by Brennan Elizabeth Dole Hart
In recent years, media has undergone huge transformations in regards to development, audience, trust, and technology. While this has opened the door for young people to capitalize in creative ways on the new digital landscape, it has also disrupted the habitual flow of news and has caused a major drop in the revenue streams of established outlets. With a wide range of access to free news stories on exclusively digital platforms, barely any subscribers still receive their news via hard-copy publications nor contribute even a minimal donation for news online. While independent media organizations are struggling to stay afloat, large corporations are finding that conventional models no longer suit the needs of modern media. This has caused a wave of employee cutbacks, company consolidation, and a seemingly bleak horizon for traditional media. However, a suite of extremely wealthy men and women have started buying news outlets, saving them from bankruptcy and extinction. Although this may seem noble, the financial risk suggests there must be an underlying motive to such ventures; in short, why are all these rich guys investing in a dying industry?
Over the past few decades, the technological revolution has upturned all assumptions about how media functions or what it entails. For example, the imminent tsunami of artificial intelligence has fostered anxiety and urgency in the job market. With fewer positions necessarily filled by humans, companies shrink down and reduce their number of employees––the remaining of whom are then expected to take on many more tasks than expected in the past. More importantly, the transformation of the funding model has resulted in media sources struggling to find ways to finance quality journalism. Without proper financial support, many news outlets feel like they have to turn to “clickbait” to attract page viewers and consequently keep up with advertisers, despite the fact that even heavy traffic and a higher number of clicks does not always yield a substantial amount of ad revenue or reader subscriptions. While attempting to keep up with digitization and other technological changes, media outlets are forced to prioritize certain aspects of production in order to stay afloat. However, this means that the survival of the industry often takes precedence over the so-called North Star of journalism––the mission to provide a public service to society; ultimately, “a continuous disruption of the media industry has resulted in a market failure for public interest journalism.”[1] Navigating these structural changes has caused severe disorder for the media industry, forcing old patterns to retire and systems of influence to shift.
To counteract this confusion, major players from other industries have entered the scene in a sort of modern-day media rescue mission. This causes the world to wonder: why do billionaires keep buying newspapers, if they are in such a downward spiral? The cognitive dissonance of wealthy people who invest in a deteriorating industry may appear strange, but the phenomenon can be explained by two major factors. Though motives vary case-by-case, the first underlying reason may be because “a little red ink may well be worth the price to influence the debate.”[2] Regardless of current disruptions to traditional media, news still wields immense authority and influence in the public sphere:
Many agree that news media still matters when setting the agenda. It signals what is important to the public and what the public should be paying attention to, and is a mechanism that policymakers feel they need to respond to in order to retain legitimacy.[3]
As media is one of the most salient tools of influence, it makes sense that powerful people would want to use their resources to capitalize on a method that will allow them even more social or political sway. Thus, the ownership of news outlets by people who want to spread their own agendas presents a risk––in the wrong hands, media bias can negate the integrity and public service supposedly offered by credible journalists and news agencies.
A prime example of this technological annihilation occurred in November 2017 when Time Inc.––the media conglomerate best known for magazines such as Time, Sports Illustrated, Fortune, and People––was acquired by the Meredith Corporation. According to the New York Times, “the company failed to keep pace as the industry wide transformation from print to digital rendered old methods of magazine-making obsolete and publishing companies crumbled under the pressure of declines in print advertising and circulation.”[4] Unfortunately, this is happening with increasing regularity, as once-renowned media publications struggle to contend with the changing digital world. However, the crux of the issue lies within the financial side of this business venture: the three billion dollar deal would not have been made possible without a hefty $650 million from David H. Koch and Charles G. Koch. The infamous Koch brothers are currently valued at $46.3 billion each, ranking numbers 13 and 14 on the Bloomberg Billionaires Index. Though the Meredith Corporation says that Koch Equity Development will not have a seat on its board of directors, Charles and David Koch, who are known for their extreme right-wing views, “have long sought to shape political discourse through their support of nonprofit organizations, universities and think tanks.”[6] Thus, we are presented with the paradox of attempting to encourage democracy via the financial support of journalism while also risking a potential media bias from owners who have ulterior motives of control. Without media, nothing in 21st Century society would operate as fluidly or perhaps even at all. Thus, to be able to influence what large swaths of the world think directly through the main channel of modern life is a tempting enterprise, and is one plausible explanation for why billionaires still invest in the news industry.
