By Fred Dickey Oct. 13, 2014
San Diegan Malin Burnham stands in his downtown office with a view of the city. — photo by Eduardo Contreras
One of the biggest dream-achievers in San Diego County has a big, new dream that, if it can be pulled together, would turn the region’s leading media company into nonprofit ownership. It’s an intriguing idea that has a ways to go toward becoming more than a long shot.
The story crept into news coverage quietly on bedroom slippers. It said Malin Burnham of Point Loma, a philanthropist, had put together a team of retired businessmen to explore making an offer to buy U-T San Diego from “Papa” Doug Manchester.
Buying a newspaper company today is the type of deal on which bankers practice saying “No.” Mainly because of the Internet, most newspapers are limping along trailing money like a ’95 Chevy leaking oil.
However, financial experts who evaluate such things say the U-T is among the top tier of metro papers still doing rather well, swimming strongly upstream against a stiff current. That makes it a more attractive property, but still, this is not like getting in on the ground floor of the Facebook IPO.
Burnham, an internationally known yachtsman, is not afraid of a bucking tiller. The unique aspect of his plan is that the U-T would be a corporate hybrid — owned by a nonprofit corporation but operated as a for-profit company. The idea would be to funnel residual profits into community charities.
That ownership model has been tried only twice by big-city papers, and reports of how those are working are inconclusive.
Burnham would be counting on Manchester agreeing with his vision, and the publisher could conceivably be sympathetic. Though it’s not recognized widely, he is one of the most prolific philanthropists in California. He has been known to write a six-figure check almost on impulse, simply because a charity moved him.
Manchester, however, is also a tough, hugely successful businessman who runs his businesses the way Ted Williams used to swing a bat — he doesn’t go up to the plate to bunt.
There are obvious questions about how nonprofit ownership would work. Would the U-T’s editorial positions and news coverage be decided by committee? Would the business management have the hard edge and aggressiveness that any company must have to survive in a struggling market?
No matter the sales price, the deal would require lots and lots of money to consummate. Would investors, philanthropic though they might be, pony up that kind of cash without the promise of a return that a regular for-profit corporation might offer?
The only answer Burnham can provide at this juncture is to point to the people he has recruited for his team. Heavy-hitters, indeed. They are Bill Geppert of East County, retired head of Cox Communications San Diego; Bill Roper of La Jolla, retired CFO of SAIC; Pat Shea, a San Diego attorney; and Mark Stephens of Rancho Santa Fe, a retired partner of Ernst & Young. All five are equal in the venture, Burnham says, adding that he’s the spokesman only because it was his idea.
According to Burnham, they expect approval from the Internal Revenue Service for their corporate structure within 90 days. Meantime, an agreement with Manchester would have to be worked out.
"Zero deal at this point"
After the U-T was buffeted by market forces following the Copley family sale several years ago, Manchester did not hesitate to pump money into it. The result has been operational and financial stability, newspaper analysts say.
With more than a few big-city papers nationwide begging with cardboard signs at freeway exits, the U-T opens its doors every day, pays its bills and drops a local newspaper on your driveway, all to the benefit of San Diego, thank you very much.
We also need to be aware there are conglomerates going Pac-Man through the industry, gobbling up papers and homogenizing them into journalistic blah. Think not? Look at once-vital Bay Area newspapers and try not to weep.
These conglomerates pay more to purchase papers because they drain more out of them.
Of the putative deal with the Burnham group, Manchester has said: “We have zero deal at this time. I have always admired and respected all that Malin has done for our community, and continues to do. If Malin gets the necessary approvals, then we will talk, but we are a long way from any type of transaction, if any will ever materialize. But I greatly respect and appreciate Malin’s interest in ‘community before self’ as his core philosophy.”
Burnham is hoping that Manchester’s record of philanthropy will make the publisher amenable to the nonprofit concept.
He says of Manchester, “I’ve never done business with him. Our only dealings have been in charitable activities, and his generosity in that is much, much greater than most people know. He’s an important member of our Sanford-Burnham (Medical Research Institute) board.
“... If this deal goes through, it’ll be because Mr. Manchester has maintained the paper as a viable business entity. And if we are successful in turning it into a nonprofit, he will deserve much credit for allowing it to happen. It would be a significant legacy for him.”
