Gold pot in sight
US press The American newspaper industry, plagued by falling circulation and sales, is hoping for a rescue. It is to come from private investors and search engines.
US press The American newspaper industry, plagued by declining circulation and sales, is hoping for salvation. Last week, seven large regional newspaper chains announced a cooperation with Yahoo to better distribute their ads and content with the help of the search engine. The deal is aimed at improving the use of regional markets: Yahoo will become a provider of local content, and the newspapers will increase their base of potential online advertisers. "This is the pot of gold at the end of the rainbow," believes Colby Atwood, President of consulting firm Borrell Associates. "These newspapers need to pursue those advertisers who aren't already appearing in the paper to grow their online business." A total of 176 newspapers with a combined circulation of over 12 million copies are partners in this deal. Google had also concluded a similar cooperation with various newspapers shortly before.
But newspapers are also being courted by other interested parties: both the Los Angeles Times and its owner, the Tribune Company, as well as the Boston Globe are currently the object of desire of private financial investors. A dinosaur of the publishing industry has already found a buyer in this way: Reader's Digest was recently bought by the private holding company Ripplewood.
And a second medium of days gone by, radio, has recently gained new appeal with the takeover of Clear Channel Communications by investor groups Bain Partners and Thomas Lee. "Even though we all talk about this business as if it's dying out, there's still an awful lot of money to be made," says Andrew Ross Sorkin, business reporter for the New York Times.
In fact, many US newspaper companies still generate profit margins of 15 to 20 percent, a volume that other industries can only dream of. But the American stock market is primarily interested in growth, and the industry has nothing to show for it. "It's good for newspaper companies if the pressure to report growth every quarter is removed," says Brian Steffens, Director of the National Newspaper Association. "The industry needs a little time to restructure itself."
Millionaires vie for LA TimesThe interest of financial investors in the media began this year in the television industry, when Saban Capital and a number of other investors took over the broadcaster Univision. The most heated discussion, however, was provoked by a possible sale of the Los Angeles Times. Three prominent billionaires, including Hollywood mogul David Geffen, have expressed an interest in the fourth-largest US daily newspaper. At the same time, the former head of General Electric, Jack Welch, is flirting with an acquisition of the Boston Globe, which belongs to the New York Times Company.
How these desired marriages could take place is, of course, completely open. Thomas Kunkel, publisher of the American Journalism Review, has doubts about the motives of the rich philanthropists. "Of course, we can't know how Welch or Geffen would run a newspaper. But history teaches us that there will be conflicts with independent reporting about their influential friends, for example," he says. "Such leaders don't like to stand passively on the sidelines."
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But newspapers are also being courted by other interested parties: both the Los Angeles Times and its owner, the Tribune Company, as well as the Boston Globe are currently the object of desire of private financial investors. A dinosaur of the publishing industry has already found a buyer in this way: Reader's Digest was recently bought by the private holding company Ripplewood.
And a second medium of days gone by, radio, has recently gained new appeal with the takeover of Clear Channel Communications by investor groups Bain Partners and Thomas Lee. "Even though we all talk about this business as if it's dying out, there's still an awful lot of money to be made," says Andrew Ross Sorkin, business reporter for the New York Times.
In fact, many US newspaper companies still generate profit margins of 15 to 20 percent, a volume that other industries can only dream of. But the American stock market is primarily interested in growth, and the industry has nothing to show for it. "It's good for newspaper companies if the pressure to report growth every quarter is removed," says Brian Steffens, Director of the National Newspaper Association. "The industry needs a little time to restructure itself."
Millionaires vie for LA TimesThe interest of financial investors in the media began this year in the television industry, when Saban Capital and a number of other investors took over the broadcaster Univision. The most heated discussion, however, was provoked by a possible sale of the Los Angeles Times. Three prominent billionaires, including Hollywood mogul David Geffen, have expressed an interest in the fourth-largest US daily newspaper. At the same time, the former head of General Electric, Jack Welch, is flirting with an acquisition of the Boston Globe, which belongs to the New York Times Company.
How these desired marriages could take place is, of course, completely open. Thomas Kunkel, publisher of the American Journalism Review, has doubts about the motives of the rich philanthropists. "Of course, we can't know how Welch or Geffen would run a newspaper. But history teaches us that there will be conflicts with independent reporting about their influential friends, for example," he says. "Such leaders don't like to stand passively on the sidelines."
Gerti Schön
