American journalism loses another family

By Susan E. Tifft

The influence a family owner can wield at a newspaper was powerfully on display last fall when Otis Chandler, retired publisher of the Los Angeles Times, broke years of silence to blast management for sanctioning the paper's involvement in an improper revenue-sharing scheme with the Staples Center sports arena. Demoralized reporters plastered photographs of the 72-year-old Times Mirror Co. scion on newsroom walls and bulletin boards as if he were a rock star. Time magazine neatly captured their relief in a story headlined: "Look Out, the Boss is Back."

The announcement [March 13] that Tribune Co. will acquire Times Mirror puts an end to the Chandlers' 118-year ownership of the L.A. Times. The deal gives the family four seats on an expanded 16-member board and 40 percent of the seats on the Times board, as well as a say in the selection of the paper's publisher. But these provisions will have little practical effect; they were included more to get around the Chandler family trust's restrictions on sale or merger than to ensure a family voice at the newspaper.

Why should we care if the merger sounds the death knell for yet another family media dynasty? Times Mirror stockholders are happy - the stock nearly tripled [on the day of the announcement] - and the deal makes strategic sense. But newspapers need leadership that looks beyond the bottom line. And family owners are more likely to provide that kind of leadership than are corporate behemoths obedient to the quarterly whip of Wall Street. Not guaranteed, certainly; there are newspapers everywhere whose owners squeeze their properties like lemons. But more likely.

Here's an example. In the months after the 1987 stock-market crash, newspapers around the country coped with the resulting advertising losses by slashing costs in order to keep earnings per share from collapsing. But at the New York Times, which suffered a catastrophic 40 percent drop in advertising, the massive news budget continued to increase year after year. Then-publisher Arthur Ochs "Punch" Sulzberger had shareholders to answer to, just as his counterparts at Gannett, Knight-Ridder and Tribune Co. did. But because the Sulzberger family owns a majority of the voting stock - as it has since 1896 - the publisher had the ability to take the long view. Plowing money back into the business made good sense, even at a moment of economic crisis, because the Times' success depended on its unrivaled reputation for journalistic excellence.

The flamboyant Col. Robert McCormick, publisher of the Chicago Tribune from 1914 until his death in 1955, also embraced this approach. With his virulent isolationism and shrill demagoguery, he was in many ways the embodiment of the worst in family ownership. Still, in those days the Tribune had a distinctive identify, something it sorely lacks today.

Family owners care about making profits and running well-managed companies. But quarterly earnings are not the only measure of their success. In Louisville, Ky., the Binghams, owners of the Courier-Journal & Times, made sure their paper was available across the state, even in the smallest hamlet. The move made little financial sense, but the family felt a commitment to the state. When Gannett Co. bought the paper in 1986, it ceased state-wide circulation.

Family ownership is particularly crucial when difficult journalistic decisions arise. In 1971, it was Punch Sulzberger's call to publish the Pentagon Papers, an act of journalistic courage that he admits was the toughest of his tenure. He decided in favor of publication despite lawyers' advice that the Times might be sued and driven into financial ruin and that he himself might go to jail. When after three installments, the Nixon Justice Department got a temporary restraining order to halt further publication, the Washington Post and the Boston Globe defiantly took up the struggle, publishing the documents until the government moved against them as it had against the Times. It is no coincidence that all three were family owned.

Despite the importance of family leadership to journalistic excellence, it is a form of ownership that is hard to preserve. Some media dynasties end, as did the Binghams', because of squabbling among the heirs. As families grow and disperse, they lose their sense of common purpose; a pile of cash and the freedom to pursue individual interests takes precedence over the psychic rewards of newspaper ownership. Indeed, few family businesses of any sort last beyond the grandchildren of the founder, a reality captured in a mantra I've heard many times at gatherings of family business owners: "The first generation enjoys, the second generation employs, and the third generation destroys."

Other media dynasties fall victim to inheritance-tax laws that make it difficult to pass media properties from one generation to the next without selling out to corporate buyers. And of course in a global economy, owning newspapers and only newspapers is no longer enough. To survive, a media company needs all the synergistic bells and whistles: broadcast stations, online capacity, vertical integration.

The press critic A.J. Liebling once wrote: "Freedom of the press is guaranteed only to those who own one." He worried about press barons like William Randolph Hearst and Joseph Pulitzer. Our chief worry now should be the disappearance of the responsible and enlightened families that took their place.

Susan E. Tifft is the Eugene C. Patterson Professor of the Practice of Public Policy and Journalism. She is the co-author of The Trust: The Private and Powerful Family Behind the New York Times (Little, Brown 1999), which was a finalist for the National Book Critics Circle award for best biography. (c) 2000. Reprinted with permission from the Wall Street Journal.