Sometimes you get a bad king

You all know the joke (repeated in “Annie Hall”) about the two old ladies at the diner, where one says “The food here is terrible, I can barely eat it” and the other says “I agree, and the portions are so small!” That’s exactly how I feel about the New York Times. The paper can be unbearably pretentious, it employs MoDo and Frank Bruni, it botched its WMD reporting terribly, it created the whole Whitewater story out of whole cloth…and it makes me want to cry to think it might disappear!

There have been a couple of really good articles about the head of the Times, Arthur Sulzberger Jr. (“Pinch”), over the past few years, both titled “The Inheritance”, one in the New Yorker and one in Vanity Fair. Both quote Gay Talese saying of Pinch that “Sometimes you get a bad king.”

As you probably know, there is no record of serious papers in the United States being publicly owned. The Washington Post, New York Times, and, until recently, the Wall Street Journal are or were owned by the Graham, Sulzberger, and Bancroft families respectively. Pinch essentially inherited the paper from his father. And for all the hand-wringing about the inevitable death of newspapers, his poor business decisions are certainly a large part of why the paper is on death’s door. Michael Calderone summarizes the Vanity Fair piece pretty well:

Bowden makes his case by talking to those who know Sulzberger and running through a laundry list of past mistakes: buying back $1.8 billion worth of stock (that’s now junk); not diversifying enough (unlike the Washington Post buying Kaplan); passing up on investing in Google and Amazon; the $1.1 billion purchase of the New England papers (including the Boston Globe).

Make no mistake: if the newspaper industry were still doing well, some of these decisions would have been good ones. But it seems colossally stupid not to have hedged by investing in other areas rather than doubling down on the newspaper business. I wonder, though, if his doubling down on the newspaper business was really so different from the Big Three doubling down on SUVs or banks doubling down on CDOs and mortgage-backed securities. It’s tempting to think that the serious newspapers were doomed because they could exist only as long as the dynasties that ruled them kept producing effective monarchs. But maybe these hereditary monarchs aren’t really so different from the monarchs produced by our supposedly more meritocratic executive system.

That said, this quiz (from Arianna) comparing Pinch Sulzberger to George W. Bush is a classic.

You decide: is it W or is it Pinch? [Answers below]

1. Which of these men had a father who was considered stupid but is now thought to be a genius compared to his son?

2. Which of these men is currently on the defensive about his support for an incompetent woman in his office?

3. Which of these men may have to ask for the resignation of a subordinate because of a mounting scandal?

4. Which of these men appointed as his top deputy a loyal member of his father’s regime?

5. Which of these two men’s favorite TV series was “Star Trek: The Next Generation,” and even owned a watch with the inscription “Live Long and Prosper”?

6. Which of these men lists as his desert island must-haves a Bible, running shoes, fishing rod, and books?

7. Which of these men had a “defining moment” while on an Outward Bound trip?

8. Which of these men said that he decided to “recommit my heart to Jesus Christ” after a fateful walk on the beach?

9. Which of these men works out five times a week?

10. Which of these men works out six times a week?

11. Which of these men is reportedly referred to as “the nitwit” around the office?

12. Which of these men can’t stand it when people are late?

13. Which of these men spends an annual “Rambo” weekend out in the woods with friends?

14. Which of these men’s favorite dessert is pralines-and-cream ice cream?

15. Which of these men is the luckiest man on the face of the earth?

ANSWERS:

1: both 2: both (W for Miers, Pinch for Miller) 3: both (Rove/Miller) 4: both (Dick Cheney/Howell Raines) 5: Pinch 6: W 7: Pinch 8: W 9: Pinch 10: W 11: Pinch 12: W 13: Pinch 14: W 15: both

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26 replies
  1. 1
    Warren Terra says:

    Unless I’m missing a deliberate joke, the nickname (for whatever reason) is "Punch" (not "Pinch") Sulzberger

  2. 2
    Warren Terra says:

    As long as I’m picking nits, the single-page link for the New Yorker article is here. (I hate it when articles are split across pages, in part because I often take my laptop offline and read them later, away from the internet).

  3. 3
    DougJ says:

    Unless I’m missing a deliberate joke, the nickname (for whatever reason) is “Punch” (not “Pinch”) Sulzberger

    Punch was his father. He’s Pinch.

  4. 4
    Warren Terra says:

    Ah, I get it. I’ve read the words "Arthur "Punch" Sulzberger" so many times in my life that it never occurred to me that (1) there were actually two Arthur Sulzbergers or (2) the son of "Punch" Sulzberger would be called "Pinch" Sulzberger by anyone who wasn’t deliberately being a jerk (doing a quick search of the New Yorker article I see that indeed the nickname is used behind the younger Sulzberger’s back).

