Cablevision Systems Corp. and the Tribune Co., which owns Newsday, are moving to take their businesses private. And Rupert Murdoch, chairman and chief executive of News Corp., is looking for a little respect, some say, with his $5 billion bid for Dow Jones & Co. and its Wall Street Journal.
Analysts and media experts describe it as the transition and turmoil that has become a reality for media companies.
Low stock prices fuel the restlessness of shareholders -- a situation that has led to the breakup of Knight Ridder and Tribune Co. going private and now is bringing some of that turmoil to Dow Jones, said John Morton, of Morton Research, a media consulting firm in Silver Spring, Md.
Media companies are struggling to regain their footing in a market in which many giants once were monopolies, he said.
"At the same time, this weakening newspaper performance is in part due to readers' and advertisers' migration to the Internet," Morton said. "All these things have gone into creating uncertainty and in uncertainty, things tend to happen."
While there is much angst over the industry's current state and talk of the demise of old media, there are still many who see opportunity in these companies, analysts have noted. Many of these companies are still very profitable, just not offering those high profit margins of the past, they say. Old expectations need to be readjusted.
"They have to adapt their business model to the changing realities," said James Goss, media and entertainment analyst at Barrington Research. "Part of the challenge is that the new business model is not going to replace the dollars that are lost that you had with the old business model. Ultimately, it might be better, but it's not likely to be in the transitional phase."
The trick is for news companies to realize their strength and value is in their content, said Porter Bibb, a managing partner of Mediatech Capital Partners. He said he was heartened to hear the statement by Sam Zell, the billionaire instrumental in taking Tribune private, that newspapers can no longer afford to give their content away to search engines like Yahoo and Google.
"I think it's amazing that no manager of any newspaper company and old media has said, 'It's time for us to stop giving Google and Yahoo a free lunch,'" Bibb said. "It's time to make them pay for what they eat."
As with large companies in other industries, the privatizing of media companies can allow for a different management style, a flexibility not possible in a public company and a focus on long-term results, said Joel Evans, distinguished professor at the Frank G. Zarb School of Business at Hofstra University.
But the attractions of privatization are not for all companies. The Long Island Business News' parent company, Dolan Media Co., is heading in the opposite direction and filed to go public. Going public means an opportunity to raise capital and grow faster. As the owner of smaller newspapers, the company is less threatened by the Internet, Bibb said. Minneapolis-based Dolan Media owns niche publications in 19 markets.
In the case of Tribune Co., much will rest on the intentions of Zell and who he brings in to manage the company, media experts said. They question whether Zell's heart is truly in media and whether he wants to build the multimedia company or sell off pieces, they said.
Evans noted that despite the advantages of going private, Cablevision faces competition from Verizon and others and is going to be under "tremendous pressure" to pay down the large amount of debt the company will be carrying.
"From the competitive landscape, I don't know if it ultimately makes a difference," Evans said. "Whether public or private, they have to be customer-oriented, and the big battlefield is the bundling [of services]."
