Newspapers and other advertising media are paying the price for allowing the investment community to become their absentee owners, the head of a Texas-based newspaper chain said last week.
"We, as a country, have lived the good life in the '80s. We're paying the price for it in the '90s," W. Dean Singleton, chief executive officer of MediaNews Group, Houston, told Brigham Young University communications students.The news media is suffering through its worst economic slump in 30 years, Singleton said, largely because of leveraged buyouts popular in the 1980s that resulted in excessive debt.
Retail, national and classified advertising all are down at the same time, and that has never happened before, Singleton said. But he predicted time will resolve the problem.
Many retail and other companies that fell into the hands of financial people through junk-bond financing will go bankrupt, he said, and then will "become affordable to those who know how to run them."
"The sooner we get the financial investors out of most of our businesses, and especially the media, the faster we'll return to normal.
"Wall Street may own the stock of some of these companies, but the investors won't run the business."