Philanthropicization?

By now everyone knows that newspaper subscriptions are plummeting. On Talk of The Nation today, media commentator David Folkenflik noted that the major papers (NYT, Boston Globe, LA Times) are losing paper subscribers but that overall readership (including web readers) are pretty much staying the same.

Those of us who read the news (online or on paper) also know that big buck individuals such as David Geffen and Eli Broad in LA and Jack Welch in Boston are each entertaining (word choice deliberate) purchasing their local rags (the Times and the Globe, respectively) to keep them available as public services.

The commentator on TOTN noted these purchases/purchasers might be seen as philanthropic. I find this definition a bit hard to swallow. Remember, the products of both of these companies (news) are still being consumed, just in a different format. The fact that the companies are struggling to figure out how to make the same 20% profit per annum on the new format is not a public problem. They will figure it out (no doubt, Geffen, Broad and Welch think they have the answers).

Regular readers of this blog (both of you) know that I 1) read 3 papers a day plus countless online news sources, 2) am a staunch supporter of free and independent media and 3) am tireless in noting how the relationships between public, private and independent sectors have changed. That does not mean I think those relationships are interchangeable.

The USA has pushed privatization of public goods pretty far (farther than I think we should have). In the case of newspapers, I agree they are a public good AND that their market-based independence is key to their being such.

This idea of purchasing private resources (papers) as philanthropic investments raises a new issue, call it "philanthropicization." If profit-making entities that serve the public, such as newspapers, can be purchased as "philanthropic" acts and thus provided tax exemption on future profits we will, at the very least, completely bankrupt the public coffers.

I think we can (and are) blend the sectors in new ways. However, there is a point of "too far."

2 comments:

Anonymous said...

You're spot on re the bandied-about 'philanthropicization' of newspapers. I don't see much good coming from them being run as 'nonprofits.' And, I think you suggest at the real problem: expectations.

Newspapers were, for a very long time, ATMs. But if you bought one 10 years ago expecting it to continue to return 20% margins a year indefinitely then when the margins dropped to 12% (or, whatever the actual number is), your problem isn't that 12% margins aren't a pretty good return, but that your expectations of the margins aren't being met. Grocery chains and car dealers would kill for 12% margins.

Anonymous said...

You're spot on re the bandied-about 'philanthropicization' of newspapers. I don't see much good coming from them being run as 'nonprofits.' And, I think you suggest at the real problem: expectations.

Newspapers were, for a very long time, ATMs. But if you bought one 10 years ago expecting it to continue to return 20% margins a year indefinitely then when the margins dropped to 12% (or, whatever the actual number is), your problem isn't that 12% margins aren't a pretty good return, but that your expectations of the margins aren't being met. Grocery chains and car dealers would kill for 12% margins.