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.

The fate of Knight Ridder

Please, God, don’t let anyone feel any sympathy for Tony Ridder, Knight-Ridder’s former chief executive officer. The demise of his company was written up in yesterday’s New York Times.

Perhaps it’s a shame that Tony lost his job, but keep in mind that he never winced once – well, maybe he did a few times – for the people whose jobs he eliminated or fired during his tenure running the company.

When he did eliminate jobs, he did it with the understanding that he was ridding Knight Ridder of people who had failed or were redundant. And so what happened to Mr. Ridder when he lost his company was nothing more than the business cycle getting even with him. Or, as the adage goes, what comes around goes around.

Where Mr. Ridder failed was capturing Wall Street’s imagination. Yes, Knight Ridder published fine newspapers and, yes, they even had Web sites. And, yes, Knight Ridder even owned a third of Career Builder. But so what said Wall Street. The only initiative the print editions had shown for the last five years was how small they could be.

He didn’t try anything dynamic with his print products. He simply managed them as a lean as possible so he could extract as many profits as possible. That, apparently, was supposed to keep Wall Street and his institutional investors happy.

Well, it didn’t. Knight Ridder’s single, largest shareholder was upset with the results, forcing the company to be sold to McClatchy. In other words, Tony was fired because Bruce Sherman, his largest shareholder, thought someone else could do a better job.

Besides being unemployed, Tony is counting his millions. The word was he grossed around $80 million as a result of the sale. What’s that after taxes and fees? $30 million? There are a number of people who’d sign up for that deal – lose the job but receive multiple millions as they walk out the door.

Had Tony tried something dynamic – like turn The Philadelphia Inquirer into a tabloid newspaper – he just might be sitting in his office today in San Jose, California. He could’ve killed off The Philadelphia Daily News and converted the highbrow Inquirer into a tabloid along the same lines as The Times of London.

Yes, it’s hard to say if this would have worked. But by doing something like this, he would have at least shown that he was prepared to take a risk in an attempt to make one of his finest print products healthy.

But he couldn’t be bothered. Instead, it was business as usual at Knight Ridder – sell ads, write stories, put things up on Web sites and, then, when the results he didn't like materialized, cut some more.

Tony, you earned your fate.