July 2013
Volume 33 No. 5

May 2013
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My Two Cents

Recently, the radically conservative U.S. billionaire brothers Charles and David Koch showed an interest in buying Tribune's eight regional newspapers, which include The Los Angeles Times and The Chicago Tribune, for $623 million - a pittance considering their annual revenues of $115 billion. Think of it this way: It's like a family with a yearly income of $100,000 buying a $540 flat-screen TV set.

This, after another U.S. billionaire, the more moderate Warren Buffett, paid $344 million for 28 daily regional newspapers. He's worth “just” $53.5 billion. Using the same comparison, it's like the same family went out on a limb for a better $640 TV set.

A third protagonist of interest is the U.S. billionaire and New York City Mayor, the somewhat liberal Michael Bloomberg, who has his sights on the The Financial Times.

Of the three billionaires, Bloomberg is the poorest, with “only” $27 billion to his name. With the FT worth about $1.2 billion, it would be like the middle-class family splurging on a $4,500 vacation.

Now these three billionaires, representing the full political spectrum, demonstrate not only the viability of the print media, but also their significance in terms of political influence that no online daily could yet offer.

Indeed, it's one thing to see a news story printed on paper and another to see it online. No matter what they tell you, print and TV are still more valuable and valued than online media. On the other hand, while Al Gore's Current TV cable and satellite channel was poo-pooed because it only made $24 million in profit, The Huffington Post was praised despite losing money. Nevertheless, Current TV was sold for $500 million, while the online HP got $315 million from AOL. Obviously, the Internet bubble of the year 2000 did not teach them anything.

But let's not digress from the point of this diatribe: Each of the aforementioned billionaires wants the print media to influence the U.S. political process. The Koch brothers to create anarchy by eliminating rules and regulations; Buffett to reform the tax code and Bloomberg to simultaneously fight the three million NRA members who are holding hostage (with the support of gun manufacturers) 300 million Americans, and the food and beverage industries that are creating a generation of obese children.

All noble endeavors, no doubt to the eye of the beholder. However, how are we citizens supposed to confront, oppose and/or counter-balance those multi-million-dollar political campaigns? Money talks and concerned citizens walk!

We don't have the tools to engage in a democratic discourse. Actually, the use of corporate billions against citizens' single dollars is considered sanctioned by the U.S. Constitution (i.e., freedom of expression).

And the Internet doesn't help either. For example, in Italy the Movimento 5 Stelle that was started on the Internet by the comedian Beppe Grillo (himself a multi-millionaire), became a political force (winning 162 seats out of the 945 in the Italian Parliament) only when the traditional media (radio, TV and print) began giving it ample coverage. In this instance, Grillo's strategy was to avoid interviews, leaving traditional media to eagerly report statements that he posted on his blog, thus widening the reach that otherwise was limited to the usual followers.
Going back to the U.S. billionaires, it is not that they're interested in the acquisition of traditional media on pure ideological grounds. In a statement, the Koch Companies said that they “are constantly exploring profitable opportunities.” In addition, The New York Times quoted a Koch consultant saying that, “the Tribune's papers were considered an investment opportunity.”
According to MediaFinder, some 200 new magazine titles were launched in 2012 and niche magazines are faring better than general-interest ones.

Recently, in our industry the weblog Deadline Hollywood purchased Variety for $25 million, when FT valued it at just $10 million. It's clear that traditional media has a future in the Internet age, not only to advance a political agenda, but also to make money.

Dom Serafini

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