A Lamentation on the Media--Part II

The village idiots buy a printing press and a camera--Whatever the values the stock market and public companies provide the economy of this country, they have become the enemy of good journalism. Wall Street a generation ago stopped being a place where people invested in the economy and became Las Vegas East, the place you went to gamble. The gamblers on Wall Street just dress better. The gamblers--or investors as they like to call themselves--want instant gratification. They want to know what every company thinks it is going to do quarter by quarter. If quarterly earnings of a company do not meet expectations, the price of the stock goes down, never mind if the expectations were wrong. If quarterly income does not grow, the price of the stock goes down. If the price of the stock goes down, the board of trustees of that company are under great pressure to do something quickly.

The days of grey-haired old ladies making blue chip investments for the future are long gone. Now they are replaced by sleek men and women in Prada and Gucci who stare at computer screens and adjust investments by the second based on what they think the other people in Prada and Gucci are doing at that moment. They have created their own reality, totally separate from the one the rest of us live in. The market is often run by stock analysts who--you will have to trust me on this--have absolutely no idea what they are talking about. When I was the science writer in the public relations office at Stanford University I would run a stupid-question-of-the-week contest. There was no prize given, just snide comments. Invariably, they came from stock analysts. And industry analysts were only slightly more informed. Thomas Carlysle called economics the "dismal science." He was half right.

In broadcasting, Paley, Sarnoff and Goldenson got old and died. When Paley could not bring himself to name a successor--and hoping to avoid a takeover by a conglomerate--he sold CBS to Leonard Tisch, one of the great bottom feeders of Wall Street. Tisch did not see CBS News as a debt he owed society. He saw it as a money sink. It had all those people and all those bureaus living on expense accounts. Some operations, such as London, were huge. Tisch pulled the plug, driving down costs and driving up the value of his stock. Having milked it for what profit he could gain--lots, by the way, some $2 billion--he sold it to Viacom, a conglomerate that also ran movie studios and had no tradition in journalism.

NBC was sold to General Electric, one of the best and tightest run companies in America. They took their culture into Rockefeller Center and burned and slashed. ABC went to an upstart newspaper chain called Cap Cities, a totally incompetent operation that soon merged with Walt Disney Co.

Newspapers went through the same thing. In some cases, families that operated the newspapers or the chains, multiplied exponentially as each generation grew up. Eventually, most of the stock holders found their holdings diluted, had no interest in the newspaper business, and cashed in at the first opportunity. That's what happened to the de Young family in San Francisco who owned the San Francisco Chronicle. It's what eventually happened to the Bancrofts, who sold the Wall Street Journal to--gasp--Murdoch. Some of the families were dysfunctional and sold because they couldn't stand each other. That's what happened to the Binghams in Louisville . The Courier-Journal was sold to Gannett, death to any quality newspaper. Then there is Shurkin's Law of Genetic Regression: any family-owned company will eventually pass to a mediocrity by the third generation. That's what happened to the Mercury News and the Ridder family. (We worry about the Sulzbergers, now in the fourth generation. The Grahams are on the fourth generation, now run by the great granddaughter of the original owner and she is doing splendidly.)

The network news operations, once the prime source for news in America, have lost a million viewers a year for the last 25 years. Newspaper circulation has been shrinking for the last 20 years, and those in the media are stumped in trying to figure out what the Internet and the new media will bring.

Then there is technology. One of the staples of the electronic world is Moore’s Law, coined by Gordon Moore, one of the inventors of the microprocessor. Moore said that the contents of a microprocessor double every 18 months. The analog to that is that electronic capabilities change every 18 months and so too the businesses based on that technology. No one can predict what will happen two years from now and a lot of smart people have gone bust betting one way or the other. The people running the media have no clue what to do or where it is all heading--and neither do I.

There have been several results of all this. International coverage is practically non-existent in America and the quality of journalism--both print--and broadcast has deteriorated dramatically.

In the case of foreign coverage, I have mentioned the newspapers that have closed bureaus. Most newspapers run very few foreign stories. They have been told by consultants that Americans are not interested and the only way to survive in the news business is to go "local, local, local." There is not a shred of evidence to support that notion, which goes back at least 30 years. Would you like the names of newspapers that tried it and no longer exist? Start with the Philadelphia Bulletin, once one of America’s great newspapers and the largest afternoon paper in the country. It listened to a consultant and was out of business in 18 months. Even the Times and the Post have reduced the number of their foreign bureaus. Only four newspapers have foreign desks. The networks are worse. They have closed half their foreign bureaus and now buy most of their visuals from outside sources over which they have no control and have no ability to monitor for accuracy or bias. Someone sits in London and narrates the video from somewhere else. It's called “packaging” and you can tell it's happening when the narration signs off with a dateline that doesn't match the locale--as in a story about a railroad strike in France narrated by a guy in London. Virtually the entire southern hemisphere goes unreported. Whole continents. There is not a single American reporter in the second largest city in the world--Sao Paolo, Brazil, and very few in the largest, Seoul, or the third largest, Mumbai. Oh, and by the way, did you know there is a country between Alaska and the Lower Forty Eight? Not one single American newspaper or network has a resident reporter in Canada. The Washington Post pulled out last year.

