The Price is the Message

If the medium is the message, as that late, great Canadian philosopher, Marshall McLuhan, asserted, then so is the price.

And the message also includes how the sale is handled. 

In fact, these two parts – the price and how the sale is managed – signal everything about the seller, from what they think of the new owner, as well as the other bidders, to how they view the property they’re selling, maybe even its customers.

And so in The Boston Globe’s sale to Red Sox owner John Henry, two conclusions can be drawn about Arthur Sulzberger, Jr. 

First, Arthur and his executives handled the sale poorly as it came to light that other bidders offered more for the paper than Henry’s winning bid of $70 million.

Of particular interest was a group in California, which also owns the San Diego Union-Tribune.  Word is they offered Arthur more for The Globe than anyone else.

While it's Arthur's prerogative to accept or reject offers, his approach to The Globe sale could place him in hot water should the company’s shareholders think he failed to maximize the newspaper’s value.

As Bloomberg News reported in June, Times executives were expecting bids in the $100 million range.  As Times executives were reviewing the bids, The Globe reported that Henry’s offer was among the lowest.

Meantime, the American Thinker reports John Lynch, the San Diego Union-Tribune’s chief executive officer, saying, "’We had the money in the bank, we had the highest price and we rolled over (Friday) and accepted all their (Times' executives) terms.’”

So why did Arthur reject the owners of the Union-Tribune?  Could it be because their politics lean right and he fears a right-wing Boston Globe editorial page?  Or did he just dismiss them out of hand because he knows Henry? 

Or was he looking to sell to someone whose knowledge of the newspaper business is minimal?Which, in the not too distant future, will make The Times’ ownership of The Globe look outstanding.

These questions may never be answered.

Of course, a price like $70 million for a property that should command so much more, makes me wonder if it's Arthur’s reflection on what he truly thinks of The Globe:  It’s a run-down property, with little to offer; at $70 million, it’s a cheap whore with lousy Johns.

One thing is certain:  Members of the Bancroft family, the former owners of Dow Jones and the storied Wall Street Journal, can hold their heads high:  They sold their company for premium to an executive who knows the ins and outs of the newspaper business. 

So much for the scion of the Great Gray Lady – he’s a weak executive who needs to be forced out.

U.S. Newspaper Executives are no match for the Koch Brothers

Sometimes it’s hard – really hard! – to take newspapers seriously.

I do when they’re covering wars, politics, crime and most business
events. 

But when it comes to covering their own kind – the newspaper industry
– their collective heads are stuck in their collective … well … I won’t say. 

This is a family-friendly blog, and you get the idea.

If the Koch Brothers – apparently prospective buyers of Tribune’s
newspapers, which includes the Los Angeles Times – read yesterday’s
New York Times, I hope they’re not shaking in their boots. 

More than 1,000 people, said The Times, “pledged to cancel their
subscriptions” and “110,000 (people) … signed petitions opposing
the sale” of the L.A. Times to David and Charles Koch.

Seriously, take it from me, compared to other previous, controversial
owners who successfully owned newspapers where they weren’t
 greeted with a parade and a red carpet on day one of their ownership,

1,000 or so readers is nothing.

Even if that number is way off – let’s triple it to 3,000 just to be, dare
I use the word, conservative – it’s still hardly anything to fear.

The L.A. Times, according to one of the most recent audits, sells nearly
1 million copies on Sunday and over 650,000 copies Monday
through Friday. 

Do the math, using the daily circulation figure, and you realize
we’re talking way less than 1 percent of the newspaper’s
circulation if those 1,000 readers follow up their threats.

Take it to 3,000 subscribers and the potential circulation loss is
just under half of 1 percent – far from an end-of-the-world-as
-we-know-it nightmare.

Nearly 30 years ago, in January 1984, Rupert Murdoch – you
know, the Devil himself, the man who, when he’s not running
his global media empire, is working hard to kill off democracy
his critics say – purchased the Chicago Sun-Times from Marshall
Field, taking a circulation hit of about 30,000.

Now if 30,000 subscribers abandon the L.A. Times – just over
4.5 percent of the paper’s Monday through Friday consumer
sales – then, yes, there’s reason to worry. 

But if the past is prologue, those readers will soon realize no one
else in Southern California is publishing a newspaper like the
Los Angeles Times, and they’ll return to the fold.

How do I know this?  My dad, Bob Page, was Murdoch’s
publisher at the Sun-Times.

“It took time but it all (the reader losses) came back,” dad says.

I’m not here to promote either Murdoch or a Koch Brothers
purchase of Tribune’s papers.

What I’m here to say is that L.A. Times columnist Steve
Lopez and some of his fellow reporters have little reason
to be upset about the prospect of a Koch Brothers ownership.

Sure there’ll be some changes if they wind up owning the
paper, but what Steve and his colleagues need to keep in
mind is that if that turns out to be the case, they’ll work to
make the Los Angeles Times a successful business. 

Say what you will about them – and I’ll even go along with Mr.
Lopez and say some of the critiques of the Kochs are worrisome
– the Koch Brothers are capitalists first, political partisans second.

It doesn’t do them any good to spend about $1 billion on
Tribune’s papers only to see them close up a year or two later.

Now if Steve and his colleagues want to argue against the
Koch Brothers because they don’t know a thing about running
a newspaper, that’s a different story.  I'm in complete
agreement with that line of thinking.

But instead of doing the obvious, Steve and his colleagues are
focusing on the Kochs’ politics, reasoning the banks and the lenders
– now Tribune Company’s owners – could care less about.

This harsh reaction against the Koch Brothers – solely because of
their politics – is similar to the one that greeted Rupert Murdoch as
he worked to buy Dow Jones and The Wall Street Journal.

Many in the media business, including the Financial Times’ Martin
Wolf, said it would be the end of the Journal, a completely
ridiculous thought. 

I exchanged emails with Wolf about his views, suggesting he explain
why the Bancrofts should be allowed to go on as the owners of Dow
Jones.  Even Mr. Wolf – a helluva reporter on everything but the
newspaper industry – thought the Bancrofts hadn’t done a very
good job owning the company.

(And, yes, in case you’re wondering, I still have the email from
Mr. Wolf as well as the one I sent him.)

The great tragedy of the newspaper industry is that its biggest players
are nowhere to be seen or heard of as interested parties in Tribune’s
papers.  Gannett, The Washington Post, The New York Times

Company, even Newhouse and Cox are missing in action.

Instead, according to what’s reported, Tribune’s board of directors
will receive two bids for their papers, one from Rupert Murdoch,
and another from the Koch Brothers, maybe three or four if David

Geffen and Eli Broad step up with their offers.

In other words, besides Murdoch, an Australian by birth and a
U.S. citizen since the ‘80s, no other U.S. newspaper executive is
demonstrating enough confidence in their industry – let alone their
management skills – to bid on the country’s fourth largest newspaper,
the Los Angeles Times, and its sister Tribune papers.

That should be the issue making Steve Lopez’s skin crawl.