How Bloomberg can still run Washington
At the age of 70, Michael R. Bloomberg nears an actuarial end that not even his $22 billion net worth can reverse. By giving him a measly 13 years of life expectancy, the law of averages has made the New York mayor acutely aware of time. In 2006, he installed a countdown clock in his mayoral headquarters that marked time until the end of his second term. As his third term commenced in 2009, Bloomberg escalated his war on time, putting a stopwatch to meetings. Was he racing the clock, or, as the co-inventor of the Bloomberg Terminal, did he think that a firmer grasp on life’s raw data would prolong his life?
Before he’s ushered to his reward, Bloomberg – whose current term as mayor ends at the close of 2013 – yearns to do something as grand as revolutionizing Wall Street, making billions, and running New York City government. Ordinary billionaires find this sort of psychic remuneration in philanthropy, but Bloomberg, a generous donor, is no ordinary billionaire. Philanthropy gives him a kick, but not the kick he craves. Back in 2006, Bloomberg’s special something looked to be a presidential campaign. He took foreign policy lessons from a centrist, priced the cost of the race at an affordable $500 million, and played the big-town flirt as he explained to one news organization after another how he didn’t really want to run for president – while reminding them what a splendid president he would make.
He didn’t run because he came to understand that he couldn’t win as a Democrat, a Republican or an independent. It’s for the best that he didn’t become president: His idea of governance is giving orders, as if he’s the people’s CEO. It’s also for the best that when the Obama administration shopped him to fill the vacancy at the World Bank, as its president, he declined the position because he didn’t want a boss, as New York’s Gabriel Sherman reported.
So until the CEO of the Earth slot opens, Mr. Mayor, I’ve got a terrific idea for the last act: Convince the Washington Post Co’s CEO, Donald E. Graham, that he should spin off his Washington Post division and sell it to you.
I say that as neither a Bloomberg lover nor a Bloomberg hater. I’ve written approvingly of Bloomberg’s business success, admiringly of his Bloomberg Businessweek, disparagingly of his Bloomberg View, speculatively of his Bloomberg Government, and acidly of his mayoral reign. But for reasons financial, historical – and psychological – the sale of the Post to the tiny billionaire would produce the best outcome for Post readers, the Graham family (which controls the Post), and Bloomberg’s ego (in that order).
Others have urged Bloomberg to buy the pauperized New York Times, the Financial Times, or the Wall Street Journal. Adding a newspaper to the company portfolio has supporters inside the Bloomborg. Even the top Borg muses about buying one, according to an anecdote reported by Gabriel Sherman. A few years ago, Bloomberg was having breakfast with a friend in Paris and said: “Do you think I could buy the New York Times?” The friend replied that he didn’t think the hotel sold copies, and Bloomberg said: “No, do you think I could buy the Times?”
But don’t ask Bloomberg about buying the Times now. “It’s not for sale,” Bloomberg barked in March, after a member of the Newsday editorial board inquired. “And why would I want to buy the Times?” Well, perhaps because, despite all its flaws, the Times is the best paper in the land and because you and your subordinates are forever blabbing about your ambitions to build the most influential news organization in the world?
Bloomberg may not need a newspaper, but he wants one for the same reason he didn’t need a cable-TV channel, a weekly business magazine, a free website, or an opinion outlet, but still wanted one of each: for the publicity. Bloomberg is in the business of leasing financial terminals, which one recent estimate claimed produces 87 percent of the company’s revenues. Bloomberg’s 1997 autobiography, Bloomberg by Bloomberg, defends the extension of the Bloomberg brand into other media as a way to lease terminals. “Name recognition improves access for our [Bloomberg terminal] salespeople,” he wrote. “Every bit of publicity helps; you never know which imprint makes the difference.”
But a Bloomberg acquisition of the Times would be a disaster. The Sulzberger family, which controls the New York Times, has built a unique church of journalism over its 116 years of ownership, even adding a Manhattan cathedral for worship a few years ago. But it’s Times journalists who are in charge of interpreting the sacred texts, not the management. In 2003, the newsroom snuffed its executive editor, Howell Raines, for thinking he was the boss of them. It’s hard to imagine the newsroom accepting the Bloomberg bridle without bucking.
The Times‘s editorial page poses greater problems: It ranges well to the left of Mayor Bloomberg’s very personal centrism and has routinely clashed with him over everything from his soda ban to his stop-and-frisk police policy. The page has strong views on foreign policy, while Bloomberg (and Bloomberg View) has almost none. The entire paper is just too hidebound – and I mean that in a good way – to do anything but reject Bloomberg ownership. Times readers are equally hidebound. Would they tolerate the Bloombergization of their paper the way Wall Street Journal readers tolerated Rupert Murdoch’s remake of that paper? Would Bloomberg buy the Times and then just leave it as is, when the whole point of buying something precious is to make it yours? I think not.
