Shares for the People

March 10, 2009 • Media Economics • by

Die Furche, February 6, 2009

David Montgomery threw in the towel.

The “locust investor” was recently forced to sell a portion of his press empire, including flagship publication the Berliner Zeitung. Meanwhile, the Chicago Tribune and the Los Angeles Times filed for bankruptcy protection, thanks in no small part to gambler Sam Zell.  The American papers will likely land a new owner in the near future.

The hedge funds settled in with the Times have suffered dramatic losses. Mexican multibillionaire Carlos Slim agreed to bail out the debt-laden New York Times Company, while over in England oligarch and former KGB agent Alexander Lebedev purchased the Evening Standard.

Just imagine this in Austria or Switzerland!  The Standard or the Kronenzeitung taken over by a secret service agent from the Ukraine and the Neue Zürcher Zeitung bought by a Bulgarian billionaire? Wouldn’t this provoke an outcry?

Frequent changes in ownership can surely harm sensitive products like newspapers.  Zurich-based communication researcher Otfried Jarren longs for the return of “culturally-involved capital” – a phrase referring to family business owners who appreciate cultural assets (such as newspapers) and invest on a long-term basis. Such investors sound ideal, but there’s a catch – or rather three.

First, even prudent investors require a business model, yet intensified competition and a widespread preference for free, Internet-based media left the media’s business model damaged. In addition, family owners do not necessarily make better entrepreneurs. Evidence suggests the second or third generation of dynamic and successful entrepreneurs are often less efficient.  Finally, “culturally-involved capital” seems like a quasi-scientific paraphrase for a patriarchal business. Would we really want the likes of Axel Springer or Hans Dichand back? Despite the crisis, as Democrats we don’t dream of a monarchy.

On the other hand, Berlin’s left-wing alternative, taz, continues to collect money from a faithful readership. Perhaps distressed papers should try “people’s shares” before surrendering to investors such as Slim and Lebedev. Shareholders wouldn’t be rewarded in cash, but rather in the satisfaction that comes with an independent press, either in print or online.

Translation by Karin Eberhardt

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