Reader-owned media? Lessons from football

Amazon CEO Jeff Bezos’ takeover of the Washington Post in October set off alarm bells in the minds of media critics and readers of independent media alike, myself included. This was the fate of one of the world’s most reputed political newspapers thrown into corporate hands – the same hands that controlled the world’s largest internet company by revenue. All this in an age of what appears to be terminal decline as far as newspapers are concerned: circulation has fallen by 13% in North America and around twice that in Europe in the last five years. Bezos’ takeover is symptomatic of an increasing reliance of the mainstream media on handouts from either corporations or governments – those who can afford to subsidize their losses. As Le Monde diplomatique‘s Serge Halimi succinctly puts it: “Publications aligned with the dominant worldview or the decrees of advertisers rake in the money, everything else struggles.” Amazon’s recent $600 million deal with the CIA ought to set a few more alarm bells off.

All of this is perfectly familiar to football fans, who have seen wealthy benefactors with seemingly bottomless pockets propel once humble clubs such as Manchester City, Chelsea and Paris Saint-Germain to the top of their respective leagues through funnelling an endless stream of subsidies into their coffers. What is really worrying is that the benefactor model has become the norm: of the 20 clubs that competed in the 2011-12 English Premier League season, only Norwich City, Swansea City and Wolverhampton Wanderers finished the season without incurring debt. Clubs run on the principles of strict financial responsibility can no longer compete with the billions flowing into the accounts of their subsidized rivals, and this fact largely accounts for the contagiousness of the benefactor model.

The benefactor model has an Achilles heel, however. What happens when the benefactor decides he or she has poured enough money down the drain and pulls out? Or if the benefactor goes bankrupt? No fewer than 38 English clubs have entered administration (essentially bankruptcy) since the turn of the millennium, four of which went out of business altogether. An alternative business model for football on the rise today is that of fan ownership – a model that not only prevents this type of financial instability but also ensures that decisions are made according to those whom it ultimately serves: the fans.

My club, AFC Wimbledon, is one example. Founded in 2002 by former fans of Wimbledon FC when its owners decided to relocate the club to Milton Keynes, where it remains today under the “MK Dons” moniker, the club is fully owned by The Dons Trust, a supporters’ group that pledges to retain at least 75% ownership of the club to ensure nothing of the sort of the fate that befell its predecessor ever occurs again. Members join the trust for an annual fee of £25, an amount that supplements gate receipts and season tickets, which make up most of the club’s turnover. Last season, fans established the We Are Wimbledon Fund, a crowdfunding initiative to boost the playing budget that ultimately provided the finances for the estimated £25,000 transfer fee of Harry Pell from Hereford United (not a trivial sum for a fourth-division team). Fan ownership isn’t limited to clubs starting from scratch, either. Former Premier League club Portsmouth FC, now playing in the fourth tier, became the largest fan-owned club in England when its fans bought it out of administration in April.

What lessons can the likes of the Washington Post pick up from the likes of Wimbledon and Portsmouth? If fan ownership of a football club is not only conceivable but also doable in a league system dominated by subsidized clubs, who’s to say the same couldn’t be done in the media? After all, both football and the news are, in today’s world, inherently unprofitable sectors that rely, if not on corporate or taxpayer dollars (or pounds), on trust membership fees and crowdfunding for revenue to keep them afloat. I propose that the next time the owners of a major newspaper or news magazine offer it up for sale, its readers should pool together a sum of money to make a bid for it. Then, once in ownership of it, they can decide on coverage on a democratic basis and keep it running financially on an annual subscription fee. After all, plenty of media sources are charging subscription fees without giving readers a share or even a voice. $20 or $30 a year to have a say in what stories your newspaper covers and to ensure that it stays well away from corporate and government interference. Not a bad deal, is it?

Finally… it’s already been done before.

Artificial fragility

Back in June, the power jack on my four-year-old Sony Vaio laptop fell apart, leaving the outdated but nonetheless functional machine a mere 30 minutes (the lifespan of its degraded battery) from a perpetual shutdown. Sony computers once shipped with a three-year warranty, meaning the manufacturer would cover the cost of all repairs within three years of purchase, but now offer just one year. I decided that I would turn my computer over to Sony anyway and let them bring me the news. They charged me HK$500 ($65) to have it inspected, taking a week to do so, before demanding a further HK$2850 (US$368) to have the necessary repairs carried out.

