Investing, Philadelphia Style
Land ownership once was the only practical form of savings, until banking matured in the mid-19th century. Philadelphia took an early lead in what is now called investment and still defines a certain style of it.
Customs, Culture and Traditions
Abundant seafood made it easy to settle here. Agriculture takes longer.
The city changes.
The Philadelphia Inquirer had a new, local, management. We wished it well.
Brian Tierney, the then-new CEO of the Philadelphia Inquirer -- and Daily News -- recently addressed the Business Roundtable of The Union League. He's quite a peppy fellow, but unlike most fast-talking salesmen, appears to avoid slanting the truth in his reporting about his new job. He fired a lot of facts at the breakfast group in fifteen minutes, and in retrospect touched on several important issues.
First of all, corporate control. Because the New York Stock Exchange for years prohibited dual classes of ownership, most major newspapers listed their stock elsewhere rather than give up the tight corporate control by minority management. That seems like an unreasonable position at first; the sort of undemocratic tyranny that most editorialists would reflexly criticise. However, Knight Ritter, the former owner of the Inquirer, surrendered to high principle and listed on the NYSE by having a single class of stock. Mr. Tierney didn't explain just how this caused the newspaper chain to lose money, but was cited as an example of the reasons why the newspaper was changed to a privately held arrangement in which the shareholders agree not to sell for five years, and then give the right of first refusal to other members of the group. We'll have to wait for the passage of time to judge what the arguments are and their merits. It's apparently linked to another agreement with more intuitive reasonableness; the stockholders agree not to interfere with the journalism. We'll see in time whether this arrangement leads to journalistic integrity, or whether it leads to one of those famous uproars where an eminent editor lets it go to his head, and gets fired amidst a loud chorus of criticism from the editorial pages of other newspapers.
|New York Stock Exchange|
And then there is the issue of unionism. Some 2000 of the 2600 employees of the Inquirer are members of some union, and this is the main source of the famous liberalism of the media. The corporations which own newsmedia get trapped into the position of proclaiming their concern for the rights of the working man so frequently that they cannot escape it in their own labor negotiations. In the case of the Inquirer, this tendency led to the conferring of full sick pay to the employees, for 42 weeks a year. While this provision is really intended to be a generous provision for extended rehabilitation from medical catastrophes, it leads to some flagrant abuses from time to time, grimly defended by a rather embarrassed union lawyer. The Inquirer was losing money, and needed to lose some more to revive its position by investing in the future. No doubt there was some significant posturing by both sides when these contracts were re-negotiated by the new management. Ultimately, the fairness of the labor agreements, union or otherwise, will be judged by whether the newspaper is able to attract and retain outstanding employees. If not, it will not matter how fair the contracts appear to be.
Both television news and newspapers are slipping. Perhaps that is temporary, perhaps it does not greatly matter what medium delivers our information to us. People under the age of 30 seem to be most distracted by other amusements, and it is anybody's guess whether they will return to the news as they grow up. But one central fact about newspapers emerges. The Inquirer employs 460 journalists and pays $3 million a year to the Associated Press and other sources. The nearest competitor is KYW, which has 38. Whatever you may think about their viewpoints or the nature of the media, this is the main news collection agency in the region by a very large margin. News is created by reporters. If you don't believe that, just watch how the papers shrink during the summer and long holidays. We wish the new owners well, hope they make a ton of money, and hope they don't let success go to their heads.
|Posted by: Auntie Iris | Feb 17, 2014 9:06 PM|