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Tom Wolfe coined the phrase “trophy wife.” Now, Michael Lewis says the reason the rich want to own newspapers isn’t for the money, but for the status.

This logic explains what appears to be happening right now inside the two great national newspapers, the New York Times and the Wall Street Journal.

The cachet of the New York Times is worth more to the Sulzberger family than to anyone else. The Sulzbergers' relationship to the Times is the chief source of their status; without it they are mere mortals with a bit of cash; and so the Sulzbergers cling to their control of the Times as tightly as ever.

Instead of getting out while the getting is good, they flop around looking for new ways to raise money without ceding control, and to make money without leaving the news business. Which is to say, they are working as hard as they possibly can to throw good money after bad -- with the predictable result that they have alienated their outside investors.

When you have nothing else to offer except a gazillion Class A shares, you’ll naturally overvalue your role, which the Bancrofts see as protecting the Journal’s independence. They’re confusing vanity for high-mindedness.

Posted by edelfenbein at June 6, 2007 9:13 AM