Would You Like A Free Daily Newspaper With Your Free Lunch?

The Power Of One: Sheldon Adelson's personal fortune of $US20 billion allows him to subsidise the distribution of a free daily newspaper throughout Israel. Unable to compete with their far-right rival, Israel's left-wing newspapers face ruin. What would happen to New Zealand's mostly Australian-owned print media if the world's richest woman, Gina Rinehart, attempted to do something similar across the Tasman?

 

A FREE DAILY NEWSPAPER. Just imagine being able to walk into your local dairy and pick up a big, fat, all-sections, all-subjects daily newspaper without paying a cent. Imagine that newspaper being delivered free-of-charge to your front door. Imagine its impact on newspaper publishers who still expected you to pay for their product.

 

Impossible, you say. Sure, we have give-away newspapers now, but they only arrive in our letter-box once or twice a week, and because they’re paid for by advertising sales the editorial content is pretty thin. A genuine daily newspaper, with all the editorial content that term implies, simply couldn’t be financed from advertising alone. The revenue from advertising would have to be augmented by over-the-counter-sales and subscriptions. So, a “free” daily newspaper must remain a pipe dream.

 

Not necessarily. If you were on the streets of Tel Aviv today you could pick up a copy of Israel Hayom for free. The paper was launched five years ago as a five-days-a-week publication, and in November 2009 added what it describes as “an expansive weekend edition”. A free daily newspaper already exists.

 

But how? What’s the Israelis’ secret? How can such a publication possibly break even? Is Israel’s economy really so buoyant that it can sustain a daily newspaper funded exclusively from advertising sales?

 

Well, no, it isn’t. Israel’s economy, like every other country’s, is feeling the squeeze of the global financial crisis. Not surprisingly, Israel Hayom runs at a substantial loss.

 

But who on earth has so much money that he can afford to run a large daily newspaper at a loss? He’d have to be a billionaire.

 

Indeed he would, and that’s exactly what Sheldon Adelson, the man behind Israel Hayom, is – twenty times over. Mr Adelson made his fortune in the casino business and now he’s using it to support his favourite right-wing politicians. Over the past three or four months he has donated $US10 million to “Restore Our Future” – a political action committee backing the Republican Party’s presidential candidate, Mitt Romney. At home, through Israel Hayom, his money is being used to promote the policies of Prime Minister Benjamin Netanyahu and his right-wing Likud Party.

 

All a little unsettling. But, in a free country, doesn’t Mr Adelson have every right to set up and run his own newspaper – even at a loss? Well, possibly. Perhaps a more pertinent question might be: Does Mr Adelson, by so ruthlessly under-cutting his competitors, have the right to drive them out of business?

 

Israel, like the United Kingdom, is a country where most of the daily newspapers take an openly partisan position. Mr Adelson, by under-writing Israel Hayom’s losses is putting this politically diverse media environment at risk. Slowly but surely, the daily newspapers representing the Left of Israeli politics are being driven towards insolvency.

 

According to McClatchy Newspapers’ Sheera Frenkel:

 

“Haaretz, Israel’s most prominent left-wing daily, didn’t publish a print edition [last] Thursday for the first time in three decades as layoffs threatened much of the staff. Maariv, one of the country’s largest newspapers, has announced that it might switch soon to Web-only distribution with a weekend print version; the alternative, the paper has said, is closing.”

 

All very sad. But Israel and its newspapers are a long way from New Zealand. Our media environment is quite different. Surely, nothing like Israel Hayom could happen here?

 

Not here – not yet. But what about across the Tasman? In Australia (where most of New Zealand’s daily newspaper publishers are based) another billionaire, the mining magnate Gina Rinehart, is locked in a very public dispute with one of her country’s largest media corporations, Fairfax Media. Ms Rinehart, currently a major Fairfax shareholder, is unhappy with the corporation’s political and business coverage and is accused by her critics of seeking to influence its newspapers’ editorial direction.

 

What would happen to Australia’s print media environment if Ms Rinehart decided to adopt Mr Adelson’s strategy? How long could the already financially fragile Aussie media survive the competition of a free daily newspaper, subsidised out of the extremely deep pockets of the world’s richest woman?

 

And if the Sydney Morning Herald, Daily Mercury and Rupert Murdoch’s Australian were to suffer the same fate that appears to be awaiting Haaretz and Maariv, how would that impact the future of the Australian-owned mastheads dominating New Zealand’s print media?

 

If the future of the print media belongs to those with the deepest pockets, then perhaps it is time to start thinking about the creation of a publicly-funded, editorially neutral (and that neutrality would need to be guaranteed by statute) national (with a small “n”!) newspaper? Democracy requires a well-informed electorate, which, in turn, requires a truly independent news media.

 

New Zealand democracy is far too important to be entrusted to newspapers wholly owned and influenced by right-wing billionaires.

 

This essay was originally published in The Press of Tuesday, 9 October 2012.