Life After Wall Street   

Private ownership of newspapers has its charms, and no shortage of pitfalls.

For years we media critics have been beating up public ownership of newspapers for a living.

You know the drill: Pressure from Wall Street for ever–higher profits in good times and bad leads to rampant budget-slashing that weakens the product at a time of crushing competition for people's time and attention. The result is flimsier, less informative newspapers that are bad for public discourse and, ultimately, for democracy.

The alternative, of course, is private ownership. That's a model without Wall Street pressures, a world where profit margins of a mere 10 or 15 percent are theoretically acceptable.

So is private ownership all that? Depends on the owner.

I worked for privately owned newspapers for the first 15 years of my career. First up was the Philadelphia Inquirer, then owned by the late Walter Annenberg. Suffice it to say that it was a wretched newspaper. His capricious punishing of foes in the pages of his paper has been widely chronicled. Look up "evils of private ownership" and you're likely to see Annenberg's picture.

After the paper was sold to public owners – Knight Newspapers, later Knight Ridder – it became one of the best papers in the country. For a while, anyway.

My next stop was the family-owned Philadelphia Bulletin. The Bulletin for years had been the city's premier newspaper. But by the middle of the '70s it was under the direction of a generation of the owning family that was ill-equipped to go head-to-head with a budding powerhouse like the Inquirer.

In a reversal of a longtime trend, a dozen dailies – the ones McClatchy didn't want – have gone from public to private in the wake of the Knight Ridder breakup. With all of the angst that characterized Knight Ridder's final days, it will be fascinating to see how the papers fare in private hands.

Particularly intriguing is what becomes of the Philadelphia Inquirer and Daily News. Their new ownership is not only private but also local, something highly prized by all of us public ownership bashers.

But this is local with a wrinkle. The new owners are a group of players, people whose activities are apt to attract heavy scrutiny from the papers. And the lead guitar is a PR guy with a rep for muscling the press when he needs to. What happens when the papers pummel the owners and their interests?

The good news is they are vowing to keep hands off (which is much easier to do now than it will be down the road). They plan to keep the perennially endangered Daily News alive. And they project a positive approach to the future of newspapers, quite a contrast to what Inquirer columnist Tom Ferrick Jr. calls the "cold, dead hand of Knight Ridder."

On page 28 of this issue, Managing Editor Rachel Smolkin paints a vivid picture of Brian P. Tierney, the new CEO of the Philly papers and the one who put the deal together. What's interesting is that despite painful memories of Tierney's bruising battles with the paper, the staff – reeling from years of Knight Ridder budget-trimming – seems excited about the future.

Also newly in private hands is another of the Knight Ridder jewels, the San Jose Mercury News, now owned by Dean Singleton's MediaNews. Singleton is a guy who reminds us that fiscal restraint is not a monopoly of public companies.

I've watched with fascination as Singleton came out of nowhere, snapping up failing papers, slashing them into profitability, and suddenly ending up on top of the nation's fourth-largest newspaper company. In recent years we've seen the emergence of a New Dean who spent enough money on his Denver Post to win a bloody newspaper war. Let's hope that's the one who shows up in San Jose.

The potential upside of private ownership is real. But the potential downside – plenty of running room for untrammeled egos to run amok – has been on view for all to see in Santa Barbara.

There was joy in the newsroom back in 2000 when local billionaire Wendy McCaw bought the Santa Barbara News-Press from the New York Times Co. (See The Beat, September 2000.) But the wheels seem to have come off in recent months.

McCaw moved to limit coverage of drunk driving charges against Travis Armstrong, the paper's editorial page editor. She reprimanded staffers for publishing the address where actor Rob Lowe planned to build a compound. And she completed the trifecta by naming Armstrong acting publisher. Six editors and a longtime columnist resigned in protest.

All of which goes to show – it's not so much the type of ownership, it's who the owners are.