  5. 5
    Singularity says:

    Seriously, Warren? I don’t even follow NYT news and gossip and I knew that Pinch Sulzberger is Punch’s son. And that he is frequently called Pinch by people who are not trying to be "a jerk". While he may not like the nickname, it is in common usage.

  6. 6
    mellowjohn says:

    both my hometown papers have filed for bankruptcy – the tribune last fall and the sun-times just today. it could be argued that both were ruined (especially the sun-times) by right wing bozos (sam zell, who owns the tribune and conrad black, who used to own the sun-times).

    if the ny times and the wapo go under (and god knows i’ve got my issues w/ both!), my great fear is that the only newspapers left going will be rags bankrolled at a loss by loons like rupert murdoch or sun yung moon.

  7. 7
    jlo says:

    Just like a lot of old dinosaurs staggering around in 2009 it is old and ready to die. I’ll be glad when I can think nostalgically about it rather than spitting blood at it while I read another news warp.

  8. 8
    DougJ says:

    if the ny times and the wapo go under (and god knows i’ve got my issues w/ both!), my great fear is that the only newspapers left going will be rags bankrolled at a loss by loons like rupert murdoch or sun yung moon.

    I agree. I find a WaPo-less, NYT-less future terrifying.

  9. 9
    Brachiator says:

    And for all the hand-wringing about the inevitable death of newspapers, his poor business decisions are certainly a large part of why the paper is on death’s door.

    It’s not about poor business decisions. The fundamental model which supported newspapers is changing, and no one knows how to respond. For example, on the other side of the pond, the Times (London) reports that "Advertising slump leaves UK local papers in crisis."

    A group of 18 local newspapers in Warwickshire and Worcestershire is at risk of closure after the family-controlled parent company became the first significant newspaper group to descend into administration[bankrupcy]…..Observer Standard’s failure demonstrates the crisis in Britain’s local newspapers, all of which are suffering falls in advertising of up to 40 per cent. As a publisher of free newspapers, Observer Standard depended entirely on advertising for its £9 million annual revenue and was hit hard when property advertising collapsed.

    Other UK newspaper groups are doing even worse. But it is unfortunately typical that an industry doesn’t know how to expand or diversify successfully. The railroad barons knew about trains, not about trucking or airplanes. And although google and amazon seem like obvious bets in retrospect, if these companies had invested in AOL and yahoo, they would still be in trouble.

    And CBS, Sears and IBM invested in the early online service Prodigy, which suffered the fate of many pioneers, early promise followed by a unpleasant demise.

    both my hometown papers have filed for bankruptcy – the tribune last fall and the sun-times just today.

    Yeah, the newspaper deathwatch is painful to watch.

    The company listed assets of $479 million and debts of $801 million. While the Sun-Times has taken several steps to reduce costs, “the significant downturn in the print advertising environment that has affected newspapers across the country has continued to severely impact us,” the chairman, Jeremy L. Halbreich, said. “Unfortunately, this deteriorating economic climate, coupled with a significant, pending I.R.S. tax liability dating back to previous management, has led us to today’s difficult action.”

  10. 10
    calipygian says:

    if the ny times and the wapo go under (and god knows i’ve got my issues w/ both!), my great fear is that the only newspapers left going will be rags bankrolled at a loss by loons like rupert murdoch or sun yung moon.

    If I understand the relatively short history of the newspaper industry, that has pretty much been the way newspapers have been run.

    Do you REALLY think that William Randolph Hearst is somehow better than Murdoch? Or Moonie Man any better than the hyper partisan people who ran papers that were really fronts for political parties in the 19th Century?

    Hearst started a war, ferchrissakes! Even Rupert hasn’t done that.

  11. 11
    DougJ says:

    It’s not about poor business decisions. The fundamental model which supported newspapers is changing, and no one knows how to respond.

    If the Times corporation had an extra couple billion, they’d have a better shot of riding this out til if and when a new business model arises.

    These aren’t like normal businesses. Can you think of other businesses where people talk about running them via an endowment?

  12. 12
    tammanycall says:

    I don’t know Pinch (or Punch) but it seems like there’s a desire amongst journalists to lay the decline of the newspaper industry at his feet. Unless he secretly owns craigslist, that’s ludicrous. And those articles are written like meangirl celebrity profiles, where a pseudo-jaundiced reporter talks shit about an actor for 6 pages after she probably kissed his ass for two days.

  13. 13
    DougJ says:

    And those articles are written like meangirl celebrity profiles, where a pseudo-jaundiced reporter talks shit about an actor for 6 pages after she probably kissed his ass for two days.

    I thought the VF piece was fair. I agree the New Yorker piece was mean-spirited.

