By DNYUZ
There’s an old saying about the news business: If you want to make a small fortune, start with a large one.
As the prospects for news publishers waned in the last decade, billionaires swooped in to buy some of the country’s most fabled brands. Jeff Bezos, the founder of Amazon, bought The Washington Post in 2013 for about $250 million. Dr. Patrick Soon-Shiong, a biotechnology and start-up billionaire, purchased The Los Angeles Times in 2018 for $500 million. Marc Benioff, the founder of the software giant Salesforce, purchased Time magazine with his wife, Lynne, for $190 million in 2018.
Each time, the newsrooms greeted their new owners with cautious optimism that their business acumen and tech know-how would help figure out the perplexing question of how to make money as a digital publication.
But it increasingly looks like the billionaires are struggling just like nearly everyone else. Time, The Washington Post and The Los Angeles Times all lost millions of dollars last year, people with knowledge of the companies’ finances have said, after considerable investment from their owners and intensive efforts to drum up new revenue streams.
“Wealth doesn’t insulate an owner from the serious challenges plaguing many media companies, and it turns out being a billionaire isn’t a predictor for solving those problems,” said Ann Marie Lipinski, the curator of the Nieman Foundation for Journalism at Harvard University. “We’ve seen a lot of naïve hope attached to these owners, often from employees.”
The losses may have the most immediate impact at The Los Angeles Times, where journalists are bracing for bad news. Kevin Merida, the newspaper’s widely respected editor, announced last week that he was resigning, a decision that came after tension with Mr. Soon-Shiong over editorial and business priorities, according to two people familiar with the matter.
In the middle of last year, The Times was on track to lose $30 million to $40 million in 2023, according to three people with knowledge of the projections. Last year, the company cut about 74 jobs, and executives have met in recent days to discuss the possibility of deep job cuts, according to two other people familiar with the conversations. Members of The Los Angeles Times union have called an emergency meeting for Thursday to discuss the possibility of another “major” round of layoffs: “This is the big one,” read the email to employees.
A spokeswoman for Mr. Soon-Shiong declined to comment on specific financial figures for The Los Angeles Times but said in an email that company had “a significant gap between revenue and expenses,” even with the layoffs and other cost-saving measures from last year.
She said that his family had invested “tens of millions of dollars” each year since acquiring The Times in 2018. “They are committed to continuing to invest,” the spokeswoman, Jen Hodson, said in a statement. “But relying on a benevolent owner to cover expenses, year after year, is not a viable long-term plan.”
Mr. Bezos hasn’t fared much better at The Washington Post. Like many news organizations, The Post has struggled to hold onto the momentum it gained in the wake of the 2020 election. Sagging subscriptions and advertising revenue led to losses of about $100 million last year. At the end of the year, the company eliminated 240 of its 2,500 jobs through buyouts, including some of its well-regarded journalists…
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