Saturday, January 14, 2006

OWNERSHIP: Graham, Sulzberger, Singleton talk to CJR about whether taking newspapers private would improve journalism


SUMMARY BY PAIDCONTENT.ORG, posted Jan. 12, 2006:

Graham, Sulzberger: Taking Newspapers Private Isn't The Solution [by
staci] : We've talked about this before -- newspapers may be the highest
profit-margin, continuously successful companies to come under fire in a
marketplace that rates growth ahead of consistency. The potential (is it
time to say probable?) sale of Knight Ridder and the active interest of
multiple private equity firms -- brings the questions of why and what can
be done to the forefront Douglas McCollam does a very good job exploring
the conundrum in this month's CJR. Would going private be a solution? No,
say the heads of two major companies: Donald Graham, chairman and largest
individual shareholder of the Washington Post Company, and Arthur
Sulzberger, Jr., chairman of The New York Times Company.
-- Sulzberger: "There is a real value to companies not being artificially
isolated from the demands of the market. ... It enforces a certain kind of
-- Graham: ".Public ownership has been great for us. ... Our focus is not
on the stock price, but on the value of the company."
But Media News' Dean Singleton and others see private equity and
newspapers as a possible good fit. "Increasingly you are seeing private
equity firms buying companies as opposed to other companies buying
companies. There is a lot of money in the pipeline from pension funds,
boomer 401(k)s, insurance companies. There is more money than the stock
market can absorb." Match that with newspapers' high cash flow and you get
at least part of the picture. But Veronis Suhler's James Robertson warns
that it will work only if investors are realistic about the value of
editorial and its role in the financial equation. McCollam's conclusion:
"So while there is no guarantee that the private ownership of today would
recognize the value of journalism, it has already been established that
Wall Street does not. Maybe it.s time we took our chances."
MKTW (req. reg.): Thomas Kostigen also explores the subject of why
investors diss newspapers but from a different perspective. "If you look
at newspapers the old way and forecast, you.ll face a grim outlook. But
look at the industry another way and newspapers may be worth buying.
Knight Ridder is certainly opening people.s eyes." [by staci] [Jan.12, 06]

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