The Financial Times would be easier on Bloomberg’s digestion, something Bloomberg News Editor-in-Chief Matthew Winkler conceded to Gabriel Sherman. The FT‘s short and punchy approach to financial news parallels the comic tautness of Bloomberg News’s silly stylebook. The FT is strong in Europe, where Bloomberg could use help. But swallowing the FT would be a mere codicil to the Bloomberg legacy, as would buying the Wall Street Journal from Rupert Murdoch. The headline “International Business Media Conglomerate Buys International Business Daily” won’t excite many souls.
The Post Co’s sale of its Post newspaper division to Bloomberg, on the other hand, might not make much more noise, but as an unexpected event, it would make noise of a different quality. The paper is well known and respected around the world, even in places where people have never seen a copy: 90 percent of its online readership comes from outside the Washington area. Its business coverage, already saturated with Bloomberg News dispatches, is a blank slate upon which Bloomberg could write freely and claim intellectual ownership over.
First, of course, Bloomberg would have to convince Don Graham that he should sell. The paper means a lot to the Graham family, so it’s not a cinch. But the steady stream of bad business news coming out of the company is enough to persuade anybody to sell the newspaper division. Like most newspapers in the developed world, the Post is limping. In the first quarter of the year, its newspaper division reported an operating loss of $22.6 million; Post print advertising was down 17 percent; and Post daily circulation was down 9.8 percent (Sunday down 5.8 percent). Newsroom headcount has shrunk from a high of 900 to about 600 today. The whole company remains profitable, however, thanks to its diversification. It owns the Kaplan education outfit, television stations and a cable division, all of which remain in the black, so Don Graham needn’t sell the paper anytime soon to make his rent.
But not even a rich guy like Graham can shoulder losses forever, especially if they endanger the health of the greater company. He unloaded Newsweek in 2010 for $1 plus the assumption of millions in liabilities when he couldn’t stop the magazine’s cascading losses. Like Bloomberg, Graham, 67, has some tidying to do before he keeps his appointment with the actuarial table (about 16 years’ life expectancy in case you’re reading, Don), and securing the Post‘s future belongs at the top of the list.
The Graham-to-Bloomberg handoff makes historical sense if you track Post history back to 1933, when its playboy owner had driven it into receivership. Graham’s grandfather, Eugene Meyer, won the paper in a June 1 auction on the steps of the Washington Post building, when his lawyer bid $825,000. Like Bloomberg, Meyer was silly rich: His stock in Allied Chemical alone was worth about $650 million in today’s money, according to Merlo J. Pusey’s 1974 biography of Meyer, and it paid dividends, dividends he used to sustain the paper for decades before it became a moneymaker.
Newspapers have long been rich people’s things. William Randolph Hearst, Cornelius Vanderbilt IV, “Jock” Whitney, Richard Mellon Scaife, Joseph Allbritton, convicted felon Reverend Sun Myung Moon, Mortimer Zuckerman, Philip Anschutz, and other moneybags squandered personal fortunes on the folly of newspapers over the past century. They did so because they expected newspaper ownership to be a source of power and influence, not red ink and heartache.
Eugene Meyer bought the Post with a clear head and big pocketbook. He intended to run it as a business, and did, but he also intended to provide a public service at the same time. Even the competition thought highly of Meyer. Frank Waldrop, once editor of the Washington Times-Herald, told one historian: ”Eugene Meyer ran an honest newspaper and a literate newspaper, he did not run a popular newspaper.”
You can scoff at that idea, but Meyer largely succeeded in separating his private interests from the paper’s reporting. It’s a tradition that the current regime subscribes to, and one that should attract Bloomberg, who has sought to make his news outlets “free of any outside influence, and not tied to some hidden agenda” (his words). I’ve read widely from the Bloomberg media corpus, and with the exception of a few ponderous Bloomberg View editorials, I’ve yet to detect their master’s voice speaking. (Or when I do, it’s sotto voce.)
The same can be said of the Washington Post‘s news pages. Quarrel all you want with the Post‘s journalism, but it’s a great paper, worth preserving for several more decades. I can’t think of a billionaire’s pocket I’d rather pick than Bloomberg’s to make it happen. He’d be much more likely to extend the Meyer-Graham news values than David Geffen, Richard Mellon Scaife, Philip Anschutz or a Russian oligarch.
