In this episode we discover the economics that drive the so-called ‘News Business’. Apparently up until 1968-69 the networks ran their news divisions in the public interest as dictated by the FCC. Everything changed when CBS with Don Hewitt at the helm created “60 Minutes”, which turned a profit for the news division. It was all downhill from there. Personally I kind of like ’60 Minutes’ as both an investigative news show and as entertainment. The proof that things had changed was when the Loews Corp knuckled under pressure from the ‘Cigarette Industry’ and buried the Jeffrey Weigand whistle-blowing expose on the research done on the effects of cigarettes and the correlation with cancer. I wrote once in an ironic way (probably ripped off of another article I read at the time) that this time Dan Rather’s vaunted eye of CBS blinked. That was proof that ’60 Minutes’ was not like other news programs. It had financial interests to protect.
And whither the old grey newspapers? When public ownership became all the rage and stockholders drove decisions at the newspapers, things took a turn for the worse. The financial obligation a publicly traded company has to its stockholders and the profit margins required outweigh any public interest the newspaper may serve. Knight-Ridder was profiled in its takeover of the L.A. Times and the what followed as the profit margin shot up to 20% year over year. Every quarter attempts were made to show stockholders that management was actively involved and that profits would stay high. Which requires constant publicly visible attempts to cut costs. This is the merry-go-round every company suffers from, and in the era before publicly traded Newspapers, was unnecessary. Families owned newspaper operations in the prior age, and didn’t require 20% profit margins year over year. And therefore, newspapers didn’t have to go through a quarterly charade of cutting costs to maintain profits and growth.
The measure of success for the public interest oriented newspapers and broadcasters are the St. Petersburg Times and National Public Radio. St. Pete is run as a non-profit trust and they are able to be profitable, but are not required to maintain year over year profits and growth in the range of 20% profit and 1% growth each year. As a result the St. Petersburg Times is the most popular newspaper in ALL of Florida, central and otherwise. The only thing I remember coming from the St. Petersburg Times is Dave Barry’s humor column. In retrospect, it makes sense that Barry would have found a comfortable home at this newspaper. The other measure of success is any news organization that is able to keep reporters permanently stationed in Baghdad since before the invasion began. As it stands today National Public Radio can count itself in the same league as N.Y.Times, AP, Reuters, etc. Very few organizations outside the newswires are able to bear the cost of reporting daily from Baghdad. And now NPR is counted as the most trusted broadcast news reporting organization in the U.S. with 26million listeners. Thank God someone is doing something right. Let’s hope private ownership and private trusts can reverse the trend of poorly managed publicly traded media companies.