Let me say this about that

By Gene Klare

April 17, 1998

THE NEW YORK Newhouses, owners of the Portland Oregonian, the state's dominant daily newspaper, recently sold their prestigious Random House book publishing company to a German buyer for $1.4 billion.

Does this mean that other properties in the Newhouse family's media kingdom, including the Oregonian, might be for sale if the price is right?

Probably not, according to media watchers. But who knows for sure? After the sale of Random House to the Bertelsmann publishing giant in Germany, the New York Times said, "...The powerful Newhouse family appears to be streamlining and getting its house in order."

The Times quoted Thomas Maier, author of a book about leader Si Newhouse and the super-rich clan, as saying; "I think they are beginning to tidy up the business to hand over to the next generation."

THE PATRIARCH of the family-owned mega-media empire, union-busting Samuel I. Newhouse Sr., died in 1979 at age 84. He called his holding company Advance Publications, using the name of his first newspaper, the Staten Island Advance.

The N.Y. Times went on to say of the Random House sale:

"Neither S. I. Newhouse Jr., the 70-year-old chairman of Advance Publications, who is known as Si, nor his 68-year-old brother, Donald, who heads Advance's cable and newspaper business, is planning to step aside from their privately held business empire anytime soon. But they seem, in part, to be laying the groundwork for the day they do so...

"In selling Random House, the nation's largest trade book publisher, Advance is shedding a business with eroding profits and an uncertain outlook. Advance will still own a magazine operation with such high-profile publications as Vogue, Glamour, and The New Yorker, 26 newspapers, business journals and cable-TV holdings."

A 1995 LISTING of the largest media companies put Advance Publications in seventh place, behind such better-known conglomerates as Time Warner, Disney/Capital Cities/ABC, Tele-Communications Inc., CBS (Westinghouse Electric), Gannett, and NBC-TV (General Electric Co.). But Newhouse ranked ahead of such better-known companies as Hearst Corp., New York Times, (LA)Times Mirror Co., Knight Ridder, Viacom, Washington Post Co., and Dow Jones & Co., publisher of the Wall Street Journal. Because Advance Publications is privately owned, the company issues no public financial reports but authoritative estimates can be made of its value. In the early 1990s, several media watchers calculated the worth of the family's holdings at $10 million. Today as the '90s wind down, that estimate can be upped, conservatively, to $15 billion.

When Sam Newhouse's sons, Si and Donald, relinquish the keys to the family kingdom, their sons, a nephew and other family members are seen as the successors. Because it is family-owned, nepotism runs deep at Advance Publications. At one time Sam employed 64 cousins, nephews, in-laws and other relatives, including his three brothers as top executives.

THE NEWHOUSE FAMILY, which numbers about 110 members, assembles annually for a sentimental Thanksgiving dinner on Staten Island, the New York borough where Sam bought his first newspaper at age 26 in 1922.

Author Thomas Maier's 464-page book, "Newhouse: All The Glitter, Power, and Glory of America's Richest Media Empire and the Secretive Man Behind It," was first published by a New York house in 1994, and was reissued last year by a Colorado publisher. It won the 1995 "best media book" award from the National Honor Society in Journalism and Mass Communications. Not surprisingly, the book about Si Newhouse and his family has never been reviewed or mentioned in any Newhouse publication, according to Maier. By Maier's accounting, the Newhouse newspaper chain ranks fourth in the United States. Maier, a veteran reporter for Newsday, a New York City area newspaper, said this:

"...The Newhouses have fostered a culture of apathetic reporting, cozy political relationships, and a moral ambiguity that permeates their history as stewards of public trust."

ANOTHER HARSH ASSESSMENT of Si Newhouse was delivered by Murray Kempton, a syndicated New York newspaper columnist who died last year. Kempton's take on Newhouse was repeated by widely-published Texas columnist Molly Ivins, who in February 1997 wrote:

"Murray Kempton once observed, 'I think Si Newhouse has lost his moral compass since Roy Cohn died' -- the single meanest thing I've ever heard said about anyone."

The Oregonian, which sometimes publishes Ivins' column, avoided that one. Cohn, a controversial New York attorney who was disbarred, bullied his way through life using the techniques he learned in the early 1950s as a young legal gunsel for witch-hunting Wisconsin Republican Senator Joe McCarthy, whose infamous legacy to the world is the word "McCarthyism." Cohn, regarded by some critics as a sleazebag, was a longtime buddy of Si.

Sam Newhouse bought the Portland Oregonian in 1950 for $5 million, and later called the deal "the best buy I've ever made in my life." The buy included the paper's building at 1320 SW Broadway plus KOIN radio and TV. He later sold his interest in the broadcast stations. In 1961, Newhouse picked up the Oregon Journal for $8 million, 21 months after the start of a bitter strike against the Oregonian and Journal by 850 union members.

When the Newhouses tire of the long flights from New York to Portland to inspect the plantation and haul home their huge profits, they could sell the Oregonian for more than $1 billion -- about the same chunk of swag they got for Random House.

PROSPECTIVE BUYERS for the Portland Daily Monopoly would queue up from the private jet runway at PDX all the way to 1320 SW Broadway, where reposes one of the most cash-laden cows in the newspaper business. A metropolitan newspaper can be journalistically mediocre, but if it's a monopoly it's worth much more than a championship professional sports franchise.

Locally, a few names of people with rich balance sheets and expansive lines of credit come to mind as prospective purchasers. For instance, there are billionaires Nike mogul Philip Knight and Blazers-Seahawks owner Paul Allen, and Shilo Inns millionaire Mark Hemstreet. Knight might want to change the paper's name to the Daily Swoosh; Allen might prefer the I-5 TrailHawk, and Hemstreet could lean to an inn-your-face moniker like The Shilo Daily Register.

Of those three, "Buck" Knight's the only one with even a passing acquaintance with the news biz. As a student he worked part-time in the Oregonian sports department prior to the 1959-65 strike; and his father, William W. Knight, was the Oregon Journal's union-busting publisher in that era. Lawyer Bill Knight joined the Journal as assistant business manager in 1946 after working as a Portland-based labor negotiator for Pacific Northwest newspapers. Earlier, the Minnesota-born University of Oregon law school graduate had practiced law in Roseburg and served as a Republican state legislator.

DAYS AFTER the Nov. 10, 1959 start of the Portland newspaper strike, the unions took the position that the Newhouse-owned morning Oregonian provoked the dispute to provide a smokescreen behind which Sam Newhouse could buy the afternoon Oregon Journal.

(To Be Continued Next Month [May 1])


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