Historically, the news business in both print and on TV served as a “loss leader” for corporate owners, a way to accumulate some social prestige and do some good for the larger community rather than turn a profit. The New York Times has a story on how three billionaires are losing fortunes learning that in many ways that can still be the case. Jeff Bezos, Dr. Patrick Soon-Shiong, and Marc Benioff all made big journalism acquisitions over the last decade and change, and they’ve both sunk a lot more money into them since.
Bezos purchased The Washington Post in 2013 for roughly $250 million, and in last year alone the legendary paper reported losses of $100 million, going on to make drastic cuts to staff in a wave of buyouts. In a 2018 interview, Bezos is quoted as describing his purchase of the Post as being motivated by its societal importance, while at the same time he hoped to turn it into profitability. “I said to myself, ‘If this were a financially upside-down salty snack food company, the answer would be no,'” he said, contrasting the company to something with a negligible positive impact on society.
Dr. Soon-Shiong branched out from the biotech business in 2018, buying The Los Angeles Times for $500 million. Like Bezos, he’s since gotten a firsthand lesson in the harsh realities of the journalism business, with estimated losses last year falling somewhere between $30 million and $40 million. As with the Post, jobs have been cut as well, and a one-day strike was called by the Los Angeles Times Guild in response. A spokesperson for Dr. Soon-Shiong admitted to “a significant gap between revenue and expenses” in an email to the press and cited “tens of millions of dollars” every year invested by the Soon-Shiong family.
Finally, Salesforce founder Marc Benioff has had a similar experience since buying Time magazine for $190 million in 2018. The magazine lost a reported $20 million over the course of 2023, and is said to be weighing cost-cutting measures of its own. But Benioff painted a sunnier picture in his press statement, alluding to the magazine’s new CEO and its recent decision to name Taylor Swift its Person of the Year:
“We are fortunate to have an amazing new C.E.O., Jessica Sibley, and she has done an incredible job restructuring the company over the last year. We have never had a bigger year, including Taylor Swift, driven by Jessica’s vision for the company.”
Billionaire owners of news organizations aren’t always doomed to perpetual losses, though. Red Sox owner John W. Henry has owned The Boston Globe since 2013, when he bought it off The New York Times Company for $70 million, and it’s reported to have been profitable for the last several years. But there are clearly better ways than newspapers and magazines to make money if that’s the primary goal.