Best Business Books 2005: Media
Debacle on 43rd Street(originally published by Booz & Company)
The front page of the New York Times on Sunday, May 11, 2003, stands alone in the history of journalism. It will not be remembered for a declaration of war, a stock market crash, or a revelation about governmental skullduggery, but instead for a grotesque 14,000-word apology. Beginning on page 1 and continuing on more than four full inside pages without advertising, the newspaper painfully explained how a deceitful, inexperienced Times reporter named Jayson Blair had fabricated and plagiarized news stories for months without detection. The article — by an internal task force of top editors — was a remarkable exercise in damage control, rereporting, and correcting Mr. Blair’s major deceptions.
Nonetheless, it provoked blistering attacks from across the media landscape in scores of articles, reports, and books, shaking the foundations of the 152-year-old newspaper and its parent (the nation’s 18th largest media company by revenue), and leading to the forced resignations of its two top editors — something rare in American journalism.
For all that, both the Times and its critics said remarkably little about why the fiasco had occurred. The firestorm at the Times — though naturally viewed through a media-centric lens by media commentators — masked a more pervasive and ultimately more important story about the internal workings and the evolving business model of the world’s most important and influential newspaper organization. Family-run, highly reputable, professionally accountable, and influential, the New York Times Company, of which the newspaper is an integral part, is being forced to cope with the same strains and pressures facing other media corporations as they seek to maintain and extend their brands in an increasingly global, digital marketplace populated by aggressive conglomerates. The Blair affair, clearly a devastating blow to the Times and media industries generally, is a wake-up call for more thoughtful, orderly, and visionary leadership in organizations that are by nature resistant to change.
Magazine journalist and media critic Seth Mnookin captures the drama and significance of the Jayson Blair story and its aftermath in Hard News: The Scandals at The New York Times and Their Meaning for American Media (Random House, 2004). Hard News is a gripping narrative, a rare inside look at this otherwise cloistered media company, and my choice as the year’s best media business book. Mr. Mnookin casts Howell Raines, named in 2001 as the Times’s executive editor (the top editorial position), as chief villain. Confident, caustic, and polarizing, Mr. Raines created the newsroom culture in which Jayson Blair flourished, even in the face of repeated warnings from more cautious and less credulous colleagues. But the story also reflects badly on his boss, publisher and company chairman Arthur Sulzberger Jr. (scion of the newspaper’s founders).
The Times has long intrigued management experts. It is the flagship of a diversified media company, more heavily staffed than many of its competitors, yet known for producing excellent content while generally yielding respectable profits. The company is publicly traded, but in effect under the hereditary control of its influential ruling family, the Sulzbergers. The idea that this successful, prestigious, old-fashioned enterprise might not sustain itself — at a time when other media get rich returns by dumbing down their content — worries its owners and others in media industries, as well as many of the newspaper’s readers.
Decades earlier, similar kinds of concerns caused Arthur Sulzberger Sr. (the current publisher’s father and predecessor) to invite management guru Chris Argyris to study the paper’s organizational culture and operations. The result was a seminal, classic book: Behind the Front Page: Organizational Renewal in Metropolitan Newspapers (Jossey-Bass, 1974), which masked the identity of the Times as the Daily Planet. Mr. Argyris found an organization that was badly managed and rife with organizational pathologies — secrecy in decision making, win–lose dynamics, withholding of information, high competition, low trust, and unwillingness among managers to speak openly or collaborate with one another.
Mr. Argyris went well beyond his assignment — even producing recommendations for restructuring. He hoped to inspire media firms to become both self-examining and self-regulating, but there is little evidence that his damning diagnosis was ever acted upon — especially at the Times. Three decades later, the paper, even with different personnel, still exhibited many of the dysfunctional patterns he had identified. By the time the younger Sulzberger and Mr. Raines got together in 2001, little about the newspaper’s flawed fundamental culture had changed.
One reason for the organization’s inertia is that the management and staff — who see the New York Times as the gold standard of American journalism — have rarely brooked criticism. In the 1970s, for example, when the independent, privately organized National News Council was set up as a conduit for public and private feedback, the Times alone among the national media refused to cooperate with it. Within a decade, the council died. Similarly, as other news media appointed ombudsmen and public editors to handle reader and institutional complaints, the Times again demurred.