Thus, the acquisition of media outlets by already-persuasive players can be extremely dangerous; their motives are often significantly correlated to the demand for a monopoly of political and social power. There are shady buyers like the Koch brothers or a host of questionable others––such as Sheldon Gary Adelson, who covertly purchased the Vegas Review Journal despite previously spurning the idea of unrestricted, free media. The gambling industry mogul (who at $39 billion ranks #19 on the Bloomberg Billionaire Index) raised eyebrows following this acquisition, as he is known to sue reporters for libel if they write about his empire in a manner he doesn’t approve of.[7] Additionally, Adelson spent $140 million on the deal––an excessive amount for a relatively minor publication. As it is clear he did not purchase the Vegas Review Journal to inspire free speech in the journalist community, this example proves how ownership of media fuels the desire for even more control; though Adelson was already considered “perhaps the most powerful and overtly political figure in the state,” he turned to media for the chance at an even larger stake in his influence.[8]
However, the second, more idealistic reason for this unlikely investment boom has to do with the intersection of the heroic functions of wealth that is directed towards a purpose, and journalism. This phenomenon is not actually so out of the ordinary, as the goals of philanthropy and the core aim of journalism inherently align: both sectors strive to promote justice and democracy, so it is natural for one to fund the other. Privately-owned media occupies a space separate from the government, which can be explained following the model of the Fourth Estate. The focus here is on the importance of differentiating the state from other institutions (in this case, the media), which can consequently hold the government accountable for their actions: “this idea that the press and government are separate is critically important to how the press are perceived by citizens in a liberal democracy.”[9] Though there are many further layers that complicate the relationship of state and press (i.e. regulation, privacy, etc.), the basic premise that responsible journalism fuels democracy is integral to the research on why wealthy individuals are investing in newspapers today.
Billionaire Patrick Soon-Shiong, for example, is an avid financier of the press due to beliefs that stem from the desire to fight for democracy. Though he made his money in the biotech industry, Soon-Shiong turned his focus on media early this year. He says his decision to purchase the Los Angeles Times, the San Diego Union-Tribune, and Hoy Los Angeles was largely due to his understanding of “the role that journalism needs to play in a free society,” shaped by the experience of growing up in apartheid South Africa.[10] While this particular instance may have been induced by an individual’s specific life history, many others have realized this need as well.
In fact, the link between democracy and media was recognized 160 years ago, when co-founder of The Atlantic Ralph Waldo Emerson “established the mission of the organization as to ‘bring about equality for all people’”[11] In more recent times, this need has increased tenfold. In light of the 2016 presidential election in the United States, the era of false news, hateful political rhetoric, and nationwide instability has made accurate, high-caliber journalism extremely valuable. This is also where the crossover between philanthropy and the media can be seen most fully, as it is the job of both journalists and philanthropists to support causes that promote equity, justice, and democracy. Meanwhile, in this particularly heated era––“an unprecedented political climate where the most basic rights are under threat”––philanthropy must focus on the rights of “immigrants, the LGBTQ community, people of colour, women, people with disabilities and all those who intersect with these identities.”[12] Now more than ever, journalism must report with accuracy and integrity on these same issues––particularly since unreliable media may have instigated this tumultuous political atmosphere in the first place.
