maximize returns on investment is looking for the sweet spot where marginal cost and marginal revenue intersect, which means that he will reduce quality (defined in the broadest sense) until such time as the savings are outweighed by a loss of revenue. If those curves intersect at a low quality, that's fine, because return is maximized. Gannett is a perfect example of this process.
Which is not to say that the New York Times is a sterling example of private ownership. The newspaper has time and time again betrayed the nation and its readers by printing shameless propaganda (as when Judith Miller became a mouthpiece for the Bush administration in favor of invading Iraq) or in suppressing vital news at the behest of the government, as when the newspaper waited a year before it revealed that the NSA was listening in on U. S. citizens in criminal violation of the Foreign Intelligence Surveillance Act of 1978.
In our own city, the Hederman family, former owners of the Clarion-Ledger, published a racist and reactionary newspaper that did incalculable damage to our state and its citizens for generations.
On the other hand, editors, publishers and owners have often risen to great challenges, fighting dangerous and unpopular battles against the rich and powerful, to the benefit of the entire nation. The Watergate scandal is only the most illustrious example of many truly heroic acts by American newsmen undertaken simply because it was what they were supposed to be doing. If you want to see what a newspaper can do, read the Autobiography of Lincoln Steffens, one of the original muckrakers around the turn of the 20th Century.
A Difficult Annual Times Meeting for Sulzbergers
It's hard to have much sympathy for the class A shareholders, however, since they bought their stock in the full knowledge that the Sulzbergers would be controlling the paper for the foreseeable future.
Considering the seemingly inexorable process of consolidation of the news media and the simultaneous dumbing down of the contents, it is hard not to conclude that the only way the press can fulfill its function as contemplated by the founding fathers is when it is owned privately. Only a private owner has the power to risk financial losses for actions grounded on principle that would otherwise be swiftly punished by shareholders. In the market economy, quality is a cost, not a benefit. A rational actor seeking to maximize returns on investment is looking for the sweet spot where marginal cost and marginal revenue intersect, which means that he will reduce quality (defined in the broadest sense) until such time as the savings are outweighed by a loss of revenue. If those curves intersect at a low quality, that's fine, because return is maximized. Gannett is a perfect example of this process.
Which is not to say that the New York Times is a sterling example of private ownership. The newspaper has time and time again betrayed the nation and its readers by printing shameless propaganda (as when Judith Miller became a mouthpiece for the Bush administration in favor of invading Iraq) or in suppressing vital news at the behest of the government, as when the newspaper waited a year before it revealed that the NSA was listening in on U. S. citizens in criminal violation of the Foreign Intelligence Surveillance Act of 1978.
In our own city, the Hederman family, former owners of the Clarion-Ledger, published a racist and reactionary newspaper that did incalculable damage to our state and its citizens for generations.
On the other hand, editors, publishers and owners have often risen to great challenges, fighting dangerous and unpopular battles against the rich and powerful, to the benefit of the entire nation. The Watergate scandal is only the most illustrious example of many truly heroic acts by American newsmen undertaken simply because it was what they were supposed to be doing. If you want to see what a newspaper can do, read the Autobiography of Lincoln Steffens, one of the original muckrakers around the turn of the 20th Century.
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