It has not been the kindest of times for American Jewish entrepreneurs. Sam Zell, the Chicago-based tycoon who a year ago rescued the Tribune group, publishers of the LA Times, the Chicago Tribune and Newsday, has found that running newspapers in the era of the internet and 24/7 news channels is a very different game to buying up distressed property and selling it on for big profits in a rising market.
In an entirely separate incident, Bernard Madoff, regarded as one of the safest pair of hands on Wall Street, confessed to the world’s largest ever known fraud, a $50(£32.5)bn investment scheme, losing billions for a number of famous Americans.
The notables included, as the Wall Street Journal noted, Mort Zuckerman, president of the Committee of American Jewish Organisations, the Elie Wiesel Foundation and a charity run by movie director Stephen Spielberg.
The Sunday Telegraph unhelpfully pointed out that Madoff and his wife Ruth are fixtures on the “so-called Jewish circuit” in New York and Florida and gave millions to “education groups and Jewish charities”.
As far as the media industry is concerned, the failure of the Tribune group has been of more interest. When Zell took over he made much of his ambition to control the newspaper of his childhood, the Chicago Tribune, once run by Colonel Robert McCormick — a notorious isolationist who was not known for his friendliness to the city’s Jewish community. Similarly, Zell’s presence as publisher of the fiercely WASP LA Times was also seen as likely to bring about change.
Zell’s period as a newspaper publisher, however, has been marked by turmoil as he has sought to cut costs in the face of union resistance. I became aware matters were reaching breaking point recently when I received an email from Johanna Newman, a stalwart of the Washington bureau of the LA Times, who told me she was leaving after Zell decided he would amalgamate the Washington bureaux of the three papers.
The short-lived Zell ownership of the Tribune group provides a strong metaphor for the problems of America’s print media. Across the USA (as in the British regions), titles are suffering, with 15,000 jobs across 1,400 titles lost over the last year. But what is most alarming is the injury inflicted on some of the big-city titles controlled by powerful publishing families. Most seriously perhaps, the New York Times, which carries more Middle East and Jewish news than any title in the world outside Israel, is struggling.
As Sam Zell filed for bankruptcy, crushed by $13bn of debt and falling circulation at all his titles, NYT boss Arthur Ochs Sulzberger, scion of the German Jewish families which created the modern NYT, sought a $225(£146)m sale and leaseback of its $600m designer headquarters, as it faced deadline payments on its $1.1(£0.7)bn of debt. Sulzberger, who began as a reporter, has left the NYT’s huge reporting staff intact, but a 1,200-strong newsroom may not make economic sense in these times of falling circulation.
Worse, the NYT now has the Wall Street Journal challenging it directly. Since Rupert Murdoch took control last year, he has placed news on the front page and sought to make it a real alternative to the NYT. The Financial Times noted that if the “Grey Lady” is to survive, it will have to dismantle the empire built by Sulzberger’s predecessors, including such assets as the Boston Globe.
America’s great newspaper dynasties have built up their titles over more than a century. But a combination of new media and the credit crunch now threatens their survival. Unfortunately, Jewish media owners find themselves in the firing line.
Alex Brummer is City Editor of the Daily Mail
