Tech billionaires discover the enduring appeal of print
Billionaires are not always blessed with, or ruled by, financial savvy. They have been drawn repeatedly to a business with falling revenues and fading prospects, which is being pummelled by digital disruption.
Newspaper publishers have always come from diverse backgrounds. In the 19th century, William Randolph Hearst inherited the San Francisco Examiner from his father, who had made millions from the Gold Rush. The McCormicks who once owned the Chicago Tribune got rich from agriculture.
Today, an increasing number of owners hail from the tech industry. Over the past few years, new entrants include Jeff Bezos, founder and chief executive of Amazon, who bought The Washington Post for $250 million; biotech entrepreneur Patrick SoonShiong who purchased the Los Angeles Times and the San Diego Union-Tribune for $500 million; Jack Ma, founder of Chinese tech group Alibaba, who bought the South China Morning Post for $266 million; and, in July last year, Laurene Powell Jobs, the philanthropist and widow of Apple’s founder Steve Jobs, who took a majority stake in The Atlantic magazine.
This week, Marc Benioff became the latest wealthy individual to turn publisher, with his purchase of Time Magazine from Meredith Corp. for $190 million in cash.
But what is the appeal when the outlook for the industry is so bleak?
PwC forecasts print advertising revenue for newspapers will fall to $6.9 billion in the US by 2022, less than half the $17.6 billion they generated in 2013. The UK is expected to see a 60% drop in print ad revenue to $864 million and a 40% fall in circulation over the same period.
For these tech titans, the benefits of owning a print title as a standalone business is not immediately obvious; there are few economies of scale from which to make the cost savings needed to make these newspapers profitable.
Newsonomics media analyst Ken Doctor boils it down to a combination of three factors: “They believe they’re highly successful business people who can turn round a business others can’t, ego reinforcement and a larger belief in civic betterment.”
But he cautions: “The motive and mix for each entrepreneur differs. For the readers and the employees, it’s a game of billionaire bingo. Which billionaire do you happen to get?”