The Billionaire Newsboy
Making sense of Philip Anschutz's Examiners.
Meyer imagines the established papers will combat the 6 percenters by counter-investing but not exclusively in newspapers. "How the information is moved—copper wire, cable, fiberglass, microwave, a boy on a bicycle—will not be nearly as important as the reputation of the creators of the content. Earning that reputation may require the creativity and the courage to try radical new techniques in the gathering, analysis, and presentation of news," he writes.
Which prompts this question about Anschutz's opening move: What explains his reliance on the antiquated analog technology of newsprint? Remember, he made his big fortune by laying 21st-century technology—fiber-optic cables pulsing with digital information—along the 19th-century railroad right-of-ways he owned. Likewise, in the movie-exhibition business, Anschutz has hoped to reap new economies by being among the first to deliver movies to theaters via fiber-optic cable and project them electronically.
As Anschutz builds his 6-percent-margin newspapers, he must realize that a business model already exists that delivers news and advertising more efficiently. Without looking like a shill for my bosses at the Washington Post Co., may I point to the washingtonpost.com and other online newspapers? No printing plants, no rolls of paper, and no delivery trucks—just a whole lot of computers and people. You don't suppose that the newsprint Examiners are stalking horses for a nationwide network of Examiner Web sites, do you? It's no crazier a business proposition than Ted Turner's 24-hour news channel was in 1980.
In the case of Slate, 99 percent of its value—reported to be $15 million to $20 million when the Washington Post Co. bought it from Microsoft in January—was goodwill. Slate's assets are limited to four dozen computers, a few printers and scanners, furniture, office supplies, 127 Slate baseball caps, and its archive of stories. What's your goodwill value? Send e-mail to email@example.com. (E-mail may be quoted by name unless the writer stipulates otherwise.)