She Paid a Fortune for Her Hometown’s Newspaper—Then Came Years of Turmoil

From a Washington Post story by Paul Farhi headlined “She paid a fortune for her town’s paper. Years of turmoil followed.”:

When Wendy P. McCaw swept in to buy the venerable Santa Barbara News-Press in 2000, the community rejoiced. A local resident, not a distant conglomerate, had won control of the daily newspaper, a sturdy pillar of the California coastal region, whose lineage dated to the Civil War era.

But it didn’t take long for McCaw, a reclusive billionaire then in her late 40s, to become a headline-grabbing character in her own right. And the paper that had been synonymous with Santa Barbara’s transformation into “America’s Riviera” would face years of tumult and trial under its new owner — before meeting its abrupt end last month, when McCaw’s company, Ampersand Publishing, laid off the News-Press’s remaining employees, ceased publication and filed for liquidation.

For two decades, the strong-willed and litigious McCaw battled politicians and bureaucrats, local merchants, a former lover and even her own journalists. The paper’s demise is “the loudest and most self-inflicted death rattle in journalistic history,” wrote Nick Welsh, the longtime columnist for the weekly Santa Barbara Independent. McCaw once sued the Independent, too. (She received an undisclosed settlement for a copyright infringement claim.)

Santa Barbarans barely knew McCaw when she paid a reported $110 million to buy the News-Press from the New York Times Co. Photos of her were rare. Until she emerged as a bidder against three corporations, the newspaper hadn’t written a word about her.

Within months, however, she was making news for a legal squabble with her former fiancé and business partner, Gregory Parker, who claimed she had reneged on a financial agreement after he began a relationship with another woman. (An arbitrator ordered McCaw to pay $14.9 million; a court later slashed the award to $2 million.) McCaw also launched a protracted fight with the California Coastal Commission, which pressed her to open public access to a beach beneath her bluff-top estate in the exclusive Hope Ranch area. (She appealed its decisions up to the Supreme Court; she lost).

Despite pledging to preserve the paper’s independence and integrity, McCaw quickly turned its moderate editorial pages — which had won a Pulitzer Prize in 1962 for exposing the extremism of the John Birch Society — into a forum for her libertarian politics and private crusades. The paper inveighed against the Coastal Commission and elected officials who had crossed her. One editorial described three Democratic women who were elected to office as the “Twisted Sisters.” Another advocated a pet cause for McCaw, a committed vegetarian and animal rights activist: replacing turkey on Thanksgiving with rice and beans.

McCaw’s imperious style and reclusive profile earned her the nickname “Citizen McCaw,” after the cinematic counterpart of William Randolph Hearst, the legendary newspaper baron who built his fantastical castle in the coastal foothills a few hours north of Santa Barbara.

As the News-Press limped toward bankruptcy, and as the business model for newspapers collapsed in the internet age, McCaw seemed to have grown bitter about her adopted hometown. “Santa Barbara, once the gem of the Central Coast, is deteriorating into a city that is crime-ridden, graffiti-covered, with inebriated indigents and a disgusting downtown mess,” she wrote Dec. 31, 2022, in what became her final piece for the paper.

By then, the News-Press was a shell of the thriving daily that McCaw, now 72, had acquired 23 years earlier. It listed just two journalists in its employ: a managing editor and a single staff writer. Its assets totaled less than $50,000, according to its bankruptcy filing. On July 21, the newspaper filed for its dissolution in a bankruptcy court housed in a downtown building owned by Citizen McCaw herself.

For generations, the News-Press was the dominant daily paper in one of America’s wealthiest, most-educated and civically engaged markets. The sun-kissed seaside town (population: around 88,000) and surrounding region are home to the likes of Oprah Winfrey, Steven Spielberg, and Prince Harry and Meghan, Duchess of Sussex. A University of California campus sprawls across a promontory that juts into the Pacific Ocean on the west side of town. The local real estate market has long ranged from hot to molten; in June, the median listing price for a home in Santa Barbara was $2.6 million.

Many residents and former News-Press employees blame McCaw for destroying the goodwill she inherited when she bought the paper.

“It was a professional paper when the New York Times owned it,” said Kevin Young, a retired Santa Barbara real estate broker who subscribed to the News-Press for decades. Young said he grew increasingly disenchanted with the paper as it shrank and as McCaw’s political shadow fell over its opinion and news columns. “It became a nauseating way to start the day for us more left-wing California Democrats,” Young said.

McCaw — who didn’t respond to requests for comment — bought the News-Press three years after her divorce from Craig McCaw, a billionaire entrepreneur who made his fortune in the cellphone business. The division of the couple’s holdings made Wendy McCaw one of the wealthiest women in America. Forbes estimated her net worth at $2.6 billion in 2000, the year she bought the News-Press.

Although she had no experience running a newspaper, McCaw was a hands-on owner. Politicians and bureaucrats weren’t the only ones who cried foul about the News-Press’s stinging opinion columns. An arbitrator overseeing the financial dispute with Parker, her ex-fiancé, asserted in 2002 that she had used the paper to smear the man’s reputation.

Some of the same concerns about McCaw were building inside the News-Press’s newsroom, say former staffers. Despite her assurances of editorial independence, McCaw moved aside its popular and respected publisher in 2006 and named herself and her new fiancé, Arthur von Wiesenberger, as co-publishers. Von Wiesenberger, nicknamed “Nipper,” also had no experience running a newspaper. He had been the News-Press’s restaurant critic and an expert on bottled water, serving as an industry consultant and sometime judge in water-tasting competitions. He also did not respond to requests for comment.