  14. 14
    Brachiator says:

    @DougJ:

    If the Times corporation had an extra couple billion, they’d have a better shot of riding this out til if and when a new business model arises.

    Uh, no. The LA Times used to be the biggest daily in terms of ad lineage and one of the most profitable newspapers, and they began losing money bigtime even before the latest round of financial and editorial mismanagement. New business models don’t "arise," they have to be created by savvy business people. The LA Times, again, was founded in 1881, but kinda loped along under General Otis until Harry Chandler (who knew circulation like nobody’s business) came along, married the boss’ daughter and oversaw the paper’s dominance in the Southern California market.

    Newspapers and magazines are all feeling the heat, which is getting extra crispy in the current economic downturn. Bushels of money won’t save them this time around.

    These aren’t like normal businesses. Can you think of other businesses where people talk about running them via an endowment?

    You mean, like some sports franchises? WAPO, the NYT and other organizations may not always be run like "normal" businesses, but they are certainly failing like normal businesses.

  15. 15
    Lavocat says:

    Nah. IMHO, the NYT outlived its usefulness several Friedman Units ago. I’ll be happy to see it go.

  16. 16
    Comrade Desert Hussein Rat says:

    @calipygian:

    Hearst started a war, ferchrissakes! Even Rupert hasn’t done that.

    Apparently, you slept through 2002-2003.

  17. 17
    mistermix says:

    @Brachiator:

    Yes, the business model is flawed, but DougJ is right that the moves that the NYT made accelerated their demise.

    Compare the NYT (and LAT/Tribune, and McClatchy) with Gannett, which is sucking wind but not in imminent danger of collapse. All of them are facing a changing market, but Gannett didn’t take on a shit-ton of debt, so even though it isn’t doing well, it’s not facing bankruptcy.

  18. 18
    SpotWeld says:

    5. Which of these two men’s favorite TV series was “Star Trek: The Next Generation,” and even owned a watch with the inscription “Live Long and Prosper”?

    I’m rather glad that, that one wasn’t W.
    I’m sure I could handle him being a closet geek… I’d seriously have problems with my understanding of how the world works.

  19. 19
    AnneLaurie says:

    Hearst started a war, ferchrissakes! Even Rupert hasn’t done that.

    Ssssh! We don’t want Rupert feeling ‘competitive‘, do we?

    CDHR is right, though — Murdoch, and Sulzberger/Miller, deserve partial credit for enabling W’s Big Middle East Adventure. Since Hearst overestimated his own role in starting the Spanish-American War, I think our modern Press Overlords deserve just as much (dis)credit as their storied forebear when it comes to pouring lives & treasure down military sinkholes.

  20. 20

    .
    Is it dead, yet? Who cares?

    When I was a very little NY’er, there were a dozen dailies in NYC. (There had been 29 at one point, throughout the 5 Boroughs.) The suburbs, TV, new technology and a refusal to accommodate the needs of their loyal, hard-working, highly-skilled workforce whittled that down to just four newspapers published every day in or near the Big Apple.

    One of those papers, the oldest one, once a liberal bastion, is now owned by Rupert Murdoch, and smells like it. One is a suburban paper that has snuck in from Queens under the arms of Manhattan’s diminishing number of blue-collar workers. One tabloid remains as a bastion of good old tough NY street journalism, though it has trouble following its’ own market, between the yuppies and the non-English speakers that are overwhelming it.

    That leaves the NY Times, which never troubled itself to represent the real New York City. And while everybody gets the Sunday Times for the magazine, the book review, the Arts & Leisure section, the classifieds, the fishwrap and the kitty litter, nobody reads it during the week. It won’t be missed.

    Small well-run local papers will survive if they remain small, local and well-run, in print or just online. They are an invaluable resource and they need to adapt to the Web. I hope they do. That will require owners who care more about news than money, as they will never get rich on real journalism.

    As for the rest, who cares? That’s what we have BLOGS for!

    Speaking of which, and the security of our national food supply; pistachio, anyone?
    .

  21. 21
    someguy says:

    , his poor business decisions

    I think the wingnuts unrelenting efforts to stigmatize the paper and destroy its market probably haven’t helped much, and have in fact wrecked its prospects to become a more national paper.

  22. 22
    Ned Ludd says:

    New York magazine did a story on the New York Times last fall. The company has been spectacularly mismanaged. First, the full cost of the stock buybacks was $3 billion:

    First, there was Sulzberger’s decision to use the paper’s excess cash flow when it was making money in the nineties to buy back stock—a practice meant to improve investor confidence—instead of acquiring new properties that could have hedged against print losses. In the last decade, the Times bought back $3 billion of its own stock—more than the company’s present market value… (Sulzberger himself has acknowledged that the buybacks were “the stupidest thing” he’s done.)

