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Selling Star Tribune to Koch some day ‘could happen,’ chairman says

Mike Sweeney
Mike Sweeney

Businessman Mike Sweeney, currently serving as chairman of the Star Tribune, says it’s the best gig he’s ever had. He says that covering government in a one-party state presents special challenges to a newspaper. He asserts that the paper is living down its old “Red Star” reputation. And he completely rejects the popular canard that the paper’s economic interest in the new Vikings stadium influences its coverage.

In an interview with Larry Jacobs at the Humphrey School Tuesday, Sweeney also said surprisingly nice things about MinnPost’s place in the local journalism scene. (The quote was “contributes to a deeper and richer understanding” of our community.)

Oh, and Sweeney said that when the current ownership wants to sell the paper – a time that is in the foreseeable future – if the only willing buyers are the Koch brothers, then such a sale could happen.

A little more slowly:

Sweeney , who is also CEO of Steinway Musical Instruments (yes, the Steinway Piano people) claims (and I believed him) that overseeing the Strib on behalf of its accidental owners is “the best business experience I’ve had.” (The owners are accidental because they acquired control when the last group of intentional owners walked away, owing the accidental owners a few hundred million.)

‘Relatively healthy company’

Compared to the bankrupt operation he took over, the Strib is a “relatively healthy company,” Sweeney said. Revenue from circulation is up, he said, which may have been a nice way of saying that overall revenue has still not bottomed out.

The old model, when newspapers were virtual monopolies and cash cows, is permanently “cracked,” Sweeney said, and it ain’t coming back. “This guy ‘Craig’ started his ‘list,’” Sweeney said as a shorthand summary of the many contributions that the Internet has made to the cracking of that model.

The Cowles family, which sold the Strib for about $1.4 billion in 1997, may not have timed the sale at the last moment before the value of newspapers started to decline, Sweeney said, “but if they missed the top, they missed it by about a week.”

Unless he’s a brilliant actor (maybe), the political role of the newspaper seems to be a kick for him. He wrote a controversial op-ed piece (and part of the controversy was simply that he, the newspaper’s chairman, signed it) expressing concern that the DFL had overreached  in the just-completed session, but he also started by blaming Minnesota Republicans for going so far right in the previous session that they “deprived our great state of a two-party system.”

Sweeney presents himself as a raging moderate. He also suggests that he has little influence over the newsroom (“the fastest way to prove how irrelevant I am would be for me to make a suggestion.”)

Koch brothers

So, on that Koch brothers thing. The question arose on a question from the audience, undoubtedly inspired by some recent suggestions that the Kochs might experiment with buying newspapers.  

“The time is coming when Wayzata Investment Partners [the partnership that owns the biggest share of the Strib] will want to sell. I spent time on it today,” he said. The owners are certainly interested in what price their property will fetch, but they are also mindful that to a city like Minneapolis, a newspaper like the Strib is a “community asset.”

“We also have a special role in the community,” Sweeney said. He said “community asset” more than once. I assume that’s supposed to imply that owners would allow certain non-financial considerations to enter their thinking.

His attempt to imply what he wasn’t willing to say caused Jacobs to tell him that he was leaving the possibility of a Koch purchase “up in the air.” So Sweeney tried to leave it at this: When the owners are ready to sell, if the only offer they get comes from the Koch Brothers, “it could happen.”

You can take that how you choose. My best guess is that that’s something of a warning to other potential buyers not to put the current accidental owners in that position.

Comments (21)

  1. Submitted by Scott Stansbarger on 06/12/2013 - 09:33 am.

    My subscription

    Well, I suppose I will save some money if the StarTribune ever sells to the Koch brothers because that’s the day I end my subscription.

  2. Submitted by mark wallek on 06/12/2013 - 09:34 am.

    The Star became the fish wrapper

    Any abomination is acceptable in the name of Profit. The StarTrib has not been a real paper ever since it lost it’s independence. Whoever owns it now can keep it as it is nothing anymore. A once vibrant contributor to the community, it’s loss would be inconsequential now. Selling it to the Brothers Grimm is not smart, except perhaps where profit is involved, because they would likely overpay just because they can.

  3. Submitted by ALAN BELISLE on 06/12/2013 - 09:48 am.

    Koch Bros

    If the notorious Koch brothers did buy the Strib, we can all assume that it would become another channel for far-right wing propaganda. In that case, there would be an organized campaign to drop subscriptions, boycott, and bankrupt the paper. Maybe the fat cats in Wayzata should consider that before they consider selling our “community asset” to the devils.

    • Submitted by RB Holbrook on 06/12/2013 - 12:25 pm.

      What would they care?

      If the Koch brothers buy the Strib and accelerate its decline into irrelevance, that’s their affair. The Wayzata folks wouldn’t care about that.

      The “community asset” talk is just standard corporatist cant. It’s a community asset when it suits the owners. Otherwise, it’s just another subsidiary.

