Media Curmudgeon

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August 03, 2007

Family-Owned Media

Four family-owned media companies are in the news: The Bancrofts and the Wall Street Journal, the Murdochs and News Corp., the Redstones and Viacom and CBS, and the Steinbrenners and the New York Yankees and the YES cable network. Deals and possible deals are making headlines, the biggest of which, of course, is super media mogul Rupert Murdoch’s deal to buy Dow Jones & Co. and the Wall Street Journal.

There are two family-owned media company that are not making current headlines, but should be on the above list, the Sulzbergers and the New York Times and Dolans of Cablevision.

The Bancrofts, who agreed to sell the Wall Street Journal to Murdoch, were not involved in managing the company whose shares they controlled. They were third and fourth generation non-operating people who inherited the great newspaper and other assets but left strategy and management to others. It’s not too far fetched to suggest they didn’t earn or deserve their inherited wealth, but on the other hand, who does? Many of the family seem to have been arrogant, prideful slackers who had more money than brains, but finally realized they had better take Murdoch’s generous offer for a newspaper that during their careless absentee ownership had failed to develop a viable sustainable strategy for a new media era.

On the other hand, the Sulzberger family both controls and manages the New York Times, and its current family manager, Arthur, Jr., doesn’t seem to have the management expertise, toughness, brilliance, or strategic vision to keep America’s top newspaper brand reasonably profitable in the new media era. However, Arthur seems like a genius compared to the stupid, arrogant, awful James Dolan, Cablevision's CEO and son of founder Chuck Dolan. Like the Sulzbergers, the Dolans both control and manage their media empires, and in both cases the kids aren’t doing the family fortunes any good. There might be a lesson here, but is Rupert Murdoch, Sumner Redstone, or George Steinbrenner listening?

Murdoch is the smartest strategist of them all, which he proved with his latest coup, the Wall Street Journal, but it looks like he’s going to bring his son James along to eventually inherit and run his media empire. James might be smarter, tougher, and a better strategist than Arthur Sulzberger and is surely better in every way than the monkey, Dolan, but does he have the fierce competitive nature of his father or Sumner Redstone? I doubt it. Rupert is 76 and might be effective for another 10 years, but then what? It will be the ultimate and inevitable irony that in 20 years that the News Corp., controlled by but not managed by the Murdoch family, will do what the Bancrofts did and sell to an aggressive, competitive, media conglomerate with abundant new media savvy and assets.

Redstone, who’s 84, looks like he’s listening. He seems to have pushed out his daughter, Shari, who he previously set up to be his successor as chairman of Viacom and CBS. He seems to be maneuvering to leave her the National Theater chain and get her out of the Viacom and CBS picture. He’s intelligently setting up his legacy, which will be a great media conglomerate run by professional media executives, not family. Within 20 years, Viacom and CBS will merge and surpass Time Warner as the top media conglomerate in the world.

No one will buy Cablevision, which also owns Madison Square Garden, the Knicks, and the Rangers, as long as James Dolan comes with the deal. Cablevision will sell off its units piecemeal. The Dolans will sell the cable assets to Comcast, the Kicks and the Rangers to some greater fool (there’s always one for sports teams, which is why they will sell, probably to a hedge fund manager). James Dolan will wind up CEO of Madison Square Garden, which he will, of course, proceed to run into the ground after he tries to promote too many of his own rock concerts.

This leaves the Steinbrenners. George just turned 77 and is in poor health. There are rumors that the family might sell the YES cable network and even the Yankees. The two together are worth nearly $5 billion. If George is smart, he’ll take a page from Sumner Redstone’s playbook and not let his family run the business. He’ll sell the Yankees and the YES network and let his family blow the money instead of screwing up the Yankees.

What all these family-owned media empire billionaires could do is what Bill Gates and Warren Buffet have done—give their money to charities that help make the world better and stop trying to boost their egos and manage the empires they are no longer capable of understanding. Fat chance.

Posted by Charles Warner at August 3, 2007 04:27 PM

Comments

Paul Talbot at August 4, 2007 09:03 AM writes:

Media Curmudgeon at August 3, 2007 09:57 PM writes:

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