Why Sheldon Adelson and Jack Ma will regret buying their newspapers

In general, it’s a lot easier to turn money into power than it is to turn power into money. But there are time-tested ways of doing the latter, and among them—even today, even after two decades of disruption by the internet—is buying a major municipal newspaper.

At the end of last week, two such newspapers were sold: the Las Vegas Review-Journal, for $140 million, to Sheldon Adelson; and the South China Morning Post (SCMP), for $266 million, to Chinese internet giant Alibaba, which is controlled by Jack Ma.

Both prices were significantly higher than the market value just a few months earlier, and neither of the two billionaires has previously shown any interest in entering the print-media business. So what are they playing at?

One hint comes in the fact that both of the moguls have had unpleasant experiences in the past at the hands of journalist-employees of their new papers. Adelson bankrupted Review-Journal columnist John L. Smith over a brief passage in his book about Las Vegas; Ma found himself at the center of a major scandal when the SCMP quoted him as saying the massacre at Tiananmen Square on June 4, 1989 was “the correct decision.”

Most people who aren’t big-shot businessmen tend to imagine that they have much more important things to worry about than what’s written about them in print or on the internet. But those of us who write about big shots for a living know that they often have surprisingly thin skin, read everything that’s written about them, and can react with astonishing fury to even relatively modest perceived slights. They will complain to the journalist, the journalist’s editor, the editor-in-chief, the publisher, the CEO, the proprietor, and anybody else they can think of at the company. They will nearly always threaten lawsuits; sometimes, they will even file them. Used to getting their way, they will apply enormous pressure in multiple places. It’s something which all news organizations are deeply familiar with, but the sheer scale of it is almost never seen, since it’s all done through back channels, in private.

So it’s easy to understand why the idea of buying such a publication might be attractive. “People don’t really understand China and have the wrong perception of China, they also have a lot of misconceptions about Alibaba,” Joseph Tsai, Alibaba’s executive vice chairman, told the New York Times, with the clear implication that under Alibaba’s ownership, that is going to change. From here on in, it’s a safe assumption that the SCMP will be operating under implicit or explicit instructions to portray Alibaba in particular, and China in general, in a more positive light. (One fascinating test will come on June 4, when the paper always publishes a powerful front-page photograph of the Tiananmen Square memorial demonstrations in Hong Kong. There’s a good chance that in 2015, for the first time, it won’t.)

In Israel, Sheldon Adelson, a far-right Republican, has used his newspaper to try to get his own chosen candidate for prime minister elected; he will surely be thinking along similar lines at the Review-Journal. (Nevada is not only Adelson’s home state; it’s also a crucial primary state.)

But neither man has really been on the receiving end of the kind of complaints they’ve both been good at dishing out. Ma in particular is going to start getting phone calls from the one Chinese ministry he hasn’t had to worry about until now: the propaganda ministry. And those are the kind of calls which no Chinese billionaire wants to start saying no to. Meanwhile, journalists simply don’t behave like other kinds of employees. They don’t react in the same way to incentives, and if you promise them editorial independence, they will hold you to that promise and raise a huge stink every time you try to interfere.

The result, in the words of Minky Worden, the director of global initiatives at Human Rights Watch and a self-proclaimed “veteran Hongkonger,” is that Ma has “reached out and hugged a hornet’s nest.” He wants to be a hero to the authorities in Beijing, but in reality he’s going to be the locus for a whole slew of complaints from various Chinese power centers.

The SCMP has always reflected the position of the Hong Kong establishment, and as the Hong Kong establishment becomes increasingly dominated by people sympathetic to the policies of the Chinese Communist Party, it’s probably unsurprising that its ownership is moving to the mainland as well. (Up until now the owners, while ethnically Chinese, have been based in Singapore.) But while this move was surely welcomed (and was maybe even orchestrated) by the powers in Beijing, Jack Ma’s personal upside is much less obvious. From here on out, he’s going to be facing an almost daily choice between annoying powerful people, or annoying his employees.

Adelson, too, has clearly got off to a very bad start with his new paper, all but daring its journalists to uncover his identity after refusing to divulge it when he first made the purchase. There’s a lot of mistrust there, and he’s not going to find it easy to get the Review-Journal staff to do his bidding. Meanwhile, every Republican presidential candidate, as well as the various candidates in Nevada and Las Vegas, will want Adelson to deliver not only campaign donations, but also the Review-Journal endorsement. He won’t be able to please them all, and will therefore make enemies he’s never before had in the Republican party.

It won’t take long, then, I suspect, before Ma and Adelson understand why newspapers are best owned by news organizations, and tend to cause nothing but trouble for billionaires who buy them on a whim. It might have seemed like a good idea at the time, and they have definitely each bought themselves a base from which to exert significant power in Hong Kong and Las Vegas, respectively. But I’m reasonably confident that both men will have reason to regret their purchases in the months and years to come.