The Hindu Business Line : Shopping for media

While ownerships change, there is the fear in print media that new owners who represent only local interests, could interfere with editorial freedom.

Are you a lucky American billionaire or a private equity firm with money to spare? If so, the current trend is in buying up established media companies, which include famous newspaper chains, the biggest selling magazine in the world and of course, TV and radio stations. Buyers are lining up to take over prestigious newspapers like the Los Angeles Times and the Philadelphia Inquirer, which, along with other print publications, has slid downhill in recent times. American real estate developer Eli Broad, grocery stores magnate Ronald Burke — both Los Angeles billionaires — are mentioned as likely future owners of Los Angeles Times, which along with Chicago Tribune and eight more dailies, is now part of the Tribune group with a market value of $7.7 billion. The LA Times, which had been losing readers and ads regularly, sacked publisher Jeffrey Johnson and editor Dean Baquet, who were not willing to undertake newsroom-staff cuts.

But Broad and Burke may not have it all that easy. Waiting in the wings is Hollywood mogul Devid Geffen, who made his billions from films, theatre and pop music. A leading Democrat, Giffen has many friends in the media and in 1994 started his venture `Dream Works' along with Steven Spielberg and Jeffrey Katzenberg. Though Dream Works did well in the movie business, revenues from TV, music and animation efforts were less than encouraging. But then Geffen, who is supposed to have `more money than God', thought nothing of hiking his investment in the project from an initial $33.3 million to $300 million.

Others looking for new buyers include the Philadelphia Inquirer, which sacked its 54-year-old editor, Amanda Bennet, and brought in William Marimow, who had won a `Pulitzer' working for the paper in the past. Another prestigious daily making losses is the Boston Globe, which is being sought after by the former GE Chief, John E. Welch. But its present owners, New York Times, are not prepared to sell, at least for the present. But the owners of the most popular magazine in the world, the 84-year-old Reader's Digest had no such qualms.

The Digest, published in 21 languages and with an estimated sale of 18 million copies, agreed to a buyout for $1.6 billion by investors led by Ripplewood Holdings, Merril Lynch Capital and J. Rothschild group, who would pay off the Digest's $800 million debt. The group, which already publishes magazines like Time-Life Series, The Weekly Reader and the World Almanac, will also acquire other successful Digest publications like food magazine Taste of Home and Everyday.

Why did Digest sell out? Subscriptions in the US had been falling steadily, almost 18 per cent during the past four years. The transaction reflects the tendency of private firms to acquire public companies dealing in fast-selling products, despite a current slump.

On the other side of the media business, Clear Channel Communication, the number one network of radio stations in the US and a public company for 22 years, was taken over in November by Thomas H. Lee partners and Bain Capital for $26.7 billion (which includes $8 billion in tax liabilities); this is said to be the largest buyout in the US. But the sale is only for part of the Clear Channel empire, which will retain 448 of its 1,150 radio stations and 42 TV stations. Another giant, Univision Communication, the largest Spanish language broadcaster in the US, was acquired for $12 billion by a consortium.

While ownerships change, there is the fear in print media that new owners who represented only local interests could interfere with editorial freedom. In the past, dailies like LA Times and Inquirer spoke for the entire nation but if owned by local grocers and real-estate dealers, such an outlook could change. The newsroom could never be the same again, journalists fear.

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