      • Submitted by Joe Musich on 06/13/2013 - 02:49 pm.

        who is he foolin g ?

        The strib rolled over being a community assent awhile ago. Of course if words are being parsed the community would not be the one most reflective of mpls or for that matter the metro area.

  4. Submitted by Mike Meyers on 06/12/2013 - 09:54 am.

    Canard?

    How did you come up with that word choice? The paper has done everything but take out full page, 3D, color ads to promote the stadium. Both in editorials and in news coverage that ignored countless unanswered questions about the Vikings deal.

    Empirical evidence does not a “canard” make.

  5. Submitted by Greg Kapphahn on 06/12/2013 - 10:34 am.

    I Decided the Strib Was ALREADY Owned

    by those who were interested in making money far more than in providing a service to the community in which they were located after their first (or was it their second?) highly-leveraged buyout.

    Among the earliest changes was a change in editorial attitude toward the defense of “businesses” operating by Freidmanian principles as being above reproach, no matter what negative effects those businesses had on their customers, their employees, or the environment. High profits became the ONLY measure of any enterprise’s worth. This attitude rapidly filtered down from the editorial page into the entire paper.

    It soon became clear that, in reading the Strib, I was no longer being educated and informed, but constant efforts were being made to convert me to the owner’s dysfonic perspective on reality (owners and management = good, unions = evil, private schools and charters schools = good, teachers and public schools = evil, among other things). That was when I changed my browser’s home page from the Strib (where it had been for several years) to MinnPost.

    If the Kochs were to buy up the Strib it would only result in a change of a few small degrees, since the transformation toward their alternate-reality – money, people who have the most of it, and are best at extracting even more of it from their fellow citizens are all that matters in this world – perspective has already largely been accomplished.

    • Submitted by Paul Brandon on 06/12/2013 - 10:49 am.

      Greg–

      The STrib is a private business, not a public service, so its first obligation is to it’s shareholders.
      And, I believe that newspapers get more income from advertising than from circulation, although advertising rates are tied to circulation.
      So, it is not surprising that the STrib takes into account what makes its income sources happy. Unbiased reporting (and more to the point, editorializing) would be expected only if all viewpoints were equally represented among its income sources.
      Fortunately, we have MinnPost available as an alternative. It is also subject to its supporters, but their biases may presently be different from those of the STrib. At least at present, MinnPost seems to have minimal corporate support, although it does get some from corporate foundations.

      • Submitted by Greg Kapphahn on 06/12/2013 - 02:33 pm.

        It Is BECAUSE “Private Business” Sees NO Obligation

        to its community, its customers, nor the planet, that the American economy is slowly strangling the goose that has lain all its golden eggs: the middle class.

        The idea that business’s ONLY responsibility is “to increase shareholder value” (and, of course executive compensation) has ALWAYS been destructive whenever and wherever it has reared its ugly head.

        For a society to function well, business MUST recognize and respond to it’s obligation to ALL it’s “stakeholders,” not just to a narrowly-defined group of shareholders and/or owners/managers. Failure to do so means that EVERY business eventually fouls its own nest to the point where it becomes impossible for it to make ANY profit.

        • Submitted by Paul Brandon on 06/12/2013 - 06:49 pm.

          Agreed

          You’ve stated the problem well.
          Now, how do we solve it
          (get American businesses to behave on some basis other than their short term profit)?
          Their long term interest is certainly consonant with a healthy society, but people tend to be biased towards short term outcomes (there’s a substantial literature on this).
          So, how do we bridge the gap between short term and long term outcomes, beyond talking at people?

    • Submitted by Susan McNerney on 06/12/2013 - 11:10 am.

      Believe it or not, it actually could be worse

      but I think if it does it won’t have much in the way of a subscriber base. That might make it less interesting to the Kochs – their business model only works in markets that are big enough to have their political allies on the subscriber rolls in large numbers. Perhaps Los Angeles, despite being overwhelmingly liberal, has those kinds of numbers just due to sheer size, though I still doubt the success of the LA Times in a Koch scenario.

  6. Submitted by Kim Millman on 06/12/2013 - 11:59 am.

    Red Star?

    Mr. Sweeney’s attempt to denegrate a formerly fine newspaper that had real standing in the community and around the state for its balance and quality is nothing more than a reflection of his own integrity. Apparently nothing but big business bias will do for him, quality be damned. The failure of such a strategy is more than likely reflected in his subscription numbers.

    I still subscribe because I need a variety of news and unfortunately for the time being that is the mainstream publication for MN. However, over the course of the last year, I have looked at that billing statement every few months and contemplated cancelling. Not only is there a real conservative bias in the editorials and reporting, but there is no depth. The Strib has become a stenography service for big business. Since I receive the news from a number of sources, I notice the stories the Strib is not covering or missing context to the stories they do cover and wonder how our community can possibly stay informed. The newspaper business is the last bastian of news since local television news abandon its responsibilities for infotainment and paid product promotion.

