PrintApril 22, 2008
Rupert Murdoch puts the squeeze on Pinch Sulzberger
Rupert Murdoch, fresh off buying of Wall Street Journal, launches another blow against the New York Times. Murdoch's News Corporation is in a deal to purchase Newsday from the Tribune Company.
Newsday is a paper published for Long Islanders, who constitute a particularly important market for the New York Times. We can expect Murdoch to pour further resources into this battle with Pinch Sulzberger for publishing dominance in America. Readers can expect beefed up coverage in Newsday of local, national, and world news, and sports (a Murdoch specialty). Advertisers can expect Newsday to offer prices designed to lure them away from the Times. Because the paper will be part of a joint venture with the News Corp-owned New York Post, there will be cost savings and the ability to offer advertisers very wide coverage in the New York area. Should the Newhouse family decide to sell the Newark Star-Ledger, as they have sold other newspapers, Murdoch could surround the Times with competitive newspapers expanding their coverage as the Times downsizes.
The Sulzberger family will rue the day that it allowed Pinch Sulzberger to become publisher. He has allowed his liberal proclivities to dominate the direction of the corporation, and has made a series of business and investment blunders that have drained resources from the company just as it desperately needs them to cope with the challenges of the digital age. And now the challenges of a reinvigorated Newsday in the metropolitan New York area, and the Wall Street Journal in the national general interest national newspaper will further squeeze revenues for the Times.
An arrogant and incompetent leader is now reaping what he has sowed. A few decades ago, the Sulzbergers were vastly wealthier and more influential than Rupert Murdoch, publisher of a daily newspaper in Adelaide, Australia. Within the lifetime of one man, particularly since Pinch Sulzberger took the reins, the situation has dramatically reversed. Shareholders of the New York Times Company, reeling from a first quarter loss, have a lot more to worry about today.
Meanwhile, the Tribune Company is in real trouble, after being purchased mostly with borrowed money by Sam Zell, legendary Chicago real estate magnate. They could go under if they don't sell off a few more assets before the end of the year (e.g. Cubs). Advertising revenue is dropping faster at their papers than any other chain (10% annual rate).
Meanwhile, the Tribune Company is in real trouble, after being purchased mostly with borrowed money by Sam Zell, legendary Chicago real estate magnate. They could go under if they don't sell off a few more assets before the end of the year (e.g. Cubs). Advertising revenue is dropping faster at their papers than any other chain (10% annual rate).
