Save The New York Times: Bankrupt It

Everyone seems to agree that we need save journalism as we watch newspapers slowly sink into insolvency.

Why? Mike Royko, the acerbic, blue-collar, Pulitzer-Prize-winning columnist for The Chicago Daily News put it best, I think, when he wrote that "a reporter is to a politician as a barking dog is to a chicken thief." The country needs these watchdogs not only for politicians but also for businesses, Wall Street, and the climate.

Many newspapers, magazines, blogs, commissions, and even the government have taken up the question of saving journalism. One report, "The Reconstruction of American Journalism," by former Washington Post Editor Leonard Downie, Jr. and respected newspaper historian Michael Schudson and sponsored by the prestigious Columbia University Graduate School of Journalism, is the most extensive research I've seen that has been conducted on the subject to date.

Downie and Schudson are basically optimistic, especially for local journalism, but they are less optimistic for hard-hitting, responsible investigative reporting on national issues and put forth some ideas and suggestions for preserving this important type of journalism. See this video interview with Schudson to get a summary of the report.

Here are my specific suggestions:

• Because TheNew York Times is the best and most important newspaper in the country, its survival must be addressed first.
  
• First, TheTimes must be wrested away from the Sulzberger family. How?


• Bill Gates and Warren Buffet have to start things off by agreeing to put a $5 billion matching grant from the Gates Foundation into a new Journalism Preservation Foundation and then pressure other billionaires (Bloomberg, Murdoch, Redstone, Ted Turner, Page and Brin of Google included) to contribute to get the fund up to $10 billion.
  
• Buy Carlos Slim's $250 million loan to The Times by giving him 15 or 16 percent interest on his money. He'll take the deal because he doesn't care about the viability of The Times or journalism. If he did he would have given it a lower interest rate; he cares about the money - that's how he got so rich.
  
• Then, call in TheTimes's loan as soon as legally possible, which will force it into bankruptcy.
  
• When the paper is in bankruptcy, offer to buy out the Sulzberger family's voting stock at a big discount and buy non-voting stock at pennies on the dollar. Investors who were dumb enough to buy non-voting stock in a company run by Pinch Sulzberger deserve to lose most of their money.
  
• While the paper is in bankruptcy, get rid of current business-side management (Sulzberger, Robinson, etc.) and the many layers of bureaucratic management and hire bright, young professional managers who want to save journalism and are not interested in getting rich - make sure they live in Queens or Brooklyn where they can hobnob with the folks and not need to pay high rents.
  
• Negotiate ruthlessly with the paper's unions to get major concessions.
  
• Renegotiate the contracts with all the editors, reporters, and columnists. It's an honor to write for The Times and the top compensation should be $200,000 and contracts should be 360 contracts like the record companies are making with musicians in which the paper would get a percentage (40 percent?) of the speaking and consulting fees. Reporters, editors, and columnists wouldn't get gigs without Times exposure, so the paper should get some of the action. If they don't like the deal, they can try to get a job that pays more somewhere else - they could interview at Google, for example.
  
• Charge $299 a year for online subscriptions to a complete version of the Web site and put a Times Lite version on the Web free and charge non-subscribers a per article fee for the heavy versions of articles.
  
• Give students with an .edu e-mail address a 33 percent discount on subscriptions.
  
• Charge readers who want to get the newspaper printed on paper and delivered the actual cost of each paper - if it's $10 a paper, so be it. If they want their fingers smudgy, let them pay for it.
  
• When The Times exits from bankruptcy, it will be a non-profit organization run for purpose of putting out great journalism, not for making a profit.
  
  That's a start. I'll have some more ideas in Part II, but in the meantime, I'd like to hear your ideas on how to save journalism and The New York Times
  
   

  Follow Charles Warner on Twitter: www.twitter.com/CHWarner

Comments

[bannorhill]

08:09 PM on 12/22/2009

So now the government is being asked to bail out a poorly run left wing news outlet.

Did the government bail out the Christian Science Monitor?

[raker]

07:52 AM on 12/22/2009

I got a solicitation from The Boston Globe. They're planning to charge $5 a week for the online version of the paper. This is a paper, mind you, that got rid of all its columnists worth reading years ago, and whose news sections consist of little AP blurbs and lots of Hollywood gossip. I might have bitten for $2 a week. but $5? No way. Newspapers need to find a way to keep their online content free.

[dynwit]

01:03 AM on 12/22/2009

Students already get the Times *free* on their college campuses. I teach at two Utah universities, and there are free copies of the NYT available all over campus.

[klondiker]

06:39 AM on 12/21/2009

I think you're confusing the difference between New York Times the paper and The New York Times Company (NYT Co).

As far as I know, the paper alone is doing fine. The problems are with the the Company because it owns a whole bunch of other papers that are unprofitable. Plus, in recent years, the Company has made some pretty stupid investments in real estate and baseball teams, which is tying up a lot of their cash.