That’s right. $368 to have a simple power jack replaced. I searched up a few listings for Sony Vaio power jacks on eBay:

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A $368 repair bill for a component that costs no more than a dollar. Plus a bit of labour. Okay, maybe a good deal of labour. But paying half the cost of the computer when it was new just to replace a 99-cent power jack? Something didn’t add up. So I brought the brought the laptop to a small repair shop in Sham Shui Po, Hong Kong. The process took three days and cost me a mere HK$350 (US$45) – less than what Sony charged me to have its repair crew take its time mulling over it without actually carrying out any repairs.

It’s clear that the amount Sony was about to charge me was less a reflection of the true cost of repairing the computer than a penalty for sending it in for repairs on an expired warranty – essentially a slap on the wrist followed by a stern “The warranty expired last year, you idiot.” This was a clear case of planned obsolescence: tech companies like Sony not only sabotage its own products to increase their proneness to failure (I’d turned the same computer in for repairs on at least four previous occasions) but also charge extortionate prices for repairs beyond an unacceptably short and even declining warranty period. The aim? To create the artificial need, or “demand”, as economists like to call it, for us to replace our products that have failed, and, in the process, boost their profits through our consumption.

Planned obsolescence is an inevitable consequence of the profit motive. Tech companies aiming to maximize profits seek to maximize revenues by creating artificial demand through compromising the durability of their products and imposing “repair penalties”, as well as to minimize costs by evading their responsibility to provide support for them. And it’s important to note that the costs that firms try to “minimize” don’t simply go away – it’s merely the cost to the firm that’s “minimized”, which leaves the rest of us to bear them. Those of us who don’t have access to independent repair shops, as I had the privilege of resorting to, have no real option but to throw our misfiring devices out and buy new ones. That costs our wallets, the planet and the health of other people: our precious dollars are spent on new devices that will likely later suffer the same fate, and the toxic heavy metals in our electronic waste ends up either in landfills where they are assimilated into the earth or in developing countries such as Bangladesh, India and China, where everyday citizens are forced to live among them.

Economists write off the costs evaded by businesses as mere “externalities”. Dismissing them as such amounts to denying a simple truth: that the profit motive is the driving force behind the capitalist system, and, as profit maximization leads ultimately to the evasion of costs by companies, capitalism is the underlying cause of planned obsolescence and its devastating social and environmental consequences. As long as companies are allowed and encouraged to maximize profits with zero concern for the repercussions of doing so, they will enjoy an “incentive”, as economists refer to it, to sabotage their own products as a means of coercing us into consuming beyond our needs. After all, more new computers and smartphones for us means more dollars for them.

Government regulations that force firms to pay the full costs of their activities, or as much of it as possible, are welcome. We could certainly do with far more extensive extended product responsibility schemes to force tech companies to meet predetermined durability criteria and to offer substantial warranty periods. Massive citizen mobilization will be needed to counter the power of lobbyists and corporate dollars and make these demands clear to governments across the industrialized world. But the heavy hand of the state isn’t enough on its own, nor can it be relied upon in capitalist societies where governments are often complicit in the abuses of their corporations. The nature of business itself needs to change, moving away from the capitalist ethos of maximizing profits to an ethos under which profits are generated such that the business can be sustained, but without externalizing social and environmental costs.

On this note, I’d like to reserve a bit of praise for the technicians at the repair shop that spared my laptop from the greed of its mercenary manufacturer. They certainly had both the skills and the negotiating power (particularly given the exorbitant prices Sony were prepared to charge) to charge me far more than they did, but chose not to, and filled a void in providing an oft-needed service at a reasonable and affordable price. Any movement against a capitalist ethos in business will need instruments with which to resist the abuses of cost-evading corporations, and this leaves an important role for independent repair shops and repair cafes, not only of electronic devices but of all of the various “consumer goods” that we consume far too much of. Repair skills are few and far between in the post-industrial society we live in, and those who possess them could do the world a great service both by offering these skills reasonably and affordably and by passing them on to others. It’s only by offering and carrying out repair as an alternative to the cycle of consumption and disposal that we can not only overcome planned obsolescence but also move away from the profit-maximizing capitalist ethos that has dominated modern society for far too long.