Another reason is that Times managers and editors have not, by and large, been innovators. Although some earlier studies of the Times emphasized its distinctive character and leadership role among U.S. media, few have hailed its management performance. The reason, once again, is hubris: People associated with the Times regard themselves as unique, standing on the commanding heights of American journalism with little to learn from others. Irreverent critics, however, have scored the Times for being sluggish in adapting to a changing newspaper market. For example, the paper was years behind others in creating special content sections and adopting color printing and other technical improvements. Even its much admired and celebrated content, often criticized for its liberal, metropolitan orientation, has until recently hewed to predictable formats and traditional newsgathering practices.
To understand the distinctive aspects of the paper as well as its role as an agenda setter for information — if not for style and presentation — there is benefit in reviewing earlier accounts by insiders (publishers, editors, and even some reporters) as well as more impartial outside assessments. The best of these are Gay Talese’s The Kingdom and the Power (Ivy Books, 1969) and Susan E. Tifft and Alex S. Jones’s The Trust: The Private and Powerful Family Behind The New York Times (Little Brown, 1999). Both confirm the slow-to-change nature of the newspaper famously known as “the Gray Lady,” especially in its corporate culture, leadership imperatives, and management style. Gay Talese explains how the paper became America’s preeminent news provider while playing a vital role in American life. Ms. Tifft and Mr. Jones remind us that the company is still led by America’s ruling journalistic family, the Sulzbergers, descendants of Adolph Ochs, who bought the then-failing Times in 1896 and made it a great newspaper. Their control is guaranteed by ownership of the firm’s entire Class B stock (all 850,000 shares) and 15 percent of its Class A stock (22.5 million of its 150 million shares). No elite station in American life has greater continuity than that of the publisher of the New York Times. Presidents of the U.S. come and go, Times publishers linger on. More recently, media critic Ken Auletta of the New Yorker tracked management issues at the Times and Howell Raines’s rise to power in Backstory: Inside the Business of News (Penguin Books, 2003). Mr. Auletta, like Mr. Mnookin, is critical of Mr. Raines’s abrasive and autocratic management style. Although Mr. Raines himself declined to be interviewed for Hard News, his voice was heard in a rambling, defensive jeremiad in the Atlantic Monthly in May 2004, about a year after his departure. There he complained about “attitudes of entitlement and smug complacency that pervade the paper.”
Arthur Sulzberger Jr. needed little coaxing in exploring a strategy for change for the New York Times when he became publisher in 1992. He had already worked at the newspaper in a variety of positions for 14 years and was widely considered the heir apparent. While he always viewed himself as a guardian of the newspaper’s high-minded values, Mr. Sulzberger also longed for recognition as a dynamic, innovative chief executive, capable of leading and managing change. From the early 1990s, even before Mr. Raines became his “chief content officer,” he saw himself as a change agent pushing reform, renewal, and reinvention. He brought in management experts, including the famed W. Edwards Deming, for weekend retreats with key staffers. Although such moves exposed him to ridicule among journalists who scorn the notion of “MBAs in the newsroom,” they also showed that he recognized that the Times’s strategy, content, and style must impress investors, expand ad revenue, and inspire management and staff. It is a pressured role — that of a hereditary leader whose longevity in office is not necessarily a lifetime guarantee.
Mr. Mnookin’s account, drawing on scores of interviews, explains how Mr. Sulzberger eventually — and, in retrospect, unfortunately — settled on Mr. Raines, himself brash and combative, who had spent more than a decade in the Times’s cloistered editorial page offices, distant from daily news decisions. Mr. Raines courted his boss through flattery and promises to produce content that would strengthen the bottom line. But, tellingly, he seems to have lacked both Mr. Sulzberger’s sensitivities and his interest in organization. Critical of some of the paper’s most honored (he would say “pampered”) staff, and poised to make waves, Mr. Raines took command on September 5, 2001, six days before the terrorist attacks. The summer before, he had called on and summoned top editors and reporters, letting them know they could expect changes — some of them bound to be unsettling.
Whatever problems Mr. Raines might have faced with such a threatening approach were postponed as the staff mobilized to cover September 11 and its aftermath. When the paper won an unprecedented number of Pulitzer prizes the following spring, he was designated “Editor of the Year” by the National Press Foundation. He was less than gracious in victory, boasting that if not for him, this once “uninspired” staff could not have achieved so much. Such remarks hardly ingratiated him with those who would eventually cast a de facto no-confidence vote.
