LLOYD GRAY: Investing in civic success



As a St. Louis Cardinals fan, I’m still recovering from my team’s second World Series loss to the Boston Red Sox in less than a decade. With time, this latest wound will heal.

In the meantime I’ve decided to look for the silver lining, and there is one: the Red Sox owner.

Billionaire businessman and investor John Henry bought the team in 2002. They hadn’t won a World Series in 84 years. Two years later, they won their first, three years after that another, and this year, a third. Under Henry’s ownership, the Red Sox have reached the pinnacle of success more often than any Major League Baseball team in the new century and equally as often as any team in all of professional sports.

This success under Henry’s stewardship – he prefers that word to “ownership” – has been accomplished by adapting to change, even leading it in some cases, while preserving the best qualities of the team’s historic legacy.

Here’s why I find that encouraging: Henry just recently bought The Boston Globe, long one of the nation’s best-known newspapers, which had fallen on hard times. Like many metropolitan papers, its future was uncertain. It was under absentee corporate ownership – the New York Times Company – which had little inclination to build it back up.

Henry has returned the Globe to local ownership and vowed not only to preserve a venerable New England institution but to make it even better.

It’s fashionable these days to predict the demise of newspapers, but the peddlers of that premise have some explaining to do with the recent interest in a supposedly doomed business by investors like Henry, the much richer and better known billionaire Warren Buffett and Amazon founder Jeff Bezos. Buffett has been buying up newspapers all over the place. Bezos bought The Washington Post. Each of these men has made lots of money, and it hasn’t been by making reckless business decisions.

Admittedly, their motivations aren’t all about profit. They appreciate the civic value of strong newspapers and want to be a part of strengthening their future. But the fact remains that they wouldn’t be buying them if they didn’t think they could be profitable over the long haul.

Henry recently wrote a full page essay under the heading, “Why I bought the Globe,” which an anonymous self-described “devoted reader” of the Daily Journal was kind enough to send me through the mail. (Whoever you are, thanks.)

Henry acknowledges that people have asked him why in the world he would make such an investment. “I’m in this to make a difference, just like most of the people I have met in journalism,” he wrote.

In elaborating on what that “difference” entailed, Henry continued: “There is no shortage of information today, but much of it is unsubstantiated, too voluminous to understand, or presented in entirely self-interested ways … Today, reliable information has never been more valuable. A newspaper needs to provide the breadth of perspective and diligent analysis that gets to the heart of what is going on in our world.”

In other words, there is more need for newspapers – and implicitly, more of a value proposition for them – than ever before, which makes for a nice combination of civic virtue and business pragmatism from an investor’s perspective. Reminds me of George McLean, the late longtime owner of the Daily Journal, who believed a newspaper should be profitable solely for the furtherance of its community-service mission.

There’s a lot of difference in the circumstances in which community newspapers like the Journal and metropolitan papers like the Boston Globe find themselves today. But the basic purpose of both remains the same, and John Henry has articulated it well – and put his money where his mouth is. It is almost enough – but not quite – to get me over his Red Sox winning the World Series.

Lloyd Gray is executive editor of the Daily Journal. Contact him at (662) 678-1579 or lloyd.gray@journalinc.com.

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