Passion in sailing
Malin Burnham is one of the more intriguing men of San Diego, or anywhere else. Now 86, he has lived all of those years in the Point Loma area. After graduating from Stanford University in 1949, he joined the family business and made a fortune in commercial real estate. However, he shocked associates by abandoning his career at age 59, selling his companies to his partners and then devoting himself to philanthropy.
“I’m not the richest person around, not by a long shot. That’s not me. That’s not been my goal. I’ve got enough money to do what we want to do. I don’t have any debts, and we don’t live extravagantly. I have four children I’m proud of and a marriage of 42 years to my wife, Roberta.
“My passion has always been sailing. I’ve done it all my life. My activities in the America’s Cup series are pretty well-known. I worked hard to bring some of those competitions to San Diego.”
His list of charitable undertakings would spill over onto a second page, and then a third. They range eclectically from the Olympic Training Center in Chula Vista, to co-founder of the First National Bank of San Diego, to the USS Midway Museum and to his many medical research projects.
An idea factory
Sitting in his 10th-floor office on A Street, Burnham is a courtly man of smiles. I can’t imagine him not stopping to pet a puppy. I know he’s 86, and I, being human, am alert to … you know what.
His half-smile says he’s reading my mind. “I inherited great genes,” he says.
He’s genial, yes, but when I press him on the viability of the nonprofit ownership model, he stiffens, and the smile briefly disappears. He gives a body-language answer of — That’s the way it’s going to be!
He does say that under his group’s concept, the nonprofit board would remain aloof from the day-to-day operation of the paper and let the pros run things. But the board would contribute its vision of public service for the staff.
Burnham’s dedication to nonprofits is almost spiritual. He reaches into his shirt pocket and pulls out a business card that carries the words: “Community before self.” He gives me two, sort of like a street-corner evangelist passing out tracts.
“A lot of people in town attach those words to me because I live and breathe them. I believe the community is more important than Malin Burnham or anyone else. This philosophy is one I believe this paper can promote.”
(In an earlier conversation, Burnham sold Manchester on the slogan “Community before self,” and the publisher asked that it be run every day on the cover of the U-T’s Local section.)
Burnham had no Road to Damascus conversion to charitable work, only a gradual awareness of need that floated through his experience until it settled into a life mission.
By far his most significant accomplishment has been in medical research, both as visionary and ramrod. Looming large in his achievements is the Sanford-Burnham institute.
“In 1982, I was approached by the La Jolla Cancer Research Foundation to be on their board. Before I said yes, I went out and took a look, talked to people and observed them interacting. They thought of themselves as family, as partners. I saw how effective collaboration could be.
“That reinforced to me that two important things we always need are leadership and collaboration.”
After California passed a $3 billion bond issue for stem cell research a few years ago, Burnham was instrumental in pulling together five research institutions in La Jolla to form the Sanford Consortium for Regenerative Medicine, of which he is board chairman.
Former San Diego Mayor and Gov. Pete Wilson, who knows civic leadership like a soprano knows a high note, says of Burnham: “Malin’s fingerprints are on more beneficial and important changes for San Diego than you would think possible for one man. ... He is the classic example of the person who derives great pleasure by making life better for others and for his city.”
To Burnham, even a business deal always comes back to philanthropy.
“I see a newspaper as an idea factory. Let’s get all the ideas on the production line. For example, the Malin Burnham Center for Civic Engagement, a part of the San Diego Foundation, is designed to do just that. The whole concept is to involve people from all walks of life. If they think they have a good idea for the community, bring those ideas into the center, and they’ll be welcomed. If the idea has merit, we’ll provide resources to explore them.”
"Community before self"
Burnham calls himself a moderate Republican who is “less and less partisan.” He says he’s been accused of being tied to “downtown interests.” He is amused when he says it, adding that the only connection he has to downtown is the office he answers his phone in. He says he has no ownership of any business and owns no real estate in San Diego County other than his home.
“Sure, I have opinions on issues, and I’ll speak out on them, openly and frankly. If I didn’t care about issues, why would I want to buy a newspaper?
“When all’s said and done, what mainly matters are integrity, kindness, honesty and service.
“ ‘Community before self’ — I carry those cards as a reminder.”
Fred Dickey’s home page is freddickey.net. He believes every life is an adventure and welcomes ideas at [email protected]