Shifting from Dollars to Sense   

Taking Stock: Journalism and the Publicly Traded Newspaper Company

By Gilbert Cranberg, Randall Bezanson and John Soloski
Iowa State University Press
212 pages; $49.95

Have you ever played one of those bedeviling video games where you're trapped in a dangerous chamber, monsters closing in, and you're saved only after discovering a magic sword hidden somewhere that in retrospect seems fiendishly obvious?

"Taking Stock" may remind you of those games. Its authors, looking in obvious but relatively unexplored territory, identify several potential swords that could help reform today's corporatized news media.

Cranberg, Bezanson and Soloski are scholars with strong connections to journalism, and they are devotees of public-service news. Here, they choose to take on big journalism on its own terms--as business. By carefully examining the structures and inner workings of 17 publicly traded newspaper companies, they pinpoint key levers that might be used to induce change.

In the rush of media criticism being generated these days, it isn't easy to be original. But this approach is fresh and elegantly simple. Using documents, interviews and data, much of it in the public domain, the authors compile detailed financial and organizational information about the companies: how their stock is distributed, how their boards are composed and compensated, how their executives are rewarded, how their business strategies are promulgated.

Then, playing off this base of evidence, they offer pragmatic suggestions for rescuing public-service journalism through reforms at the corporate level.

This is an expensive, scholarly book published by a university press. It may not get a lot of attention, and who knows if its suggestions will actually work? But it deserves widespread consideration.

To begin, it is direct in defining the problem. Investor ownership is "indifferent to news or, more disturbingly, its quality," the authors write, turning papers into vehicles "controlled for financial performance, not news quality."

"News is no longer the focus of the newspaper.... Instead, news has become secondary, even incidental, to markets and revenues and margins and advertisers and consumer preferences."

These changes, the authors argue, are "compromising the newspaper's continued role as a fiercely independent source of information and opinion...in a free, democratic, capitalist society."

Specifically, they are triggering reductions in news staffs, breakdowns in the wall between news and business, and compromises in the independence of news judgment. More and more, the goal becomes providing desirable audiences to advertisers rather than providing vital information to readers.

These developments have been well documented elsewhere, but "Taking Stock" provides a new layer of specifics, helping explain why they have taken root so deeply:

• The boards of newspaper companies often lack journalistic sensibilities. "Of the 131 outside directors on the boards of the 17 companies, only 17 (13 percent) have had experience on the editorial side of a news organization."

• Board members benefit from financial performance rather than improvements in quality.

• Compensation of newspaper managers, including news executives, is tied to financial growth. "Nearly three-fourths of the editors we interviewed receive stock options."

• Institutional investors such as banks and mutual funds are disproportionately influential. "For 14 of the 17 companies, institutional investors owned a majority of the publicly traded stock."

• Changes in SEC rules allow "institutional investors to speak among themselves, to join forces (informally) and present a united front" to newspaper managers.

• Big investors and the stock analysts who serve them have easy access and influence. "I can get a meeting with senior management...any time I want," one analyst told the authors.

The authors are not naïve revolutionaries ("News is a business" is the book's first sentence), and they do credit several companies, notably McClatchy, Dow Jones, the Washington Post and the New York Times, for developing organizational structures that help insulate them from the worst market pressures.

But in general they show a systemic shift of power toward the business mind-set and away from the culture of news.

We have two choices, the authors say: Accept this shift, or "seek change at the structural level." They select option two, and they issue, among others, the following suggestions:

Newspaper boards should have at least one independent journalist. Compensation for board members and news executives should be based on circulation and journalistic quality, not market performance. Laws should be changed to explicitly authorize directors to consider good journalism and community service in making business decisions. And federal authorities should revise regulations that give institutional investors "access to corporate information not generally available to the public" and undue influence on policy.

Without much fanfare, the authors also float an inflammatory suggestion: that the problem may require government intervention.

That they are prepared to crack open this can suggests how deeply passions are running. It was fear of government that prompted the media to move toward greater social responsibility after World War II, and maybe that fear is in the air again.

Overall, "Taking Stock" represents good research and constructive thinking. While the authors are mostly silent on how to enact their recommendations, the logic of their approach is persuasive. Whether or not they have found the magic sword, their ideas could give reformers a fighting chance.