Consider the many points of affinity between Bloomberg and Graham: Both believe in “straight” news pages. Both are vigilant beyondists, David Brooks’s label for people who insist that their politics are beyond left and right. Bloomberg is the more accomplished beyondist: A lifelong Democrat, he ran for mayor in 2001 as a Republican and then became a registered independent in 2007 while still serving. You’d be hard-pressed to slip a piece of paper edgewise between the beyondism of Bloomberg View editorials and the Post’s. As previously mentioned, the Post already runs substantial Bloomberg News coverage in its business pages, and the two organizations formed a joint news wire in 2010. Bloomberg and Graham enjoy a friendly, towel-snapping relationship, as shown by Graham’s introduction (audio) of Bloomberg at a 2006 event. And just last month, Graham joined the Bloomberg “family,” marrying Amanda Bennett, an executive editor at Bloomberg News.
One loser in the transaction would be Katharine Weymouth, Don’s niece and current Post publisher, who wouldn’t be able to hand the paper over to a family member the way Meyer handed it over to Philip and Katharine Graham, and Katharine Graham handed it over to Don. A pity, for sure, but as a great man once noted, family companies that struggle to maintain the traditional family businesses end up becoming prisoners of those assets. The Washington Post Co can support the Washington Post for a long time, helping it evolve into whatever it needs to evolve into. But will a long time be long enough?
Just as the Washington Post name was worth seven times its physical assets when Eugene Meyer bought it, today’s Post is worth far more than its presses, buildings, delivery trucks, computers and furniture. If the many newspapers of the bankrupt Tribune Co (Los Angeles Times, Chicago Tribune, Baltimore Sun, Orlando Sentinel, etc.) are worth $623 million, the Post has to be in Bloomberg’s price range. He doesn’t mind spending large amounts on news organizations, having recently acquired the Bureau of National Affairs, the professional and government news outfit, for $990 million.
I’m not instructing Bloomberg to buy the Post as an act of charity but as a business proposition. For many inside and outside the Beltway, the Post means serious coverage of politics, the economy, government and foreign affairs. Combining the Post newsroom and name with Bloomberg’s news network (more than 2,200 editorial hands around the world), the Bureau of National Affairs (600 reporters, lawyers and editors), and the company’s other outlets would spawn an unstoppable news machine. Imagine the journalistic permutations: A beefed-up daily Post (more business than the Times, more politics than the Journal), a niche publication to counterattack Politico, a refashioned website to dominate the political and economic discussion, and a breakthrough Web-based TV news site. His terminal would overfloweth with quality news!
Great newspapers don’t happen by accident. They are acts of will, as the Ochs-Sulzberger family proved at the New York Times, Otis Chandler proved at the Los Angeles Times, Barney Kilgore proved at the Wall Street Journal, and the Meyer-Graham regime has proved at the Post. Purchasing the Post would give Bloomberg a chance to join this pantheon and seal his legacy. Few people care about the grand works of retired politicians. In a few years, we’ll have forgotten who was New York mayor between 2001 and 2013 and be fuzzy on the origins of the proposed ban on 32-ounce sodas. Trivia questions will start: “Was it Giuliani or Bloomberg who…” In 20 years the Bloomberg Terminal will carry no greater cultural resonance than the Xerox machine, and every penny Bloomberg ever donated to Johns Hopkins University will have been spent and faded.
Investing a chunk of his $22 billion fortune on the Post won’t make Mike immortal, but it will leave him well remembered. Hardly anybody remembers Eugene Meyer’s millions or his chairmanship of the Board of Governors of the Federal Reserve System or his World Bank presidency. They remember that he established the modern Washington Post.
I, for one, wouldn’t make a fuss if he observed company custom by renaming the paper the Bloomberg Post.
Disclosures: My employer, Thomson Reuters, competes directly with Bloomberg LP. My wife works at the Post. I was a Washington Post Co employee at its Slate division from the time the Post Co bought the site (2004) until I was let go (2011) with several other staffers. The company always treated me well. If this deal goes through, I expect a finder’s fee! Also, the actuarial table gives me a stinking 21 years to live. Send data about your expected life expectancy to Shafer.Reuters@gmail.com and kill yourself by following my Twitter feed. Sign up for email notifications of new Shafer columns (and other occasional announcements). Subscribe to this RSS feed for new Shafer columns.
PHOTO: New York City Mayor Michael Bloomberg, co-chairman of Mayors Against Illegal Guns, is pictured in front of the U.S. Capitol during a media event about new legislation to amend the background check system for guns, in Washington, March 15, 2011. REUTERS/Jason Reed