That year, the tensions that had simmered between the owner and her newsroom exploded into public view, precipitated by McCaw’s involvement in two news stories.

The first was her directive to kill a story about the drunken-driving arrest of the paper’s editorial page editor, a McCaw appointee. The second conflict, arising a few weeks later, concerned the paper’s reporting on actor Rob Lowe, who was seeking county approval to build a mega-mansion in nearby Montecito. When the News-Press published the address of Lowe’s property, then a vacant lot, Lowe objected — and so did McCaw, who reprimanded three editors and a reporter for “careless news judgment,” according to the American Journalism Review.

The twin disputes quickly spiraled beyond the News-Press’s stately headquarters. The paper’s editor, Jerry Roberts, resigned in protest in July, followed by four other senior editors and a marquee columnist. The journalists accused McCaw of undermining the paper’s credibility and integrity.

The 2006 blowup, dubbed “The News-Press Mess,” prompted hundreds of readers to cancel their subscriptions. Bumper stickers reading “Boycott the News-Press” began appearing around town.

Amid a continuing stream of resignations, the paper’s remaining journalists voted overwhelmingly to unionize under the International Brotherhood of Teamsters. For the next 16 years, McCaw resisted the union and a string of judgments by the National Labor Relations Board; the board had awarded around $3 million in back pay to dozens of former employees and compensation to the Teamsters for its years of fruitless negotiations.

“Wendy McCaw made people in Santa Barbara sympathetic to the Teamsters,” said Welsh, the Independent columnist, last week. “Just imagine that. That’s an accomplishment.”

McCaw’s refusal to comply with the labor judgments against her became another source of community anger, triggering a second wave of subscription cancellations in 2007 and 2008. Posters bearing the slogan “McCaw, Obey the Law” began popping up in local shops and restaurants. McCaw’s lawyers issued cease-and-desist letters to some of the merchants — a bold tactic for a newspaper dependent on local ad dollars.

McCaw also began filing lawsuits against those she claimed had damaged the paper’s reputation. One target was Roberts, the former editor, whom she alleged had violated the terms of his employment contract by speaking out after his resignation. He countersued, at which point McCaw amended her original complaint to increase her demand for damages from $500,000 to $25 million.

As the dueling lawsuits went before an arbitrator, the News-Press published an unbylined story on its front page. It reported that an office computer used by Roberts contained more than 15,000 images of child and adult pornography, according to a Los Angeles Times story from 2007.

Roberts, now retired, recalled that the story made him “sick to my stomach.” The story not only baselessly linked him to the pornography, he said, but the News-Press also hadn’t even called him for comment. Within hours, Roberts organized a news conference, at which he denounced the story as “false,” “malicious” and “unconscionable.”

No evidence ever emerged tying Roberts to the images. Law-enforcement examiners said the computer in question had been used by multiple employees of the newspaper over several years and may have been acquired secondhand by the paper, making it impossible to determine a culprit.

In the end, Roberts — who recovered $915,000 in legal fees from Ampersand after a six-year fight — said the allegation “completely boomeranged” on McCaw. The weekly Independent published a story about the incident with a bold cover line: “Have You No Shame, Mrs. McCaw?” It later quoted the conclusion of the arbitrator in the McCaw-Roberts dispute, Deborah Rothman: “I infer from the evidence before me that Mrs. McCaw is capable of great vindictiveness and appears to relish the opportunity to wield her considerable wealth and power in furtherance of what she believes to be a righteous cause.”

McCaw also lashed out at other news organizations that covered the paper’s travails. She sued the Independent for copyright infringement after Welsh, its executive editor and columnist, published a leaked draft of a News-Press story about a confrontation between a News-Press manager and disgruntled journalists. She also sued a writer for the American Journalism Review who covered the News-Press saga; McCaw lost, but legal expenses contributed to the Review’s shuttering in 2015, according to Rem Rieder, a former editor of the Review.

In the years that followed, the News-Press gradually withered. Its news staff, which had numbered around 65 in the early 2000s, declined to 20 by 2016. Its politics, meanwhile, veered even more sharply to the right. In 2016, it became the first of the few daily newspapers in the nation to endorse Donald Trump for president. At the height of the pandemic in 2020, McCaw likened social-distancing rules at local supermarkets to Soviet and Nazi totalitarianism. When the paper endorsed Trump again in 2020, McCaw wrote that his reelection could “save the country from those forces that want to ‘transform’ it.”

By then, the News-Press was down to as few as four printed pages a day. In June, it dropped print altogether and declared that it was “entirely digital.”

Earlier this year, in another sign of its decline, McCaw moved the News-Press’s operations out of the historic Spanish-revival building it had occupied since the 1920s and into its suburban printing plant. McCaw still owns the downtown building and the printing facility, both worth millions, under separate companies. Neither building is listed among the News-Press’s assets in its bankruptcy documents.

The bankruptcy filing suggested, however, how far the News-Press had fallen. At its end, the newspaper that McCaw purchased for more than $100 million checked a box indicating that its assets were worth between $0 and $50,000.

Welsh, the Independent columnist, says the News-Press could have found “a sustainable niche” if McCaw hadn’t been “so self-destructive” over the years. He speculates that McCaw closed the paper rather than face the prospect of a court ordering her to pay debts owed to former employees and the Teamsters.

“I don’t really know what makes Wendy tick,” Welsh said, “but I do know she’s a preternaturally stubborn force of nature. The idea that she would have to pay a settlement to the union and to the people she fired or drove away is just not in her DNA. It puts her whole being into rebellion.”

Paul Farhi is The Washington Post’s media reporter. He started at The Post in 1988 and has been a financial reporter, a political reporter and a Style reporter.

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