Billionaires Wanted to Save the News Industry. They’re Losing a Fortune.

There’s an outdated saying in regards to the news enterprise: If you wish to make a small fortune, begin with a big one.

As the prospects for news publishers waned within the final decade, billionaires swooped in to purchase among the nation’s most fabled manufacturers. Jeff Bezos, the founding father of Amazon, purchased The Washington Post in 2013 for about $250 million. Dr. Patrick Soon-Shiong, a biotechnology and start-up billionaire, bought The Los Angeles Times in 2018 for $500 million. Marc Benioff, the founding father of the software program large Salesforce, bought Time journal along with his spouse, Lynne, for $190 million in 2018.

Each time, the newsrooms greeted their new house owners with cautious optimism that their enterprise acumen and tech know-how would assist work out the perplexing query of the best way to earn money as a digital publication.

But it more and more appears just like the billionaires are struggling similar to almost everybody else. Time, The Washington Post and The Los Angeles Times all misplaced thousands and thousands of {dollars} final yr, individuals with information of the businesses’ funds have stated, after appreciable funding from their house owners and intensive efforts to drum up new income streams.

“Wealth doesn’t insulate an owner from the serious challenges plaguing many media companies, and it turns out being a billionaire isn’t a predictor for solving those problems,” stated Ann Marie Lipinski, the curator of the Nieman Foundation for Journalism at Harvard University. “We’ve seen a lot of naïve hope attached to these owners, often from employees.”

The losses could have probably the most instant influence at The Los Angeles Times, the place journalists are bracing for unhealthy news. Kevin Merida, the newspaper’s extensively revered editor, introduced final week that he was resigning, a choice that got here after rigidity with Mr. Soon-Shiong over editorial and enterprise priorities, in response to two individuals acquainted with the matter.

In the center of final yr, The Times was on observe to lose $30 million to $40 million in 2023, in response to three individuals with information of the projections. Last yr, the corporate reduce about 74 jobs, and executives have met in latest days to debate the potential of deep job cuts, in response to two different individuals acquainted with the conversations. Members of The Los Angeles Times union have known as an emergency assembly for Thursday to debate the potential of one other “major” spherical of layoffs: “This is the big one,” learn the e-mail to staff.

A spokeswoman for Mr. Soon-Shiong declined to touch upon particular monetary figures for The Los Angeles Times however stated in an electronic mail that firm had “a significant gap between revenue and expenses,” even with the layoffs and different cost-saving measures from final yr.

She stated that his household had invested “tens of millions of dollars” annually since buying The Times in 2018. “They are committed to continuing to invest,” the spokeswoman, Jen Hodson, stated in a press release. “But relying on a benevolent owner to cover expenses, year after year, is not a viable long-term plan.”

Mr. Bezos hasn’t fared significantly better at The Washington Post. Like many news organizations, The Post has struggled to carry onto the momentum it gained within the wake of the 2020 election. Sagging subscriptions and promoting income led to losses of about $100 million final yr. At the tip of the yr, the corporate eradicated 240 of its 2,500 jobs by way of buyouts, together with a few of its well-regarded journalists.

Patty Stonesifer, who crammed in as chief government final yr, known as the buyouts “difficult,” however stated they have been essential to “invest in our top growth priorities.” Employees at The Post despatched a letter in latest weeks to their high editor, Sally Buzbee, and their new everlasting chief government, Will Lewis, expressing concern over the shortage of analysis firepower for his or her tales within the wake of the buyouts.

A spokesman for Mr. Bezos didn’t reply to repeated requests to rearrange an interview for this text. In the previous, Mr. Bezos has stated that he bought The Post as a result of it was an essential establishment however needed the corporate to be worthwhile.

“I said to myself, ‘If this were a financially upside-down salty snack food company, the answer would be no,’” Mr. Bezos stated of his resolution to purchase The Post in a 2018 interview.

Time is dealing with related headwinds. The publication misplaced round $20 million in 2023, in response to two individuals with information of the publication’s monetary image. Time has weighed reducing prices within the first quarter of the yr to assist offset among the losses, one of many individuals stated.

A Time spokeswoman had no touch upon the corporate’s 2023 funds, citing a word to staff from Jessica Sibley, its chief government, proclaiming rising audiences and promoting income. In a press release, Mr. Benioff stated that Ms. Sibley was making “lots of exciting changes based on an amazing vision.”

“We are fortunate to have an amazing new C.E.O., Jessica Sibley, and she has done an incredible job restructuring the company over the last year,” Mr. Benioff wrote. “We have never had a bigger year, including Taylor Swift, driven by Jessica’s vision for the company.”

Time is exploring model licensing offers abroad, in response to an individual with information of the discussions, who stated the efforts mirror related approaches by journal corporations like Forbes and Condé Nast, which have been dependable moneymakers.

Still, there are some shiny spots within the firmament of conventional news organizations owned by billionaires. The Boston Globe, bought by John W. Henry, the proprietor of the Boston Red Sox, from The New York Times Company in 2013 for $70 million, has been worthwhile for years, in response to an individual acquainted with the corporate’s funds. Those earnings have been reinvested in The Globe, the individual stated.

The Atlantic, which was bought by Laurene Powell Jobs in 2017, has set a goal of reaching a million mixed digital and print subscribers and reaching profitability. The firm has stated it has greater than 925,000 subscribers as of final summer season, although it isn’t but worthwhile.

The difficulties dealing with the businesses are solely getting extra extreme. Web visitors has waned for a lot of publishers as referrals from engines like google like Google ebbs, and the rise of recent functions powered by synthetic intelligence has the potential to erode readership additional.

“These vitally important news publications still find themselves ‘transitioning’ from print to digital — with major ongoing legacy business costs — as they build brick by brick a mainly digital future,” stated Ken Doctor, an analyst and media entrepreneur.

Mr. Doctor stated that the billionaires within the news trade have been displaying “greater signs of fatigue,” stemming from challenges together with “news anxiety and avoidance and fierce advertising competition.”

“The very rich find it very difficult to lose money year over year,” Mr. Doctor stated, “even if they can afford it.”