The media’s fascination with the outside owner of tronc continues; Gawker bids due today
Morning Brief: The NYT is the latest to want to try and understand what is Michael Ferro’s motivation for entering the newspaper business, each profile unable to quite nail it down
The new chairman of tronc, formerly Tribune Publishing, continues to fascinate the media. The New York Times published a profile today of Michael Ferro but was not able to interview him, not the first time a news outlet has profiled the 50 year old entrepreneur without be able to speak to the man himself.
The NYT calls Ferro a tech mogul, which is an odd title to give a man who owns a large stake in a newspaper company, but long ago sold his interest in a tech start-up. The article reads as if it were notes intended for research, rehashing what is already widely known and Ferro. If anything new came out of the article, written by Leslie Picker and Sydney Ember, it is that Ferro may have suggested that the editorial staff of his papers investigate a troublesome shareholder, Oaktree Capital Management. But no article has yet to appear so the charge seems pretty flimsy.
Why the fascination with Ferro and tronc? Certainly one reason is that Ferro is an outside to the industry. Ferro’s only experience in the industry has been his involvement with Wrapports (another company with a silly name), the owner of the Chicago Sun-Times. That went nowhere and this might have been Ferro’s only brush with the industry had Tribune Publishing not needed a cash infusion in order to pay for the San Diego Union-Tribune and bid on the Orange County Register. In the end, getting Ferro’s investment cost CEO Jack Griffin his job and did not result in winning the Register thanks to the intervention of the Department of Justice.
Griffen was himself an outside of the newspaper business, but not publishing. He had worked at Condé Nast before becoming the president of the magazine division at Meredith. After seven years there was named CEO at Time Inc, but was gone after a year. Griffin was a New Yorker trying to run a Chicago-based newspaper chain, one created through the spin off that split up The Tribune Company into separate broadcast and newspaper companies – a cynical move only made to enrich the executives involved. It saddled Tribune Publishing with debt, though that never stopped an ambitious company from adding more.
What those on the outside of Chicago rarely can get their heads around is that someone from outside of the newspaper business might want to own papers and still have little interest in the newspaper themselves. But quite a number of major metro papers have changed hands in the past few years, with the new owners less interested in the newspaper business than in the influence gained by ownership. Doug Manchester, a real estate developer bought the San Diego Union-Tribune then discovered that newspaper ownership was overrated and sold to Tribune. Jeff Bezos, of course, bought and still owns The Washington Post.
That Ferro does not bleed newspaper ink when cut probably rankles some in the industry, but is his ownership any worse than that of sons who have inherited their ownership positions? Family ownership of newspapers is seen as somehow preferable to that of an outside coming in, but the fact of the matter is that it is rare that newspaper chains get successfully passed down. In the Bay Area, two newspaper giants, Floyd Sparks and Dean Lesher died and had their chains sold off – eventually to the same company, MediaNews Group. The results have been disastrous and now none of the individual nameplates exist.
MediaNews Group, you may recall, was formed by Dean Singleton, a man who did bleed newspaper ink. But Singleton built his newspaper empire by buying family newspaper and then cutting costs. During the heyday of the company, profits could be made because ad revenue was still growing, and so the lower costs allowed him the profits to buy more papers. All that came crashing down as ad revenues fell and there were less costs to be cut. In 2010 MediaNews Group filed for bankruptcy and Singleton removed from executive management.
Yet Singleton is not seen the same way as Ferro. Singleton was an insider, serving on the board of the Newspaper Association of America for over decade. Yet many people lost their jobs under his management, and many newspapers shuttered (or were shuttered shortly after he was replaced).
I guess the lesson is that the newspaper industry is there to be mismanaged by the insiders, and when outsiders come in and embarrass the industry by changing the name of one of its institutions to something silly (and who the hell created that logo?) it is seen as unacceptable. But I have faith that Ferro is just as capable of killing off the Tribune papers as Singleton was the Oakland Tribune, the Contra Costa Times or the San Jose Mercury News (which still exists but is a shadow of its former self).
Anybody want to buy a bankrupt digital media brand? One would think not, but today bids are due for Gawker, and tomorrow an auction is scheduled. Wouldn’t it be smart to just let the brands die? Probably not, someone will likely bid and end up owning the media brands.
Apparently Ziff Davis will bid. Yes, Ziff Davis is still around.
Many people remember Ziff Davis as the once powerful publishing of computing magazines. I once, actually twice, interviewed at Ziff but both times the position was left unfilled after bad earnings announcements. Had I moved to Ziff from McGraw-Hill I likely would still be living in the Bay Area. Damn Ziff Davis.
Ziff Davis, a lot of people do not know, was founded in Chicago long, long before the PC era. It was quite a diversified media company before acquiring PC Magazine in 1982. In 2000, though, it was acquired by Softbank in an acquisition that was all too typical of the Internet boom. Its fortunes and its value sunk after that. But today it is a subsidiary of j2 Global, a company in the business cloud services industry. Ziff Davis is its digital media arm.
We’ll soon know who thinks it is worth owning Gawker, that it might be Ziff Davis seems odd, to say the least.