Kochs Following Bezos, Buffett Show Print Media’s Lasting AppealBy
Activist billionaires may join Bezos as latest print saviors
Their conservatism raises concerns about possible influence
The disclosure that conservative activists Charles and David Koch are behind Meredith Corp.’s latest bid to buy Time Inc. may have sent chills down the spines of liberals. But it may be a good sign for the ailing print media industry.
“There’s little evidence of billionaires who are willing to continually pour money into money-losing operations,” said David Chavern, president of the News Media Alliance, an advocacy group for the industry. “These are really smart business people. They see a commercial opportunity.”
The Kochs’ involvement in Meredith’s bid for the parent company of Sports Illustrated and People magazines marks the latest example of wealthy benefactors opening their checkbooks to rescue a media outlet. Amazon.com Inc. founder Jeff Bezos has reinvigorated the Washington Post, which has hired dozens of journalists since he bought the paper and was profitable at the end of last year. Boston Red Sox owner John Henry has provided a sense of optimism and financial support to the Boston Globe.
The Kochs have tentatively agreed to support Meredith’s offer with an equity injection of more than $500 million, according to a person familiar with the matter. A spokesman for their company, Koch Industries, didn’t respond to a request for comment.
Publishers may have few options other than turning to wealthy benefactors like the Kochs. Print advertising and circulation dollars are steadily declining and online advertising, dominated by Google and Facebook, has largely failed to make up the difference. Ads in U.S. newspapers fell 75 percent to $12.4 billion in 2016 from a peak of $49 billion in 2005, according to Magna Global. Time Inc.’s revenue has declined every year since 2011.
This new crop of media moguls hasn’t always been a panacea, however. Casino magnate Sheldon Adelson has been criticized by the staff of the Las Vegas Review-Journal for meddling in their reporting after he bought the paper two years ago. Some have quit in protest. Earlier this month, Joe Ricketts, a Republican donor who founded the online brokerage TD Ameritrade, shut down web-based news outlets DNAInfo and Gothamist with little notice in what some viewed as retaliation for the staff unionizing. Ricketts said their business models couldn’t support the journalism they produced.
Tronc, owner of the Chicago Tribune and Los Angeles Times, has its own troubled history with billionaire owners. The company emerged from bankruptcy five years ago after a doomed leveraged buyout orchestrated by Sam Zell, a real-estate developer, just before a global recession and a slump in print advertising devastated the industry.
“It really cuts both ways,” said Alan Mutter, a publishing industry analyst. “I’d rather these publications endure. On the other hand, you have to be concerned when media companies are owned by partisan groups or operated to advance the causes of their owners instead of serving a public trust of reporting without fear or favor.”
Koch Industries is a Wichita, Kansas-based conglomerate with businesses ranging from oil and ranching to farming and electrical component manufacturing. The billionaire brothers are known for their political activism, having spent decades building a network of wealthy political donors who pledge money to conservative causes.
A deal involving the Kochs would likely raise questions about political influence on the news media, especially at a revered publication like Time magazine, founded in 1923 and originally run by Henry Luce.
“Will the Kochs suddenly tweak Time magazine to support their causes?” Mutter asked. “Will they try to make it more partisan? That is one of the things that can happen when very wealthy individuals get control of media companies.”
In the past, the Koch brothers have reportedly told confidantes they don’t think conservative voices are well-represented in the media. And in recent years, they’ve shown interest in financially supporting media operations. In 2013, Koch Industries explored a bid to buy Tribune Co., the predecessor to Tronc. Koch Industries has also sponsored “Marketplace,” a business radio show on NPR, and David Koch was one of the backers of Ken Burns’ new Vietnam War documentary for PBS.
There’s a long history of wealthy patrons controlling the country’s newspapers and magazines, dating back to the days of William Randolph Hearst. Berkshire Hathaway Inc. Chairman Warren Buffett owns dozens of local newspapers. Former New York Mayor Michael Bloomberg owns Bloomberg LP, the parent company of Bloomberg News and Businessweek magazine.
The super-wealthy have various motives for owning media properties. A few decades ago, they bought magazines and newspapers simply because they were very profitable.
“Now they buy them for influence,” Mutter said, though he noted that’s diminished, too. “Some use them to help their friends and punish their enemies.”
— With assistance by Devin Banerjee, and John McCormick