The Company needs to return to its core business. They are newspaper publishers. They should not be using cash on real estate or other things. Of course, the other solution is that maybe the paper should be spun off as an independent entity.

[Dukedraven]

04:41 PM on 12/19/2009

Good luck in getting people to pay for online subscriptions.

[Tom Matlack]

04:19 PM on 12/19/2009

I was the Chief Financial Officer of The Providence Journal Company, the oldest continually published paper in the country (189 years and counting) which I took public for the first time in 1996 and sold for $2 billion 90 days later to Belo of Dallas Texas http://www.projo.com/words/story902.htm

Mr. Warner I certainly sympathize with your motives here but I have to say your financial deal-making suggestions are not feasible. The idea of buying the debt and then call it to force the company into bankruptcy isn't going to happen. Read the debt instrument.

I agree with your frustration with both the union and existing management. Both are to blame for the death spiral.

The question is whether its worth propping up the existing grand old papers in this country or its better to start fresh with something better. To me the problem is the insistence on a 200 year old business model that only works with monopoly economics.

I would far prefer starting from scratch to build a new model of web based news gathering that includes the best journalism in print as well as video and isn't encumbered by the excessive fixed costs of the dinosaurs. To some extent that is already happening (think of the on the ground reporting in places like Iran during the recent uprisings). But I expect we are just the start of the new paradigm. And soon the Times will be in the rear view mirror.

[famebook]

05:50 PM on 12/19/2009

It's interesting Tom, that I find myself here having been noted by email from the Huffington Post that you'd comnmented. So apart from the inherent compliment on your ability to stimulate my interest in subjects, I find it relevant too that once again (and becoming an almost daily habit) I return to The Huffington Post to read a few more articles. The same cannot be said in my case for the NYT. I wrote this a while back - http://bit.ly/4wqupn which is my humble take...

[Tom Matlack]

09:42 AM on 12/20/2009

Jan great minds think alike! Here is my HP on the same topic that picks up on some of what you are saying as well: http://www.huffingtonpost.com/tom-matlack/the-boston-globe-american_b_235922.html

[Robert N Lee]

10:15 AM on 12/20/2009

Tom, with all due respect, I think you're rather missing the point. The newspapers are doomed and going. Print is doomed and going. That's happening. Mr. Warner isn't suggesting that be stopped, somehow, he's suggesting that the New York Times convert to a non-profit. Which I'm pretty sure is unpossible, for about a billion different reasons, although I appreciate the sentiment.

The issue at hand isn't business models, it's best professional practices, the ones working journalists and editors have hammered out over decades and centuries together. Those are in legitimate peril of being lost in this very abrupt and painful social and market transition.

Put grotesquely simply: if the future is bloggers, then we need some journeymen and women around to teach at least some of those bloggers to be reporters and editors. These are actual jobs with their own requirements and standards and skillsets, and in that sense, no, it wouldn't be better to start from scratch with a new model. That'd be very unfortunate, actually, for all of us.

[Maxiesid]

08:05 AM on 12/18/2009

How can you possibly write a whole column to address what is killing journalism when you totally ignore the cause? When newspapers go back to being watchdogs and they quit being lapdogs then they may actually regain some credibility. The laws governing ownership of the media have to be reinstated. The Rupert Murdoch media empire is the cancer that is gnawing away at journalism and unless and until that fact is recognized, journalism will continue to die.
Actually the best thing that can happen to the newspaper industry is that it be allowed to die. The days when "a reporter is to a politician as a barking dog is to a chicken thief." ceased to exist in the last eight years, and was replaced by a total propaganda machine owned by the government. If they all go under, including the 'too big to fail' ones, the result will be that people that actually CARE about reporting the news will start small news businesses. They will grow because they will have the credibility that comes from not being owned by the people they are reporting on, the whole cycle will begin fresh and they will actually be small town, people owned press that report the NEWS. I look forward to it. I hope I am still around to see the reimergence of real news sources, I miss it.

[CharlesWarner]

10:34 PM on 12/20/2009

Intelligent readers will miss the NY Times if it dies. The public needs many of the excellent editors, reporters, and columnists.

[enkergrene]

07:37 PM on 12/17/2009

I actually like these ideas so far--except I wonder if a complete overhaul of the Times' business model as described in the article might actually make it commercially viable, so it may not have to go the "non-profit" route... just a thought.

[Jason Buberel]

06:04 PM on 12/17/2009

Both the Mike Royko and Mr. Warner appear to be making the assumption that only newspaper journalists do investigative reporting. And were newspaper journalists to disappear, investigative reporting would do the same. This is the same argument as has been made elsewhere, but I see little or no evidence to support the notion.

Newsprint is simply a means of production (large pieces of paper) and distribution (newsstands and home delivery), but it is by no means the only source of original, probing investigative reporting. The medium is not the message. Journalists who work with in other media formats (digital text, audio, video) for other types of media companies can and very likely will take the place of those who are lost to an outdated physical medium.

[theroguerepublic]

04:38 PM on 12/18/2009

well said