Jun
01
2006

'Wall Street Does Not Like Newspapers'

CounterSpin Interview with Ben Bagdikian

In the latest media concentration story, the McClatchy newspaper chain, which currently owns 12 dailies, is buying out the larger Knight Ridder chain and its 32 newspapers. McClatchy has announced that it will immediately resell 12 of the Knight Ridder dailies, including such venerated newspapers as the Philadelphia Inquirer and the San Jose Mercury News. For a look at what the McClatchy/Knight Ridder story means for journalism and the media business, CounterSpin turned to Ben Bagdikian, dean emeritus of the UC Berkeley School of Journalism and author of the landmark book The Media Monopoly, now in its seventh edition.

CounterSpin: What are your first thoughts about the McClatchy company buying Knight Ridder?

Ben Bagdikian: Generally, as these things go, it was less bad than it could have been, and I think that’s what we’ve had to settle for in not only all corporate affairs in the country, but especially when it comes to the media. There could have been greedier buyers, they were in the wings, but I’m disappointed that McClatchy, once having bought it, is going to sell off in bits and pieces some of the major papers, including some very important ones, and we don’t know yet who will buy those.

CS: Why do you say that it’s “less bad” than it could have been?

BB: Because a whole trend in newspapers and newspaper ownership has been negative for the last 30 years. Once the government made clear that it would not use anti-trust against newspapers except in rare instances, and once there had been the whole epidemic of deregulation which really said anything goes, there has been a deterioration of ownership qualities and an increase in the greedy expectation of profits on newspapers, and the spread of the myth that newspapers are not profitable.

And so Knight Ridder, of all the large groups, was the one that had been maintaining the best quality of journalism. The Philadelphia Inquirer, for example, 20 years ago, 30 years ago, produced some of the most important investigative reporting on the corporations that are changing the nature of America, and the greed that happened long before Enron, WorldCom and Tyco. The Miami Herald has been good in reporting on Latin America in more than just a jingoistic way. That’s why I say that it was a less bad acquisition when McClatchy bought it, because McClatchy had a reputation for maintaining a higher level of quality than most of the large groups.

CS: I think you’ve touched on this already, but for any faults it might have had, one of our concerns about the loss of Knight Ridder was the fact that its Washington bureau distinguished itself by asking hard questions in the run-up to the Iraq War; is that one of the concerns that you’re voicing here?

BB: That’s the kind of thing that one expected from the usual Knight Ridder operation, especially when the Knights were running it, before Tony Ridder took over. But yes, they had this tradition and it had a momentum that has been now lost, of course, as they break up the conglomerate.

And this comes from the fact that Wall Street does not like newspapers, because broadcasters make twice as much of a profit. While metropolitan newspapers 30 years ago considered 15 percent profit as the goal, it is now expected by the Wall Street analysts that a newspaper should make 25 percent. And most of them do make 25 percent. Well, that’s a handsome profit. There are enterprises in communities and states that weep in gratitude for that kind of profit margin, but the standards have become so extravagant that now if there’s a major stockholder, and Knight Ridder goes down (I think it went down to 19 percent), it was cause for breaking up the chain and selling off the papers.

So it’s been the combination of government deregulation, the loss of the progressive income tax, and therefore the sense, among corporations of any power, that anything goes, and that the only thing that counts is to make a quick, fast buck. If that means ending institutions, breaking them up, they don’t mind.

CS: That brings us to some other compelling local stories that are resulting from this sale. For instance, in the Twin Cities area, McClatchy now owns both the Minneapolis Star Tribune and the St. Paul Pioneer Press, while many there are worried about the future of the Pioneer Press, which I believe has posted a recent profit of just 10 percent. Can you comment on the impact that they could feel there?

BB: I think that what’s very important in every community is that they learn about what’s happening in their community, from their zoning board and their city councils and that kind of thing, which is what the voters need when they go to vote. But that’s considered things that can’t be put in a syndicate to go and be sold to other cities. So if you get St. Paul and Minneapolis, separate entities in as far as municipalities go, each has to have that kind of information; if you lose one of those papers, the voters in that community lose the information they need in getting the kind of schools they want when they go to vote. Getting the kind of zoning for the nature of their community when they go to vote.

And, really, no other medium fills that need. TV, of course, does very little on local reporting of any consequence other than murders and six-car crashes on the highway. The Internet can be pursued in depth by those who are interested in a particular subject, but the average person, the average American, depends on either a newspaper or TV for their news, and the newspaper is the most likely to tell what’s going on in the governing boards of that community.

CS: There is some indication that the Newspaper Guild may try to buy some or all of the 12 newspapers that McClatchy has announced it will be selling. What’s your reaction to that possibility?

BB: It has been the dream of the unions of the United States, in the 20th century and today, that they would have a national news outlet, because it would be the only way that they could get the news about unions and the need for the ordinary working people to have unions into the public discourse. They will not get it from the standard media, and they’ve had a dream of having their own outlet. I hope that materializes. It would be very tough; it takes a lot of money to put those together, and the unions have to achieve a kind of unity that they don’t have at the moment. But if it works, it would change the mix of news that the average American has available in the household.

Ben Bagdikian was interviewed by Steve Rendall and Peter Hart for the March 17, 2006 CounterSpin.

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