Objectivity is the hallmark of a quality publisher. It’s also one of the first disciplines sacrificed by publishers when evaluating their children’s suitability for taking over the family’s newspaper. More than any other decision the choice of a successor demands ruthless honesty.
Whether you call it the “folly of fondness” or the “fog of war” an ego driven succession decision can create a disaster for both family and fortune.
Through many years of consulting publishers I’ve developed a series of five questions through which the family succession decision should be filtered.
Is a move into the publisher’s chair something the next generation wants independent of whether or not it pleases mom and dad? The initiative must come from your son or daughter. Many publisher parents intimidate their offspring into “pleasing” them. This is a formula for failure.
Is the next generation highly motivated to take on the full range of management and ownership responsibilities and obligations that go with the terribly intense business of newspaper publishing? These include sweating the ups and downs of advertising sales, collections, debt service, and all the many and continuous personnel problems that inevitably land on the publisher’s desk. Is there a special spark or “fire in the gut?”
Does your potential family successor have the appropriate education, both formal and more important in-the-trenches-training? Does the new generation have the mature judgment required for motivating personnel to excel? Publishing is a people-driven profession! Regardless of the quality of your genetic pool it’s no substitute for a street-savvy track record!
The next generation’s willingness to accept marketplace reality often is the litmus test, forcing honest answers to the other questions. Generous terms might be appropriate; however, a price give-away distorts important realities. Mom and dad publishers have a right to expect full market value for their life’s work. A fully executed purchase and sale agreement with all its attendant trimmings is essential.
Go It Alone?
And finally, is your next generation willing to go it alone? As the selling publisher, you have a right to get on with your retirement plans without regard for the newspaper’s operation. Are you capable of letting go? If not perhaps you harbor doubts about your chosen successor, or you’re not ready for retirement.
Your successor search “process” should start with an expert appraisal of your publishing property. Second, ask the newspaper appraiser to recommend an appropriate buyout structure including down payment and terms for prudent seller financing. Share this information with your progeny as you both work through our five questions.
In the absence of a highly qualified successor prudent estate planning dictates liquidation of those assets requiring extraordinary enthusiasm, boundless energy and high degree of management expertise.