Podcasts | February 25, 2019

Is it impact investing when billionaires buy newspapers and news magazines?

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When Salesforce CEO Marc Benioff paid $190 million for Time magazine last year, he told interviewers, “One of the things that really matters to me is having a positive global impact.”

Are newspapers and newsmagazines “impact investments”? And are the billionaires who buy them making a positive impact? The roundtable regulars take up the topic of the impact of investing in news media on ImpactAlpha’s latest Returns on Investment podcast.

Benioff joined Jeff Bezos (Washington Post), Patrick Soon-Shiong (Los Angeles Times) and Laurene Powell Jobs’ Emerson Collective (The Atlantic) among the new crop of billionaires who appear to be one of the last, best hopes for serious news.   

That it’s billionaires riding to journalism’s rescue “is incredibly problematic,” says Imogen Rose-Smith, a longtime journalist and an investment fellow with the University of California. “Media-as-billionaire-vanity-project isn‘t really what you need to have a free and independent press. And you need a free and independent press if you want a thriving democracy.”

Blind spot

Of course, billionaire media moguls are nothing new, and the most recent arrivals have arguably performed a public service by rescuing some of the most storied titles in American media. The recent rounds of layoffs even at supposed digital success stories like Buzzfeed, HuffPost and Vice suggest how difficult to build thriving newsrooms.

But those difficulties pale in comparison to the challenges of say, delivering quality health care to hundreds of millions of Indians, or providing access to clean energy in sub-Saharan Africa, Rose-Smith says. “Yet both are attractive impact investing spaces. So (news media) should be an attractive impact investing industry, because it’s also a technology problem and a lot of impact investing is about technology.”

“The same kind of tools and consideration that impact investing gives to energy access or to how we reduce the prison population,” she says, “needs to be applied to ‘How do we create thriving media and effective media companies that create jobs and empower individuals?”

Yet impact investors have shied away from the challenge. “Impact investing has a blind spot when it comes to media…Impact investing wants boosterism in its coverage, and that doesn’t comfortably sit with a free and independent press.”

ImpactAlpha, of course, has itself wrestled with the challenges of building a viable media business and an independent voice. It’s true that news and journalism has largely been left out of the growing field of “civic tech,” which has focused on voting, democratic participation and streamlining local government. But innovative models are indeed arising from the rubble, even if they are not yet fully proven.

Emerging models

Nonprofit investigative newsrooms at Pro Publica, the Center for Investigative Reporting and InsideClimate News are keeping the torch alive for accountability journalism. Local online efforts such as the Texas Tribune and the Colorado Independent are filling some of the hole left by shrinking local coverage even at the newspapers that have survived.

Subscription models have come back into vogue and could help revive local news, suggests Jessica Lessin of the subscription tech publication The Information. (ImpactAlpha, which launched its subscription product last year, participated in the first cohort of The Information’s media accelerator program.)

The challenges of “fake news” and social-media manipulation may inversely raise the value of independent journalism and fact-based civic discussion. In the Philippines, the size of The Rappler’s newsroom has grown to more than 100, despite (or partly because) of harassment from the government of President Rodrigo Duterte. Editor Maria Ressa, who shared Time’s person-of-the-year honors last year, spent a night in detention this week on charges of “cyber libel.”

The Media Development Investment Fund recently raised $13 million to invest in high-quality journalism in emerging markets where a free press is under pressure.  With rising middle classes demanding reliable news, trusted media can be an attractive investment.

Impact Carry: A carrot-based approach to boosting the impact of impact investments

“Trusted journalism is a competitive advantage in places where you can’t trust anything. If the media has become untrustworthy, then trustworthy media will have an advantage,” I suggested in the podcast discussion. “I know that’s kind of pollyannish, but that’s where I’m hanging my hat.”

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