As the Blair scandal unfolded, the paper took a tremendous battering from an enormous range of constituencies — from sharp-tongued authors of Weblogs to well-known media leaders. Truly, a blow to the Times’s reputation and credibility had been sustained, and extended mea culpas and cosmetic changes would not be enough to satisfy critics within and outside the paper. The demand for Mr. Raines’s head — coming both from outside critics and from influential staffers to whom Mr. Sulzberger listened — won the day. Under pressure, both Mr. Raines and his managing editor, Gerald Boyd, resigned. Mr. Sulzberger kept his job, but had to ward off unhappiness on the corporate board, which has other options within the family and senior management should the present heir prove unequal to the tasks of the future.
The Times’s harsh treatment of its newsroom leaders has written new rules for media management and accountability. In previous instances, including the Washington Post’s forfeit of a Pulitzer Prize over a fabricated story in 1981, the Wall Street Journal’s embarrassment when a columnist went to jail for leaking stock tips, and the outrageous serial fabrications of Stephen Glass of the New Republic (the subject of a film, Shattered Glass), no editor had been fired. But in the wake of the Jayson Blair scandal and the Times’s reaction, a case of fakery by a reporter at USA Today brought down its top editor. In 2004, when CBS’s 60 Minutes overreached with faked documents regarding President Bush’s National Guard service, two high-ranking producers were sacked and anchor Dan Rather was effectively forced into early retirement. There is still, however, no clear standard for editorial responsibility (another USA Today transgressor in 2005 was fired, but his editors were spared).
With the Jayson Blair affair, the Times finally succumbed to criticism and appointed an internal review committee, with outside members, charged with investigating the scandal and its implications for management. This yielded the Siegal Committee Report, named for Timesman Allan Siegal, an assistant managing editor and guardian of the paper’s accuracy and style (available at www.nytco.com/pdf/siegal-report050205.pdf). The investigation identified systemic problems in the tracking and processing of content and recommended a public editor (subsequently appointed) and other internal controls. The report sought to ensure accountability to the public, opportunities for the staff, and improvements in newsroom organization and performance management as well as overall communication. And, importantly, the Siegal report dismissed the “bad apple” theory that Mr. Blair alone was accountable for the debacle. Some critics think the procedural recommendations of the Siegal report clearly did not go far enough in the direction of organizational overhaul. Still, in this change-resisting organization, it was a dramatic start.
The larger question raised by the travails of the Times, despite its overall success and its position as the foremost American newspaper, is whether it is a leadership or management model relevant to other newspapers and media organizations. Publisher Mr. Sulzberger, from the early 1990s, wanted to improve the paper, ultimately transforming it from “solely a newspaper…to a multimedia content provider,” Mr. Mnookin says. Indeed, Mr. Sulzberger frequently proclaims he is “agnostic about the platform,” with the emergence of new technologies and channels as a survival strategy. The search engine Google, for example — free from the stranglehold of journalistic traditions — could eventually become a more important competitor for the Times and other newspapers than such legacy media as magazines, television, and cable.
This scenario is graphically depicted in an eight-minute “Flash movie” making the rounds on the Web in 2005, titled “EPIC 2014” (www.robinsloan.com/epic). It predicts a future in which “Googlezon” (the result of a merger between Google and Amazon) has triumphed with an omnipresent, Web-based news service, and in which the New York Times has become a print-only newsletter for “the elite and the elderly.”
Whereas the business-side leadership of the media long ago accepted managers with analytic and strategic capacities, the content side has lagged well behind, resisting organizational reforms as dollar-driven intrusions inconsistent with its editorial values. From the early recommendations of Chris Argyris to the present, no one has proposed a truly seamless, unified management structure that takes into account the very real possibilities for corruption on both sides of the media house. Both need a new regime with the capacity to accommodate the radical changes of the digital age, in which everyone can be an editor and reporter and in which generating revenues for high-caliber professional content will require more cooperation and collaboration than ever before. The ultimate survival of the New York Times and other editorial enterprises is clearly at stake — and it is theirs to lose if the paradigm does not change, and soon. Other enterprises can and likely will take their places.
Everette E. Dennis (email@example.com) is Felix E. Larkin Distinguished Professor of Media and Entertainment Industries at Fordham University’s Graduate School of Business in New York City, director of Fordham’s Center for Communication, and author of several books about media industries.