All the News That's Fit to Profit
By Shawn Healy
The fallout from Tuesday's revelations that Illinois Governor Rod Blagojevich presided over a pay-to-play scheme to enrich himself, his family, and his political supporters at the expense of taxpayers is wide-ranging, reaching as far as the largest newspaper in the Midwest, the Chicago Tribune.
As you may recall, the a financial adviser of the Tribune, since identified, engaged in negotiations with the Governor's Office over the potential sale of the Chicago Cubs and Wrigley Field. They sought assistance from the Illinois Finance Authority, and Blagojevich asked for a targeted purging of the Tribune editorial board in exchange. He focused specifically on those members pushing for his impeachment, and John McCormick allegedly stood front and center. Thankfully, although the Tribune continues with extensive layoffs, McCormick and the board were spared, at least for the time being.
Tribune CEO Sam Zell denies any direct pressure from Blagojevich, and Editor in Chief Gerry Kern said he and the newsroom he presides over were likewise immune. The paper was asked to hold stories about the federal investigation of the governor, and they at least partially obliged. One wonders if their reporting last Friday and again on Tuesday morning drove U.S. Attorney Patrick Fitzgerald to arrest Blagojevich and bring charges prematurely as their operations would be undermined from that point forward.
These developments raise several issues specific to the Tribune, but also of general concern as we speak of press freedoms nationally. The First Amendment protects freedom of the press, but it is by no means absolute, and instead faces constant challenge across the ages as issues like prior restraint, source anonymity, and libel enter the fray.
Prior restraint, or the preapproval of stories for publication, is generally frowned upon, with exceptions during times of war and perhaps other extraneous cases. It did not occur in this instance, at least not in its purest form, but the tensions between government authorities and a free press were certainly in play.
Source anonymity also played a role as the Tribune relied upon insider access to reveal the ongoing federal investigation, but it was never challenged as they probably didn't possess any information not already in the hands of the Feds.
Libel is also unlikely given that reporting on Governor Blagojevich, his Chief of Staff John Harris, and others potentially implicated by the investigation, are public figures. The 1964 Supreme Court case New York Times v. Sullivan raised to bar for law suits filed by government officials seeking a libel judgment, mandating that plaintiffs must show "actual malice," or prove that the statement was made with knowledge that it was false or with reckless disregard of whether it was false or not." Given the press release and affidavit provided by Fitzgerald, the Tribune is in the clear.
These constitutional staples aside, the broader issue of how the Tribune came to be implicated in this budding scandal warrants consideration. The Tribune's involvement with the Governor's Office is a product of its link to the media conglomerate of the same name, which in addition to newspapers, radio, and television stations, also owns the Chicago Cubs. In seeking to sell the latter on account of looming debt payments, the company was forced to "play ball" with a politician who was all-too-ready to deal.
The Tribune declared bankruptcy this week, and its dire financial straights are indicative of the industry as a whole. The debt-leveraged deal that Sam Zell presided over a year ago didn't help matters when revenues continued to crash, but newspapers have been on a downward trajectory for some time. As readers have migrated away from print to the Internet (or away from news consumption altogether), advertising revenues that pay the vast portion of the industry's bills failed to follow for the most part. True, online advertising has proliferated, but it is not nearly as lucrative and must compete with free sites like Craigslist in the realm of classified ads.
The general contraction of the economy has only escalated these trends, and it has affected newspapers far outside of Chicago. For instance, the venerable New York Times was forced to take a loan against the value of its iconic building to finance existing debt. Other newspapers, like Madison's Capitol Times and the Christian Science Monitor have become Internet-only vehicles. Home delivery of newspapers is also on the decline, with a rumor that Detroit's two major dailies, the Free Press and the News, will soon discontinue with this service.
We may be witnessing the extinction of print journalism as we know it, and this is arguably detrimental to democracy. True, many newspapers will move forward with an online presence, but with the economic model still broken, expect spartan staffs, excessive reliance on wire feeds, and a shift away from critical, yet expensive, investigative journalism that holds our public officials accountable.
My solutions to this tragic tale are few, for we live in unprecedented times. Further consolidation of the news industry, for better or for worse, is probably inevitable and may allow organizations to stay alive through economies of scale. A non-profit model like Pro Publica may emerge, subsidizing investigative journalism and featuring the best work compiled elsewhere. Perhaps philanthropists will enter the scene, purchasing papers and willingly operating at a loss with the public good top of mind.
A more likely scenario is for news organizations to mold an online model that is indeed profitable. Perhaps Apple's iTunes can stand as a guiding light, as the music sharing industry moved away from piracy to profit.
