Libel in the new era

Two apparently unrelated stories in and about the New York Times on Friday caught my eye since, put together, they may suggest the risks presented by threatened libel actions in the new newspaper economy.

In the four and a half decades since the court handed down its decision in Times v. Sullivan, major newspapers have been wealthy enough to withstand the risks and threats of libel actions. In the Sullivan case, the Alabama court originally ordered the paper to pay $500,000 to Sullivan, and the Times faced eleven other suits that, collectively, could have cost it $6 million. One apparent purpose of those suits was to intimidate the Times and to reduce the aggressive coverage of the civil rights movement in the south. One probable contributing motive for the court’s sweeping decision making it difficult to recover for claims of libel was the court’s belief in the importance of press coverage of the civil rights movement.

In the decades after Times v. Sullivan, the courts continued to expand the protection against libel claims, making it more and more difficult to recover, particularly for public officials and public figures. At the same time, the mainstream media became more and more wealthy, making it easier for them to be self-insured and to fight off almost all libel claims.

Might that be changing? One story in the paper yesterday revealed that for the first time in 40 years, the Times Company has decided to forego any dividends in order to save $35 million. You can find that sory here: http://www.nytimes.com/2009/02/20/business/media/20times.html?_r=1&scp=1&sq=times%20dividends&st=cse. The decision makes sense in today’s horrific financial climate, but would have been unthinkable just a couple of years ago when the company was spending more than a billion dollars on the purchase of the Boston Globe and on a new headquarters building.

A separate story reported that the Times had settled a lawsuit filed by Vicki Iseman, a Washington lobbyist with close ties to Senator John McCain. Some readers felt that the story implied that Ms. Iseman and Senator McCain had a romantic relationship. As Clark Hoyt, the Times’ ombudsman, explained: “judging by the explosive reaction to the 3,000-word article, most readers saw it as something else altogether. They saw it as a story about illicit sex. And most were furious at The Times.”

Apparently the settlement does not require the Times to pay any money to Ms. Iseman or to “retract” its original story. It requires the paper to let Ms. Iseman’s lawyers present their views on the paper’s website. You can read that story, along with related links, here: http://www.nytimes.com/2009/02/20/business/media/20lawsuit.html?scp=1&sq=times%20libel&st=cse. Also, without “retracting” the story, the paper did run a joint statement as well as a “Note to Readers” in the print edition that retracts the implication of the story, or what Clark Hoyt felt that “most readers” felt that the story implied. The note says: “The article did not state, and The Times did not intend to conclude, that Ms. Iseman had engaged in a romantic affair with Senator McCain or an unethical relationship on behalf of her clients in breach of the public trust.”

In one sense, this is a triumph for the web. It provides the print media with a new method of dealing with the complaints of those who feel that they have been libeled or at least treated unfairly. They don’t have to print every element of a retraction or directly present the plaintiff’s point of view in their newspaper or magazine. They can use the web for that purpose. In some respects this is also a major advance for the complainants. They can have their views presented more completely and, perhaps, to settle a libel case with less expense.

But it also may suggest that newspapers may have started to become more concerned about the expenses of libel suits – both the costs of a defeat and the costs of litigation. It may represent one more thing to worry about in the era that seems to be upon us.

Will Tycoons Save or Ruin Newspapers?

Today's New York Times quotes Roy Greenslade of The Evening Standard as follows: "There are five reasons for owning newspapers, and all begin with a P: profit, propaganda, political influence, prestige and public service. There's no profit in The Standard,so you've got to look at the other things." His comments were provoked by the fact that The Standard is about to have a new owner: Aleksandr Y. Lebedev, the former K.G.B. spy who has become a billionaire banker.

Greenslade's formula resembles the ownership typology that I set forth a year ago in a paper called "Leading the Way to Better News: How the Powers that Be became the Powers that Were." But something essential has changed during that year. The profit motive has become elusive, at best, and now seems more fit for nostalgia than investment decisions. Hopefully new solutions, or a turnaround in the national economy will lead publications back to profitability. But the sugar-daddy solution is looking more and more attractive - and inevitable.

Enter Carlos Slim, the Mexican businessman, second richest man in the world, and now savior of the New York Times. No doubt we will quickly learn more about what Carlos Slim and the Times have in mind. Maybe his loan/investment is a temporary fix. But for papers owned by companies that have no other major source of income - companies that were not as wise as the Washington Post Company, which is kept profitable by the hugely successful Kaplan, Inc. - the tycoon solution may become an increasingly common "solution." If that happens, hopefully their primary motive will be prestige and public service, not propaganda and political influence. But don't count on it.

The Role of State Run News Media

As the commercial news media in the US reduce their newsrooms, will news consumers start to rely more and more on international sources, some of which are state funded? Certainly the BBC has become a much more important source of news for a great many Americans, thanks to the availability of the BBC on the web. Will we begin to rely on other news outlets such as Al Jezeera, which is now available on the web in English (but not on many cable systems, which is another topic)?

According to a report in the New York Times this morning, "Chinese state-controlled news organizations plan to spend billions of dollars" to acquire international media assets (heaven knows there are plenty for sale), to open "overseas bureaus" and to generate more content in English and other languages. The United States has made similar efforts in other countries over the years, but we are not used to having an international competitor with such vast resources enter the field.

Interestingly, while other countries are using government money to fund news stories that will be read in America, and may well make their way into blogs and other news aggregators, America's own international news programs cannot be distributed in this country. Our Center on Communication Leadership and Policy hosted a conference on that topic in Washington yesterday. But thanks to the web, you can access VOA on the web, and VOA stories are the fifth most used source of news on the Google aggregator.

The development and use of international sources of news, including those that are state-funded, will be an interesting thread to watch and discuss during the term.

Geoffrey Cowan