Billionaires on the March to Control Dissemination of News

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(Jim Gutenberg)  At first blush, the secret support that the Silicon Valley billionaire Peter Thiel provided for Hulk Hogan’s lawsuit against Gawker is a salacious yarn about money, power, gossip and revenge.

But it is also about something more important: an aggressive bid by the very wealthy to control the U.S. news media at a time when it is in a financially weakened state, struggling to maintain its footing on the electronic frontier’s unstable terrain.

Speaking with Andrew Ross Sorkin of The New York Times on Wednesday, Thiel said he had financed the Hogan lawsuit — which resulted in a $140 million verdict against Gawker — not only because Gawker Media wrote in 2007, against his wishes, that he was gay, but also because he had determined the gossip site had too often operated with “no connection to the public interest.”

His verdict rendered, Thiel had the resources to swap his judge’s gavel for an executioner’s sword. Should the $140 million verdict stand up to appeal, Gawker Media will most likely cease to exist as we know it. And if too much of Gawker survives, Thiel, with an estimated net worth of $2.7 billion, indicates he will keep financing anti-Gawker lawsuits to kill off whatever is left.

Thiel’s campaign is in keeping with the pledge his favored candidate for president, Donald Trump, made to ease barriers to lawsuits against journalists. But it is actually the flip side of the media realm’s new coin. Many of his fellow billionaires have gained control of news organizations by buying them or starting them.

The most striking example can be found in Nevada, where conservative casino magnate Sheldon Adelson bought The Las Vegas Review-Journallast year. Adelson is not shy about using his money to influence the politics of his state and country. And the sale was followed by reports of editors suddenly altering articles about Adelson’s business dealings to put them in a more flattering light, or holding from publication articles about him altogether.

But, as my colleague Sydney Ember wrote Monday, Adelson — who denies meddling — also brought welcome financial muscle to the newsroom, allowing it to make new hires and equipment upgrades.

Some in Utah voiced concern when a member of the wealthy and influential Huntsman family, Paul Huntsman, moved to buy one of the state’s two major dailies, the struggling Salt Lake Tribune. Huntsman’s brother, Jon, is a former Utah governor who ran for president in 2012. His father, Jon Sr. — the chief generator of the family fortune — has had a prominent role with the Mormon church. As The Associated Press reported, this worries some civic leaders, given that The Tribune stands as an independent counterbalance to the church-owned Deseret News.

Paul Huntsman has pledged to protect the newspaper’s independence, and if he keeps his promise he could be more akin to the relatively new billionaire owners of The Washington Post (Amazon founder Jeff Bezos) and The Boston Globe (investor John Henry). Their newsrooms have praised them for delivering badly needed resources — and, in Henry’s case, starting a whole new life sciences news outlet, Stat — while staying out of the way of the journalism, including The Globe’s coverage of the Red Sox, which Henry also owns.

But billionaires do not become billionaires by being passive about their own interests. In other instances, once wealthy individuals are involved, those interests can appear to take over. Michael R. Bloomberg has built Bloomberg News into a formidable organization. But when its founder seriously contemplated a run for president, Bloomberg News editors steered their reporters away from covering it.

Last month, some staff members at The Washington Post reported on concerns some Huffington Post staff members had with the apparent promotion of “The Sleep Revolution: Transforming Your Life, One Night at a Time,” the book that its editor-in-chief, Arianna Huffington, wrote about reversing the trend of sleep deprivation. Some of the coverage included tie-ins to Uber, on whose corporate board Huffington sits. (The Huffington Post has defended the coverage as appropriate and said Huffington would recuse herself from news decisions involving Uber.)

Of course, powerful media executives have long been part of the global fabric. Rupert Murdoch, the News Corp. executive chairman, has been at it for decades, and his influence over his news group has taken on mythical status.

And long before Murdoch, there was one William Randolph Hearst, who defined what it meant to be a media mogul.

But there is a difference between Hearst and the many billionaires who are trying to control today’s news media, said David Nasaw, author of the great Hearst biography “The Chief: The Life of William Randolph Hearst.” “Hearst made it abundantly clear — ‘This is my newspaper, these are my views, take or leave it,’” he said. “Hearst put his editorials on the front page, with his picture, and he signed them, for God’s sake.”

Nasaw, on the other hand, sees Adelson as “dissembling” when he says he isn’t involving himself in editorial decisions at the paper. And then there are the Silicon Valley moguls, he said, who “try to have it both ways — they try to say, you know, ‘Oh no we’re playing by the rules and we’re not indulging in our personal whims.’”

It was a reference, of course, to Thiel. Already famous for helping to start PayPal, Thiel has presented an innovative take on the old practice of media control — devoting his almost unlimited means to lawsuits that promise to shutter a news organization he does not like, as Felix Salmon wrote in Fusion this week.

He is also tied to a dominating new force in news, Facebook, which has spent the last couple of weeks addressing a report in the Gawker-owned technology site Gizmodo that said some staff members kept conservative news items off the Facebook trending list.

Thiel, an early investor in Facebook and a current board member, attended a meeting Facebook founder Mark Zuckerberg held last week with prominent conservatives, at which Zuckerberg said the company was committed to preventing such behavior. A lot rides on that commitment.

Because Facebook has something Hearst never had: power over the distribution of content from most major American news organizations, which increasingly rely on exposure to the huge audience Facebook provides. Facebook has said no one person or even group of people controls what news its algorithmic formulas spit out for individual news feeds.

Facebook is being inundated with questions about whether Thiel’s attempt to shut down a media company through the courts would jeopardize his board seat. Facebook would not comment on his involvement in the Gawker suit. But the news of it could not come at a worse time — for Facebook, and for the rest of us, too.


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