Whatever the outcome, savvy news consumers wait on the sidelines, hoping for the best, but witnessing the slow death of a daily friend we hold near and dear to our hearts. At the end of a trying week, at least the bankrupt Chicago Tribune emerged with its dignity in tact. When it's all said and done, let's hope we can say the same about the industry.
As you may recall, the a financial adviser of the Tribune, since identified, engaged in negotiations with the Governor's Office over the potential sale of the Chicago Cubs and Wrigley Field. They sought assistance from the Illinois Finance Authority, and Blagojevich asked for a targeted purging of the Tribune editorial board in exchange. He focused specifically on those members pushing for his impeachment, and John McCormick allegedly stood front and center. Thankfully, although the Tribune continues with extensive layoffs, McCormick and the board were spared, at least for the time being.
Tribune CEO Sam Zell denies any direct pressure from Blagojevich, and Editor in Chief Gerry Kern said he and the newsroom he presides over were likewise immune. The paper was asked to hold stories about the federal investigation of the governor, and they at least partially obliged. One wonders if their reporting last Friday and again on Tuesday morning drove U.S. Attorney Patrick Fitzgerald to arrest Blagojevich and bring charges prematurely as their operations would be undermined from that point forward.
These developments raise several issues specific to the Tribune, but also of general concern as we speak of press freedoms nationally. The First Amendment protects freedom of the press, but it is by no means absolute, and instead faces constant challenge across the ages as issues like prior restraint, source anonymity, and libel enter the fray.
Prior restraint, or the preapproval of stories for publication, is generally frowned upon, with exceptions during times of war and perhaps other extraneous cases. It did not occur in this instance, at least not in its purest form, but the tensions between government authorities and a free press were certainly in play.
Source anonymity also played a role as the Tribune relied upon insider access to reveal the ongoing federal investigation, but it was never challenged as they probably didn't possess any information not already in the hands of the Feds.
Libel is also unlikely given that reporting on Governor Blagojevich, his Chief of Staff John Harris, and others potentially implicated by the investigation, are public figures. The 1964 Supreme Court case New York Times v. Sullivan raised to bar for law suits filed by government officials seeking a libel judgment, mandating that plaintiffs must show "actual malice," or prove that the statement was made with knowledge that it was false or with reckless disregard of whether it was false or not." Given the press release and affidavit provided by Fitzgerald, the Tribune is in the clear.
These constitutional staples aside, the broader issue of how the Tribune came to be implicated in this budding scandal warrants consideration. The Tribune's involvement with the Governor's Office is a product of its link to the media conglomerate of the same name, which in addition to newspapers, radio, and television stations, also owns the Chicago Cubs. In seeking to sell the latter on account of looming debt payments, the company was forced to "play ball" with a politician who was all-too-ready to deal.
The Tribune declared bankruptcy this week, and its dire financial straights are indicative of the industry as a whole. The debt-leveraged deal that Sam Zell presided over a year ago didn't help matters when revenues continued to crash, but newspapers have been on a downward trajectory for some time. As readers have migrated away from print to the Internet (or away from news consumption altogether), advertising revenues that pay the vast portion of the industry's bills failed to follow for the most part. True, online advertising has proliferated, but it is not nearly as lucrative and must compete with free sites like Craigslist in the realm of classified ads.
The general contraction of the economy has only escalated these trends, and it has affected newspapers far outside of Chicago. For instance, the venerable New York Times was forced to take a loan against the value of its iconic building to finance existing debt. Other newspapers, like Madison's Capitol Times and the Christian Science Monitor have become Internet-only vehicles. Home delivery of newspapers is also on the decline, with a rumor that Detroit's two major dailies, the Free Press and the News, will soon discontinue with this service.
We may be witnessing the extinction of print journalism as we know it, and this is arguably detrimental to democracy. True, many newspapers will move forward with an online presence, but with the economic model still broken, expect spartan staffs, excessive reliance on wire feeds, and a shift away from critical, yet expensive, investigative journalism that holds our public officials accountable.
My solutions to this tragic tale are few, for we live in unprecedented times. Further consolidation of the news industry, for better or for worse, is probably inevitable and may allow organizations to stay alive through economies of scale. A non-profit model like Pro Publica may emerge, subsidizing investigative journalism and featuring the best work compiled elsewhere. Perhaps philanthropists will enter the scene, purchasing papers and willingly operating at a loss with the public good top of mind.
A more likely scenario is for news organizations to mold an online model that is indeed profitable. Perhaps Apple's iTunes can stand as a guiding light, as the music sharing industry moved away from piracy to profit.
Whatever the outcome, savvy news consumers wait on the sidelines, hoping for the best, but witnessing the slow death of a daily friend we hold near and dear to our hearts. At the end of a trying week, at least the bankrupt Chicago Tribune emerged with its dignity in tact. When it's all said and done, let's hope we can say the same about the industry.
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