This gives rise to what is known as parachute journalism. Something happens in the world and you immediately dispatch a reporter from somewhere else. He or she lands at the scene--that's the parachute part--and within hours is sending back stories based on what can only be superficial and incomplete information. They have no sources. They have to rely on not necessarily-reliable locals. They don’t speak the language and they only show up when something happens. You never hear about anything before it happen, one of the criteria of quality journalism. Compare this to a resident reporter who speaks the language, has the background and the sources. Who are you going to trust? Who is cheaper?

How much of the shock and amazement that followed 9-11 was the result of the ignorance of what was going on in the rest of the world, fostered by the inattention of the corporate-owned media?

Another effect is that most of the American media is now controlled by half a dozen companies. This can have dramatic effects.

In January 2002, a train carrying toxic materials, went off the rails in Minot, North Dakota. There were six commercial radio stations in Minot and one was designated as the emergency carrier, the one the police call when they need to warn people of things like--well, toxic spills from train wrecks. Small problem. All six stations in Minot were owned by the same company, Clear Channel, and no one answered the phone when police called. Like most Clear Channel stations, the station is actually a robot. The music and the announcers were someplace else--probably Los Angeles--and the operation was totally automated. The warning never went out. Clear Channel, incidentally, insists there was someone manning the stations, but he was busy. One person died.

It wasn't just the emergency warning. All six of the Minot commercial stations share exactly one reporter who does all the news the six stations run. His appearance at a story is so rare other reporters once gave him a standing ovation when he showed up.

This would have been impossible under the old federal rules, but beginning with the Reagan administration, those rules were changed. Now, one company can own all the stations in town. Deregulation. Capitalism.

The best way to describe what has happened to newspapers is to describe the story of my old paper, the Philadelphia Inquirer and the people who ran the place.
The Inquirer is the third oldest newspaper in America, founded in 1829. It had various owners until the Annenberg family sold it to Knight Newspapers in 1969. The Knights, John and James, were newspaper people of the first order who ran fine regional newspapers in Akron, Miami, Detroit and Charlotte. They brought in a man named John McMullan to clear out the Annenberg stench. When I went for a job interview with McMullan, I had to walk through a picket line of Philadelphia police who were protesting a series on police corruption. The reporter who did the story had been sent secretly to California to protect his life. McMullan started the interview by telling me how many libel suits he had already collected. (He won all but one, by the way.) How could I resist? In 1972, the Knights brought in Eugene Roberts (left), an editor of the New York Times, as executive editor. They decided they need a national flagship and Robert's mandate was to build a great newspaper no matter what it cost. He did. Eighteen Pulitzer Prizes in 15 years. Every April we just routinely ordered champaign. And that was only one prize. We won everything that moved. I almost retired the space writers award.

The Inky--probably the last great newspaper to grow in America--was the best newspaper in the country on any given day. It hired the cream of the crop from the best journalism schools and raided newspapers from around the country, including the photo editor of the Los Angeles Times, who brought half his staff (mostly talented, beautiful young women) to Philadelphia with him. Besides the bureaus Roberts opened, we were gloriously staffed. We had an architect writer--a man with a degree in architecture from Yale. We had two film critics and two music writers--including one full time classical music writer who was himself a concert pianist. We had a full-color Sunday magazine with a staff of three, a full-time book editor with his own section. I had an extensive travel budget. I went to the Antarctic. Two series I did morphed into books. One of them, on the eradication of smallpox, took me to India for several weeks where I worked alongside vaccinators in the villages of Uttar Pradesh--and to Somalia to interview the last smallpox victim. In between, I stopped in Egypt to do a Sunday magazine piece on a University of Pennsylvania archeology dig in Karnak. Hey, local story! We were criticized for covering Pakistan better than we covered Upper Darby and that was true, but people read us.

