CASE STUDY:Profit versus professional obligation
Individual Journalist: Jay Harris
On March 19, 2001, Jay Harris, publisher of the San Jose Mercury News resigned. Harris’ stated reason was that he felt that Knight Ridder (parent to the Mercury News) had put profit goals above fulfilling the public trust. In his resignation letter, Harris stated that the demand for higher profit margins would “necessitate deep and ill-advised staff and expense reductions at the Mercury News [that] . . .would poorly serve our readers, our advertisers and Knight Ridder shareholders.”[i]
Earlier, executives of the Mercury News and Knight Ridder had met to discuss how to respond to the sharp decline in the newspaper’s ad revenues and how best to achieve the company’s goals for the year. According to Harris, what troubled him the most was that there was “virtually no discussion of the damage that would be done to the quality and aspirations of the Mercury News as a journalistic endeavor or to its ability to fulfill its responsibilities to the community.”[ii] The budget cuts proposed by management would have included newsroom layoffs—layoffs that Harris thought would severely damage the paper’s ability to fulfill its obligation to the public it served.
Harris had argued that the Mercury News could achieve the near-term goals sought by management, but that those savings would be “more than offset by a long term diminution of the vitality and potential profitability of Knight Rider’s Bay Area franchise.”[iii]
Knight Ridder CEO, Tony Ridder, had a different perspective and questioned Harris’ framing of the issue.[iv] According to Ridder, the effects of the bursting of the high-tech bubble in 2001 had strong repercussions throughout the entire economy, including, especially, media supported by advertising. Noting that the Mercury News specifically serves the “high-tech heartland,” Ridder pointed out that the paper is directly subject to the ups and downs of the economic roller coaster of Silicon Valley. Ridder also suggested that the primary commitment of a publisher, such as Harris, should be to “the ongoing health of the underlying enterprise.”
Ridder and Harris also differed on several details. According to Ridder, potential newsroom layoffs were not the reason for Harris’ resignation. In fact, such layoffs, said Ridder, were contemplated by Harris himself prior to the executive meeting in March. Ridder also disagreed that the quality of news would suffer, even if the news staff were smaller.
News analyst John McManus backed Harris’ position when he pointed out that as long as customers are “able to distinguish high low quality goods, enjoy choices, and those choices don’t harm society… it may be reasonable—even a moral duty—for executives to maximize shareholder profits.”[v] However, he wonders what happens to society when all but a handful of daily newspapers are owned by monopolies and when the executives in charge “try to generate the largest possible audience at the lowest reporting cost?” He suggests that while shareholders will probably come out ahead in the short-term, “most of us will lose in the long run.”
Ultimately, according to Harris himself, the resignation was over a “fundamental disagreement over business strategy and an equally fundamental disagreement over whether the company’s values and priorities had been changing over the years.”
“My argument… is that a freedom, a resource so essential to our national democracy that it is protected in our Constitution should not be managed primarily according to the demands of the market or the dictates of a handful of large shareholders.”[vi]
CASE STUDY QUESTIONS
- Who do you see as the moral claimants in this case? List all of them.
- In what ways is a publisher obligated to them? Use Ross’s duties of obligation to help you here.
- How do you reconcile the tension between turning a legitimate profit and serving the public interest? Can a balance be struck? Who is hurt by leaning too far in either direction and what could you do to minimize that harm?
- Given that, in this case, the publisher himself is obligated to the parent organization to turn a profit, what do you think Harris’ options were? List at least three alternatives.
- Do you think Harris made the right decision in resigning? Why or why not?
[i] Jack Hart, Nomination for the Payne Awards for Ethics in Journalism, April 2002.
[ii] Jay Harris, “Remarks to the American Society of Newspaper Editors,” April 6, 2001.
[iii] Ibid.
[iv] Tony Ridder, “Mercury News Will Remain Strong In Hard Times,” Poynter.org, “Today in Journalism,” April 11, 2001.
[v] John McMannus, “Does Wall Street Have to Trump Main Street,” gradethenews.org, February, 13, 2002.
[vi] Harris, “Remarks to ASNE.”