Media itself is partially at fault for the current political state that the union between philanthropy and journalism is now trying to salvage. This was originally spawned by a disruption of the information base in the United States, poisoned by stories reliant on spurious facts. Misinformation is incredibly dangerous, and is an instrument capable of completely undermining democracy. False news, automated accounts, and other methods of manipulating technology affect political processes around the world––including elections in the Netherlands, France, and the United States. Even worse, “media manipulation is contributing to the shrinking of Eastern Europe’s democratic space, the fomenting of the far right in Germany, as well as fueling conflict in Syria, Yemen, Myanmar, Turkey, and shocks such as Brexit or the constitutional crisis in Spain.”[13]
In turn, this widespread misuse of media has led to a severe decline of credibility in the news. In 2017, the Digital News Project from the Reuters Institute analyzed a survey in the United Kingdom, which found that trust in media had fallen by 7% compared to the year before.[14] In fact, Edelman’s annual public trust report found major declines towards institutions of government, business, and NGOs, but most of all towards the media. This is alarming, because if the public feels like they cannot believe anything, the masses can be easily controlled by a single force––say, perhaps, an outlandish character with Cheeto-colored hair and a bad spray tan. Luckily, due to the clarity between disinformation and declining democracy, philanthropies are now focusing on initiatives to fund responsible media. These efforts, such as the News Integrity Initiative run by the Knight Foundation in the United States, include media literacy and fact-checking programs to counteract the effects of misinformation.[15] Ultimately, channeling private equity into the media industry will hopefully address what some view as “the most immediate threat today, ‘the decline of civic media and the resulting deterioration of public discourse’ which are prerequisites for a functioning civil society.”[16]
It is clear that financial media support can be manipulated on both sides; while there are an abundance of wealthy people willing to fund the aforementioned programs, there are also many whose versions of “philanthropy” are more oppressive than egalitarian. For example, hedge fund executive Robert Mercer is a huge proponent of supporting the media…yet, rather than promoting the dissemination of unbiased information, Mercer and his foundation (the Mercer Family Foundation) direct money towards right-wing think tanks in the U.S. such as the Media Research Center. Robert Mercer is not only President Donald Trump’s biggest donor, but also the $10 million reason why Steve Bannon was originally able to fund the extremist, conservative website Breitbart News.[17] In the chaotic media landscape of today, disjointed voices are constantly jostling to be heard over one another. While flushing money into news media may not yield an immediate or direct profit, it enables the financial backer to heavily influence public opinion in either disastrous or democratic ways.
Although philanthropy in the media has grown exponentially in the past few years, its funding is divided up in such a way that does not necessarily focus on the actual production of quality journalism. In a span of four years, the Media Grants Data Map calculated that $1.3 billion of philanthropic money was dedicated towards global media initiatives––though funding was primarily divided among various programs in the United States.[18] In fact, over 90% of said grant money goes to organizations located in the U.S., compared to six percent in Europe and one percent in developing nations around the world. From this sample, researchers found that two-thirds of this money is allocated to “services” such as awareness campaigns for causes like international development or education, one-fifth goes towards open access initiatives and technological innovation, and just 17% is left for the funding of “the production of independent journalistic coverage.”[19] From this dwindling percentage, very little goes towards established media companies; rather, foundations choose to fund fellow charities. This is partially due to the fact that regulations make it easier for charities to donate to similar organizations rather than corporate businesses, but also because commercial news outlets and foundations tend to have disparate goals. Their interests are not always aligned, particularly since foundations are “issue-driven funders” who have their own agenda.[20] These groups prefer that their money is used to cover specific topics and themes that the organization stands for, whereas media outlets simply want foundations to see the value in journalism itself as enough of a public-interest goal. Consequently, despite such high figures of philanthropic involvement, only a small fraction actually accounts for the creation and dissemination of information, news, and journalism around the world.
