Topic: Newsmax
Earlier, we highlighted how the Washington Times is adjusting to life without a deep-pocketed right-wing benefactor to cover literally billions of dollars in losses. Now, another right-wing newspaper heretofore protected from the free market is making a similar adjustment.
Trib Total Media, which operates the Pittsburgh Tribune-Review and other media holdings of right-wing financier Richard Mellon Scaife -- who died last year -- announced last week that it was laying off 153 people and will combine its three Pittsburgh-area properties into a single newspaper. It also claims that if two other papers can't be sold, they will be shut down, eliminating another 91 jobs.
As bad as that situation is, it could have been even worse. The Pittsburgh Post-Gazette (the Tribune-Review's competitor) reports that according to the Scaife estate's inheritance tax report, Scaife loaned the Tribune-Review $147 million, which the estate considers to be uncollectible, which would have the side effect of lowering the value of the estate for tax purposes.
And that's just what's documented by the estate in promissory notes. It's possible that Scaife may have given the paper even more money off the books.
The layoff announcement also contains this interesting tidbit:
We have taken steps over the past several months to build out our digital presence. First, through Mr. Scaife’s estate, our new affiliate, 535 Media, LLC, has acquired 40 percent of the stock of Newsmax Media which is a proven national leader in digital news. We also plan to launch a joint venture with Newsmax, through our affiliate, in early 2016 that will allow us to add to our digital offerings and to expand our national reach.
The Tribune-Review announcement doesn't state how a money-losing organization such as itself could afford to buy 40 percent of Newsmax. The Pittsburgh Business Times makes the connection clearer: That piece of Newsmax is what Scaife owned, and Trib Total Media was bequeathed those shares in Scaife's will.
The Business times also quoted Trib Total Media president and CEO Jennifer Bertetto describing how Newsmax will help its online offerings: one plan is a website that will serve as "a local and national news source targeted to baby boomers that will have a local marketplace aspect and we plan to monetize it through various email marketing concepts that NewsMax has really mastered." Given that Newsmax's "email marketing concepts" tend to center around dubious fianancial schemes and even more dubious health schemes, that may not be the best approach.
Newsmax is affected by Scaife's will in another way: The Post-Gazette writes that Newsmax CEO Christopher Ruddy was awarded $250,000 in the will.
All the cost-cutting demonstrates that Trib Total Media has to try to be a profitable business, even with having $147 million in debt apparently written off. Newsmax, as far as we know, does make money, and the question going forward will be how much the money-making parts of Trib Total Media, like that 40 percent share of Newsmax, will tolerate the money-losing parts.