    Sulzberger spent another $1.5 billion in newspaper and TV acquisitions since 2000. Their new headquarters cost $500 million (the old headquarters on 43rd Street was flipped by the new owner after 3 years for a $350 million profit). On top of this, Sulzberger increased the dividend 31% in 2007, leading to an incredible situation:

    In the last four quarters, the paper has made less money than it has paid in dividends, and debt-ratings agencies like Moody’s and Standard & Poor’s are threatening to downgrade the company to “junk bond” status, which would paralyze the paper’s ability to borrow money. (emphasis added)

    The New York article notes that $25 million of the 2007 dividend went to the Ochs-Sulzberger trusts (the central trust is worth between $270 and $300 million). There are 27 members in the family’s fifth generation, so this was a nice $925,000 windfall for each member – at a time when a responsible publisher would have been looking for ways to save money, not spend it.

  23. 23
    Mike P says:

    Here’s another piece from New York magazine from last fall that deals more with the extended Sulzberger-Ochs family. It’s worth a read.

  24. 24
    Ned Ludd says:

    Just off the top of my head, the billions that Sulzberger wasted could have been used to:

    • Invest in Google (pre-public), when the Times was offered the chance.
    • Buy MySpace. Murdoch bought it for $580 million in 2005 and signed a $900 million revenue deal with Google in 2006, earning back his investment and then some.
    • Buy Facebook or Flickr.
    • Buy Digg or Reddit or build their own news aggregator.
    • Buy Blogger and profit from online ads on all those blogs.
    • Create their own competitor to Craiglist (like executive editor Max Frankel suggested in the mid-1990’s) or Yelp. In the tech industry, sometimes you have to cannibalize your own product (in this case, the Times classified ads) to fend off a competitor and keep your market share.

    There’s also the lucrative partnership with Amazon.com that they passed on that wouldn’t have cost them anything except possibly some lost ad revenue from Barnes & Noble.

    The Times would link all the titles reviewed in the paper’s prestigious Sunday Book Review section, ordinarily a money drain, to the online bookseller and receive a percentage on every book sold. “We could have made the Book Review into a big source of revenue,” [CFO Diane Baker] recalls. Baker knew that Amazon.com planned to eventually sell everything under the sun, to become the first digital supermarket. Not only would the deal have produced revenue from book sales, it would also have cemented a partnership with a tremendous future.

    The Times could have used its billions to diversify (like the Washington Post did when it bought Kaplan), expand reporting, cut prices (ad or subscription), or just hoard money since they knew the Internet was going to disrupt their business. As other papers suffered, a well capitalized New York Times, sitting on cash, could have had lots of opportunities to bargain hunt or just let weaker papers die and be one of the the last papers left standing.

    Instead, Sulzberger decided to spend billions on stock buybacks; to build a gleaming new skyscraper with a “handsome grove of birch trees planted in its soaring atrium” and a “façade [that] rises into the clouds”; and to borrow money to pay incredible dividends that filled the coffers of the Ochs-Sulzberger family’s trusts.

  25. 25
    Halteclere says:

    An extended family drain on a company’s bottom line? That is so 1940’s!

    Now in its third and fourth generations, the Disston family was large and had many members depending on stock dividends from the privately-owned corporation for income and maintenance of their comfortable lifestyles. On the right are two Disston family homes from the 20th century. The college-educated youngest son of Henry Disston, Jacob (University of Pennsylvania Class of 1883), lived in the home in the upper photo. Below that is the home of William D. Disston, grandson of the founder, and once the company president. Dwindling profits and the need to keep paying dividends to the family forced marketing and cost-cutting decisions that would prove detrimental to the long-term health of the company. One area that was neglected for decades was capital investment in the factory. Much of the equipment on the line had been in use since the 1880’s. It was old, inefficient, and overworked. By some accounts, nothing was being spent to do more than the most basic maintenance on the factory.

    The Disston company was the industry leading manufacture of hand saws since before the Civil War. But Disston did not adapt to new, revolutionary technology – specifically the wide adoption of electrical tools.

    The demise of Disston was not detrimental to the building industry because its product line was replaced with newer, better equipment. But I’m concerned that the demise of the news paper industry will be detrimental, because there is no alternative replacement emerging. How many blogs have the capability to do original investigative reporting? How many blogs solely function as an aggregator of various news reports to suss out the complete story? And how will these second kind of blogs continue to provide value if newspapers go away?

  26. 26
    Gary Farber says:

    "You all know the joke (repeated in ‘Annie Hall’) about the two old ladies at the diner, where one says ‘The food here is terrible, I can barely eat it’ and the other says ‘I agree, and the portions are so small!’"

    Actually it’s an old Catskills resort joke, rather than about a diner. This makes a small difference, because traditionally the portions at those places were so large.

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