    This goes to the heart of the reason I subscribe to Minnpost. I voluntarily pay more for Minnpost than I’m compelled to pay for the Strib because of their quality and I want to ensure Minnpost succeeds. Ironically I feel I get my more than my money’s worth from Minnpost, while I feel I get less than I deserve with the Strib.

    If Mr. Sweeney was really interested in the success of the Strib, he would be spending more time worry about the quality and depth of the services he wishes to sell and a little less time denegrating what was once a source of pride in Minnesota.

  7. Submitted by Nick Wood on 06/12/2013 - 12:34 pm.

    Koch brothers

    To me, it seems pretty far fetched to think the Koch Bros. would be interested in buying the Strib. First, this is a relatively small market, and second, it serves a generally liberal community, which would be resistant to their message (assuming they would insist on skewing the paper toward their personal philosophy).

    Still, there are no regulatory issues involved, and by bringing up the Koch Bros, the present owners are basically saying they would sell to anyone who comes up with the right deal. I wonder if the Chinese are thinking about media purchases in the U.S.?

  8. Submitted by Nick Wood on 06/12/2013 - 12:36 pm.

    Koch Brothers

    P.S. If the Koch boys buy the Strib, it would be the best thing that could ever happen to MinnPost.

  9. Submitted by Peder DeFor on 06/12/2013 - 04:17 pm.

    Thinking the Right Thing

    The insistence that a hypothetical newspaper owner have the right political beliefs is a betrayal of liberal ideals.

    • Submitted by Greg Kapphahn on 06/12/2013 - 04:59 pm.

      No, It’s NOT

      Because what we’re asking of the Strib, as it currently exists, and not getting, is a factually accurate, politically balanced, news source that educates and informs its readership without continuously attempting to convert that readership to a particular economic/political point of view.

      —although as we all know, for “true believer” conservatives, TRUTH does, indeed, seem to have a very liberal/progressive bias–

      so such a newspaper would be offensive to those who can’t bear to have their own alternate reality, fact-free, perspectives challenged.

      If the Koch bros. were to buy the Strib, they would do as they have done with their media efforts, political advertising efforts, and Tea Party astroturfing efforts nationwide – turn it into a propaganda rag.

      They seem to find such efforts amusing and, having money to burn, would likely keep the Strib going even if it were costing them a few million each year.

  10. Submitted by Peder DeFor on 06/13/2013 - 07:46 am.

    Koch Hate

    The fixation on the Koch brothers is really ridiculous. They spend a small fraction of the amount that big time liberal organizations do. They spend mostly on libertarian leaning or non-political efforts. IIRC, they are big time donors to PBS and the arts.
    Their big time sin, of course, is that they don’t agree with liberal opinions and that seems to be too big of a problem. How dare anyone oppose Obama! Such people should be shunned and vilified!
    The phrase used to be ‘I don’t agree with what you say, but I’d fight to the death for your right to say it’. Now it has become, ‘I don’t agree with what you say and I’ll fight like hell to keep anyone from hearing it’.
    As I said, a betrayal of liberal ideas.

    • Submitted by RB Holbrook on 06/13/2013 - 09:36 am.

      Scoundrels!

      It’s the old conservative “hatred” complaint. If anyone on the left disagrees strongly with someone on the right, it’s hatred. After all, no sensible person could be anything but a rock-ribbed conservative. The only reason for opposing conservative ideology is some thoroughly irrational hatred of the conservative in question. Disagreement with conservatives (and only disagreement with conservatives) is censorship and political correctness run amok. Contrast that with conservatives, whose automatic opposition to anything and everything President Obama proposes is motivated neither by hatred nor racism, but by genuine patriotism and concern for the future of our nation.

      By the way, how is taking over the government of Wisconsin “libertarian leaning or non-political,” anyway?

    • Submitted by Joe Musich on 06/13/2013 - 02:55 pm.

      and how …

      do you know what liberal ideals are _?

    • Submitted by Paul Brandon on 06/13/2013 - 03:16 pm.

      For some numbers

      on the Koch boys and others, see
      http://opinionator.blogs.nytimes.com/2013/06/12/dark-money-politics/?ref=opinion

      Note: churning.
      The Koches spend a lot more money on politics than their direct contributions would imply.

  11. Submitted by Hiram Foster on 06/13/2013 - 10:04 am.

    Koch brothers

    It should be noted that Sweeney’s statement about the Koch brothers came in answer to a question; it wasn’t anything he volunteered. And what other answer could he give? He is a guy who is a fiduciary of a set of investors and in terms of a sale of the Strib, realistically he is bound to take the best offer he receives, no matter who makes it. As a practical matter, things aren’t quite as black and white as that, there is lots of room to wriggle, but in broad terms that’s the way thing are. Now in practical terms, if the point of a purchase by an ideological investor is to propagate the ideology rather than make money, the asset will be worth less. If the Strib is profitable, then I think the best offer will come from someone whose focus on making money, not pushing a point of view.

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