Thus, while the money from charitable organizations certainly affects the media industry, a higher impact comes from actual investors who participate from a business angle. The significance of the acquisition of The Washington Post by Jeff Bezos, for example, can be more easily traced than that of foundations who spread their money circuitously around the media industry by way of other charities. Bezos, the creator of e-commerce behemoth Amazon, bought the Post under his own name rather than his company’s. This was presumably due to his personal estimation of the importance of journalism…or perhaps so that he would not have to convince the board to subsidize $250 million for an old-media platform that had just lost $53 million the year before.[21] Bezos explains in a letter to the employees of the Post, “Journalism plays a critical role in a free society, and The Washington Post––as the hometown paper of the capital city of the United States––is especially important…The values of The Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners.”[22] Clearly, Jeff Bezos did not undertake this venture as a means to turn a quick profit, nor to spread his own agenda throughout American news stands. Rather, Bezos is an example of a successful entrepreneur choosing to invest in a less-than-profitable industry not for his own benefit, but simply to support the society that he thrives in by indirectly funding democracy. The Bezos-Post model is a hopeful representative of the relationship between tech moguls and old media; it is imperative to recognize that even within a rapidly-changing digital world, traditional forms of media are still powerful ways to uphold access to information and truth.
It’s no surprise that extremely powerful people have the tendencies and desires to accumulate more and more capital––in both tangible and influential terms––until they have a stake in all sectors of society. Thus, for billionaires who have seemingly unlimited resources, adding a news outlet to their portfolios for a few hundred million is practically nothing. However, while this investment may not make a huge difference in the actual pockets of these tycoons, it’s obvious that the fiduciary return will be neither immediate nor substantial. Traditional media is slowly fading––even for tech-savvy billionaires, it may be too late to resurrect the industry. So why do these individuals keep pouring money into a so-called dying field? Well, as I’ve stated above, the two main factors that shape the relationship between media and its highly-affluent investors are: a) the desire for influence in the socio-political sphere, and b) the moral duty to use their wealth to promote democracy. Ultimately, the phenomenon of billionaires buying news sources is a double-edged sword. While certain media conglomerates may not survive without the financial aid, society must also question the production of news by potentially biased sources. As Thomas Jefferson said in 1786, “Our liberty depends on the freedom of the press, and that cannot be limited without being lost.” No institution nor individual should wield enough power to monopolize the dissemination of information, or the access to truth.
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[1] Miguel Castro, “Overview: The Pursuit of Mutually Assured Survival.” Alliance, Dec. 2017, pp. 37.
[2] Wolf Richter, “Here’s Why Billionaires Keep Buying Newspapers despite Them Being in a Death Spiral.” Business Insider, Business Insider, 21 Feb. 2018.
[3] Castro, pp. 37.
[4] Sydney Ember and Andrew Ross Sorkin, “Time Inc. Sells Itself to Meredith Corp., Backed by Koch Brothers.” The New York Times, The New York Times, 26 Nov. 2017.
[5] “Bloomberg Billionaires Index”, Edited by Christopher Cannon et al., Bloomberg.com, Bloomberg, 6 May 2018.
[6] Ember, 2017.
[7] Richter, 2018.
[8] Ibid.
[9] “The State as Media Regulator: Constraining Free Speech?” Media, Power and Politics in Australia, by Nicholas Economou and Stephen J. Tanner, Pearson Education Australia, 2008, pp. 48.
[10] Richter, 2018.
[11] Castro, 34.
[12] Carly Hare, “Now is the time to build a movement for philanthropic equity.” Alliance, Dec. 2017, pp. 5.
[13] Castro, 35.
[14] Castro, 37.
[15] Castro, 36.
[16] Castro, 36.
[17] “Philanthropists Who Own or Back Media,” Alliance, Dec. 2017, pp. 44.
[18] Miguel Castro, “Overview: The Pursuit of Mutually Assured Survival.” Alliance, Dec. 2017, pp. 37.
[19] Ibid.
[20] Ibid.
[21] Eric Schurenberg, “The Real Reason Rich Guys Buy Newspapers.” Inc.com, Inc., 6 Aug. 2013.
[22] Ibid.