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By the Project for Excellence in Journalism

For years, journalists have debated the efficacy of different ownership models for the media. First, critics bemoaned the loss of local control, as entrepreneurs like William Randolph Hearst or E.W. Scripps began to amass papers in different cities.

At the end of the 20th century people began to worry about the trend toward public ownership. Not only were such companies not tied to community, they were now beholden to the demands of Wall Street, where the value of the product a company made was purely a matter of money. Making bolts would be measured the same way as creating information that helped forge communities. The market was amoral.

The defenders of where the news business was going said such concerns tended to romanticize the past and oversimplify the present. There were lousy local owners and good chains, they argued first. And there were lousy private chains and good public ones, they argued later. In any case, private companies still had to borrow capital from banks and other financial institutions, and thus were not fully insulated from the financial pressures public companies faced. Those arguments were hard to refute.

The reality was that when media companies made the move to public ownership in the latter part of the 20 th century — newspapers headed that way in the 1970s — they were so profitable by and large that they imagined they were immune from many of the pressures other industries felt. By the end of the century, that insulation had begun to wear away. There were other even more glamorous ways to invest, and the profitability of traditional media was coming from managing costs, not simply counting rising revenues.

A growing number of leaders in journalism, such as Robert Kaiser and Leonard Downie of the Washington Post, warned that only a particular kind of a public ownership was safe — a complex two-tier stock arrangement that allowed public ownership but kept actual control in the hands of a family. The Washington Post operates that way. So does the New York Times.

But by 2005 there were more doubts. The Chandler family that once owned Times Mirror had that kind of elaborate two-tier stock structure, and a family revolt still led the company to be sold. In 2005, The New York Times was facing questions about its family stewardship. The Washington Post Company was now making more than half its revenue outside journalism.

But what really was fueling doubts was that institutional investors had forced the country’s second largest newspaper chain (by circulation) to put itself up for sale. And the chain, Knight Ridder, had been one of the most aggressive cost-cutting companies in the industry, to a degree that many journalists in the company felt had damaged its papers without protecting them from Wall Street scrutiny.

In 2006, discussions that had once been limited to university seminars had begun to be held in other quarters, such as major philanthropies and chambers of commerce. Were there yet other economic models, at least for owning the local newspaper? Should journalism be funded by philanthropy? Should civic interests, willing to accept smaller financial returns for the good of their towns, step in? Could some kinds of journalism, such as investigative, be funded by private philanthropy? (The Center for Public Integrity is one such example, but other models involving more prominent investigative reporters are under discussion.) Each of the new options presents its own problems, not the least of which is the agendas of the potential funders. But heading into 2006, there was more worry that the publicly traded corporation may not be positioned to address the problems of journalism to the satisfaction of society.

In the meantime, the debate over bigness and consolidation continued. Viacom broke into two companies, both still large, but organized by properties in similar businesses. Time Warner AOL, prodded by the dissident shareholder Carl Icahn, considered splitting up after the merger that created it proved disastrous.

And the push for more consolidation in broadcasting and newspapers continued to be frozen by uncertainty at the Federal Communications Commission. The commission had badly overreached in its efforts at relaxing ownership restrictions under the chairmanship of Michael Powell, who left the agency in March 2005. The new chairman, Kevin Martin, appeared to be moving more carefully, but heading generally in a similar direction. It was possible, according to FCC watchers, that the rules might relax again by the end of 2006.