ESOPs in newspapers, what’s been the experience?

The other day I wrote about Understanding the Tribune ESOP considering the multi-faceted aspects of employee ownership. But what about the Trib’s ESOP in the context of other newspaper ESOPs? In that light, the Chicago Tribune ESOP will be a unique venture. While there have been successful newspaper ESOP models, there have been none in large newspaper chains or large daily metro papers like the Trib.

One smaller newspaper ESOP success story is the Milwaukee Journal. Alan Mutter, a former journalist now consultant to communication technology start-ups writes about the Journal in his blog, Reflections of a Newsosaur. The Journal ESOP participants struck it rich when the paper did an IPO.

Newspaper ESOPs have been done in other countries. According to Marc Mathieu, head of the European Federation of Employee Share Ownership, some major newspapers in France had a controlling employee share ownership since the 1970s or even earlier. For instance, France’s paper of record, Le Monde and Libération. And like all newspapers, they are struggling to compete against the "new media", e.g., news enabled communication devices like iPod, cell phones and Blackberrys. At both papers, employee shareholders have had their say in the management and being represented on the Boards of Directors. Which will not be the case with the Tribune.

But it’s not just the financial aspects of the deal that are important. The success of this deal also depends on whether an ownership culture will be developed.