Jill StewartYesterday, a Wall Street Journal piece touched on whether the Koch Brothers might buy the Los Angeles Times. Today the brothers released a statement — OK, a lecture — straight from the pages of Ayn Rand's Atlas Shrugged. They want you to know that they don't give a rip about protests against them. They care only about whether the L.A. Times is a solid investment.
L.A. Weekly freelance writer Hillel Aron created this at-a-glance flow chart explaining the story so far in the Koch Bros./L.A. Times drama: Rumor -> Blog post -> New York Times story -> mass protest -> Ry Cooder song. Now add this: -> Koch Brothers lecture.
Their statement is a window into the eerie precision with which these hard-core libertarian businessmen think about society and business. The characters John Galt and Hank Rearden come to mind:
As expected, there have been coordinated protests by political and organizational activists in several cities, including one that took place in Los Angeles on May 29. Captured on this video are comments from some of the protesters, including this remark by a Greenpeace activist saying: “Here's the headline I want to see in the Los Angeles Times tomorrow: 'Los Angeles to Koch Brothers: Drop Dead.'”
The video provides unfortunate evidence that the protesters are ill-informed about Koch's beliefs and values as a company. Many of the attacks are personal, threatening and unfounded. We hope these types of hate-filled demonstrations are a wake-up call for all who believe in civility, diversity and respect, and who believe that free speech is a constitutional right. For its part, Koch Industries does not and will never engage in hate speech. Koch will make investment decisions based on our own set of criteria and principles. In America, protesters have a right to protest; however we haven't been intimidated by past politically motivated attacks, and we won't be intimidated by these protests. The demonstrations carry no weight and have no influence on investment decisions we make.
Credit: Nanette Gonzales
Take that, you weightless and influence-free demonstrators!
Yet the WSJ story, headlined, “Koch Confirms Interest in Acquiring Newspapers,” clearly includes a bid by Charles and David Koch to tamp down widespread fear and anger that the highly political, conservative billionaires want the L.A. Times as a platform for their views.
So maybe the Los Angeles protests didn't bore them to tears, as the boys want everyone to believe.
The Journal story by James R. Hagerty and William Launder opens with Charles sounding pretty damn defensive:
Billionaire Charles Koch confirmed that his company, Koch Industries Inc., is looking into the possibility of acquiring newspapers, but insisted he is looking for a profitable business, rather than a forum to advance his politics.
“There is a need for focus on real news, not news with an agenda or news that is really editorializing,” Mr. Koch said in an interview.
Mr. Koch added in a follow-up statement to The Wall Street Journal that the editorial page of any newspaper his company acquired “would be a marketplace of ideas where all sorts of approaches to public-policy issues are vetted and contrasted, and there could be ongoing debate.” That, he predicted, “would ultimately improve newspapers as a business proposition.”
The truth is, the L.A. protests and complaints aren't aimed at the Koch brothers. And most protesters in the fray are sophisticated enough to know this.
The protests are aimed at media-shy rich dude Bruce Karsh, chairman of the board of Tribune Co., which owns the L.A. Times. A bankruptcy judge handed Karsh and his allies control of the L.A. Times and other Tribune properties because Karsh, et al., are the major creditors in Tribune's bankruptcy.
Karsh is not a media mogul or even close. He's certainly not accustomed to bedraggled, angry people protesting at his home in leafy, pricey, isolated Benedict Canyon, where his recent neighbors have included Jay Leno, Bruce Springsteen and David Beckham.
Karsh is the dashing Forbes No. 328 among America's 400 richest people, a self-made billionaire who is president of Oaktree Capital Group LLC. He's the former right-hand man to billionaire Eli Broad, and got his first job in L.A. thanks to former mayor Richard Riordan.
Karsh has the biggest voice in deciding who gets to buy the most influential civic institution in Southern California, and perhaps in California, the L.A. Times.
Ayn Rand would love the idea of a captain of finance controlling the fate of a profitable media outlet! (That's right, profitable. The L.A. Times nets a cool $70 million per year, as L.A. Weekly has reported..)
But Poynter.org's Rick Edmonds says Los Angeles can just calm the hell down about the Brothers Koch.
Edmonds argues that David and Charles will probably decide that owning the L.A. Times would be a bad investment — for them in particular.
Quoting from “All the News That's Fit to Sell,” by Prof. James T. Hamilton, Edmonds argues that the early history of the newspaper industry will dissuade the boys from buying Tribune Co.:
With new high-speed presses and the beginnings of a substantial advertising base, Hamilton explains, publishers figured out that they could add more readers and attract more brand advertisers by steering down the middle — moving away from open entanglement with political parties as had been the norm for the previous hundred years.
That still remains a sound business principle. Smart executives ranging from the late Al Neuharth to Warren Buffett get it and have said explicitly that they put their personal political views aside in running a chain of newspapers. They let local publishers make the decisions on news coverage and editorial page endorsements.
Hamilton (using historical rather than contemporary data) identified a partial exemption to the nonpartisan rule. A Democrat or Republican paper could be successful if that matched the tilt of the community itself.
That would make Tribune papers a particularly poor match for the Koch brothers' political activism. You would be hard-pressed to find two bluer cities than Los Angeles and Chicago.
No argument there! The sale of the L.A. Times could be months away. So just keep the below flow chart handy, and add entries as the drama develops:
Rumor -> blog post -> New York Times story -> mass protest -> Ry Cooder song -> Koch Brothers lecture.
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