Could Gates Be the P-I’s White Knight?

Stepping into journalism isn’t foreign to the billionaire or his foundation.

If the P-I is to survive as a newspaper, it would seem to require a charitable and innovative billionaire. We happen to have a couple of those handy—and Bill Gates seems the more likely of the two.Paul Allen has been an old-school newspaper investor, having bought The Sporting News for $100 million in 2000. Unfortunately, the tab began fading in his hands, and he sold it for about half the purchase price six years later. He is not a lucky investor, despite his wealth; his cable TV company, Charter, has lost $7 billion and is near bankruptcy. And Allen himself has lost about half of his once–$30 billion fortune, Forbes says.Of couse, that might make Allen a natural to invest in the dinosaur newspaper business. But even if the loss of his hometown paper tugs at his heartstrings, he's not interested in the P-I, according to an attorney seeking to keep the paper alive. "I called his organization the moment I heard [of the P-I's sale]," says the attorney, who spoke on condition of anonymity. "They said it's 'not within our scope.'" (When asked by SW, Allen's corporation had no comment.)On the other hand, Allen's Microsoft co-founder Gates has seen merit in old news-delivery systems. His foundation is even tied in with the P-I's owner, Hearst, in a Bay Area dinosaur newspaper deal. In 2006, the Bill & Melinda Gates Foundation, along with other investors, loaned Media-News Group $350 million to buy four newspapers, including the San Jose Mercury News and the Contra Costa Times, from McClatchy (MediaNews' total line of credit from the deal is closer to $600 million). In turn, Hearst bought two other McClatchy papers in California and Minnesota, then handed them over to MediaNews for a stake in that company's operations outside the Bay Area.The $30 billion–plus Gates Foundation had no comment on the P-I's plight, referring SW to Gates' personal and foundation investment guru, Michael Larson of Cascade Investments LLC, who handled the MediaNews deal. He didn't call back. P-I managing editor David McCumber has in fact met with Bill Gates Sr., co-chair of the Gates Foundation, but says it was for advice on whom he might try to tap as potential buyers, not a bid to get the foundation to step in.The foundation does invest in journalism. Among its recent grants (as opposed to its investments) was $3.5 million in December to establish a TV production unit to report on global health issues for PBS' NewsHour with Jim Lehrer. Earlier, it gave $16 million to other media operations and journalism schools, mostly to finance better global health reporting.Still, any investment in the P-I would be done more with the heart than the head, concedes the Seattle attorney seeking a buyer for the P-I. "It's going to take a white knight," the attorney says. "And so far I haven't heard of anyone willing to step forward."

comments powered by Disqus

Friends to Follow