Jeff Bezos, Laurene Powell Jobs and now Marc Benioff: Why tech billionaires are buying media companies
Another tech billionaire is jumping into the media business: Salesforce founder Marc Benioff and his wife Lynne Benioff announced Sunday they would buy Time Magazine for $190 million from Meredith Corporation.
Benioff is worth $6.6 billion according to Forbes, and is the CEO of the $118 billion cloud software company Salesforce.
"The Benioffs are purchasing TIME personally and the transaction is unrelated to Salesforce.com," according to a press release about the deal. Although the couple won't be involved in "the day-to-day operations or journalistic decisions," according to the release, Benioff tweeted that they have "deep respect for [the Time] organization" and are "honored to be stewards of this iconic brand."
Benioff is just the most recent tech billionaire to buy a media company.
In July 2017, The Emerson Collective, an organization run by the philanthropist and billionaire widow of Apple's Steve Jobs, Laurene Powell Jobs, bought a major stake in The Atlantic magazine.
The 160-year-old publication is "one of the country's most important and enduring journalistic institutions," Jobs said in a July statement, and Emerson Collective planned to "ensure that The Atlantic continues to fulfill its critical mission at this critical time."
Billionaire Jeff Bezos says he bought the Washington Post for similar reasons, even though the newspaper had been losing revenue for several years before he came on board.
"I said to myself, 'If this were a financially upside down salty snack food company, the answer would be no,'" Bezos told an audience at the Economic Club of Washington, D.C. on September 13 about agreeing to buy the company. "But as soon as I started thinking about it that way, it was like, 'This is an important institution.' It is the newspaper in the capital city in the most important country in the world. The Washington Post has an incredibly important role to play in this democracy, there's just no doubt in my mind about that."
Bezos purchased the Washington Post in 2013 for $250 million through his company Nash Holdings LLC.
In June, former surgeon and biotech billionaire Patrick Soon-Shiong bought the Los Angeles Times, the San Diego Union-Tribune and several community newspapers for $500 million. He told CNBC earlier this month that he doesn't view other newspapers as "rivals" but as "industry compatriots."
"I think we need to defend the whole area of democracy in which these newspapers are really another Fourth Estate," Soon-Shiong said.
While one might think billionaires also become involved with media as a mechanism of power and influence, Joshua Benton, the director of the Nieman Journalism Lab at Harvard, suspects their motivations are less circumspect.
"I think a bigger factor is that media is comparatively cheap and a pretty fun business," Benton tells CNBC Make It. "Being someone who owns a significant cultural institution feels good."
"I think you could make an argument that certainly Jeff Bezos has more influence in Washington now than he would if he had not purchased the Washington Post, but I'm not sure that I see as readily how Benioff's purchase would impact his influence," Benton says.
"Why do wealthy individuals support the ballet or art museums? I think it's a mixture of things. For some, it's a sincere appreciation of the art form, and a desire to see if flourish. For some, part of it is a sense of civic responsibility... another part of it is certainly, it helps establish your social place.
"A lot of media purchases fall into that territory," Benton adds. Of course, it doesn't hurt to be watchful. "It is 100 percent reasonable for anyone to monitor the output of a news organization that has changed ownership and be on the look out for any changes," he says.
But even if a billionaire with good intentions is buying, media companies struggling under shifting business models won't find a quick fix, Adam Penenberg, a professor and the director of undergraduate studies for New York University's journalism department, tells CNBC Make It.
Benioff's purchase "won't save Time magazine from the threat of being shut down if it can't figure out a revenue strategy," Penenberg says. "Because what happens when this billionaire gets tired of losing money?"
For example, after Facebook co-founder Chris Hughes bought The New Republic magazine in 2012, he sold it just four years later, after spending over $20 million to revamp the outlet, Penenberg explains. Another example he points to is the Village Voice, a local publication in New York.
In 2015, the Village Voice was purchased by Peter Barbey, a wealthy investor who "vowed to invest in the paper and once again make it relevant in the cultural life of New York City," The New York Times reported that year. In August, the publication closed for good.
"Having one rich billionaire owner can also work out, of course. Jeff Bezos bought the Washington Post, and the Post seems to be thriving," Penenberg adds. "But having a person with means buying your media property does not ensure its long-term viability. Only one things does: a successful revenue-generating plan or plans."
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This article has been revised and corrected to reflect that Emerson Collective is not a non-profit. It is an updated version of a previously published story.
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