While bigger papers had bigger staffs, we sometimes had the best people. When Israel invaded Lebanon in 1978, the New York Times had a dozen people on the scene. But we had Richard Ben Cramer. Guess who won the Pulitzer for covering the war. Our reporter in LA, Murray Dubin, wrote the funniest, most perceptive pieces about that city this side of Joan Didion. We had Steve Seplow in Moscow, Jane Eisen in London, Larry Eichel in Rome, and Rod Nordland in Bankgok. Our forte was investigative reporting and had half a dozen full-time investigative journalists, including the team of Don Barlett and James Steele, arguably the best investigative reporters of the 20th century. They would produce a series, oh every other year or so. Two Pulitzers. It was a glorious ride. And it was profitable. Sunday circulation was more than a million, the third largest in the country. Daily circulation was three-quarters of a million and with all the perceived luxuries, the paper never lost money. Profit margins were in the low teens. It drove the competition, the Philadelphia Bulletin, out of business.

Five years after buying the Inquirer, Knight Newspapers merged with Ridder Publications and the Ridder family gained control. The law of biological regression to the mean was working and the third generation was in charge. And Wall Street was now operating in the new model. The accountants in Miami, corporate headquarters, insisted that Roberts was spending too much money and needed to work with a smaller budget. He made cuts. They were not satisfied and kept pressing him for more cuts. He eventually spent more of his time fighting with corporate managers over budgets than running the newspaper. They tried to force him to expand into the suburbs and leave the rest of the world to the big guys. He quit, unwilling to cope.
The accountants began emasculating the paper as he walked out the door.

By then, most of us had left, sure we knew the end was coming. Two departures are interesting. John Carroll, one of the managing editors, was eventually hired by the Times-Mirror Co., the owner of the LA Times, to run the Baltimore Sun, which it now owned. He was eventually promoted to vice president and went to LA to run the Times. In 2000, the Times Mirror Co. was bought by the Tribune Co., owners of the Chicago Tribune, and Carroll began to suffer the same fate as Gene Roberts, insistence that he cut the seemingly bloated budget at the Times. He cut where he could. They kept coming back for more. He cut more but began to feel that the cuts were approaching the point where the Times could no longer maintain its high quality. Finally, he quit, refusing to cut any more. He was replaced by Dean Baquet who would eventually quit the Times for the same reason. So did his successor. (I might add that the editor of Knight-Ridder’s Mercury-News quit as well because of budget cutbacks he opposed.)

When he went to Baltimore, Carroll brought with him a reporter and editor from the Inquirer, Bill Marimow, a two-time Pulitzer winner. When Carroll went to Los Angeles, Marimow took over the Sun. In a few years, he too began to feel the pressure from the Chicago executives. One day he refused to make any more cuts on grounds the quality of the paper would be permanently damaged and was fired.

Their stock was tanking and Wall Street investors, many of them fund managers, insisted on extreme cost cutting and higher profit margins to goose the stock. When Carroll quit the LA Times, the paper was earning 22% on investment, an astonishing figure. But the price of the stock just wasn't high enough to suit Wall Street. The Sun also was earning a substantial profits when Marimow was fired. During the battle at the LA Times, Frontline, the PBS program, interviewed one of the fund managers pressuring the Tribune to cut costs. He objected to the fact the Times was still manning a dozen foreign bureaus. Why bother? he asked. They are expensive. Why should the Los Angeles Times be a national newspaper? People in LA can get the Wall Street Journal or the New York Times if they wanted foreign news. So, as far as he was concerned, the people in the second largest city in America should rely on New York newspapers for their foreign news so he could make another buck.

Oh, and Knight Ridder. It no longer exists. A fund manager pressured the CEO, Tony Ridder (known as Darth Vader in his newsrooms) to sell, and rather than resist or fight back, he did. The papers went to McClatchy, who sold off the ones with union contracts. The Philadelphia Inquirer is now locally owned, locally centered, and the editor is--tah day--Bill Marimow. Circulation is a fraction of its former self and reporters are lucky to cross the Delaware River to do a story.

The Mercury-News now is owned by Dean Singleton, who owns all the newspapers around San Francisco. He has cut the staff in half and is out-sourcing his copy desk to a facility across the Bay, absolutely guaranteeing that the paper will print mistakes. There is no good reason to read the Mercury-News and the people are reacting accordingly.

But the Tribune Co. still could not satisfy the fund managers and finally sold out to a real estate developer named Sam Zell with no knowledge of journalism. Zell acquired huge debt with his purchase. When last heard from Zell was telling his large Washington bureau it was too large and no one really wants to read all that foreign crap.

I think it is fair to say that all of the models of corporate ownership of the news media have failed, many of the companies involved no longer exist, and still we Americans remain among the most ignorant people in the world.

All this is muddled by the Internet and the inability of anyone to predict how the technology will play out or how to make money on it. But lost in the muddle is the quality of American journalism. Someone has to provide the content.

Faced with declining circulation and losing customers, Roberts once said, the geniuses who own newspaper companies got together and decided the answer was to give their customers less. I liken it to General Motors producing cars without back seats to save costs. Do they really teach that stuff in business school?

Next week: What can be done about it? Beats me.