David Hoffmann now runs the company that owns the Arizona Daily Star.
Who the heck is David Hoffmann?
He’s a billionaire with a devilish smile, a crisp suit and a knack for turning a whole lot of money into even more money.
Sorry, ladies. He’s taken.
Hoffmann and his wife, Jerri, were high school sweethearts in rural Missouri (where David says he grew up without hot running water) and they now spend their days in what looks like a really cool office building in Naples, Florida.
That little tidbit is part of a carefully curated public persona that casts Hoffmann as a modern-day Horatio Alger hero who deserves a pat on the back for declaring last month: “I am going to save newspapers in America.”
But be advised, Tucsonans, cracks start to appear in that polished veneer when the press doesn’t give that same loving treatment to his vast business ventures.
Hoffmann’s billions
The Forbes list of billionaires puts Hoffmann’s wealth at $2.6 billion. That’s double what he was worth just four short years ago.
We don’t know how he managed to do that, but he’s clearly reached the stage of the Monopoly game where he has enough money to just buy whatever properties he likes. It’s a long list that includes the Pittsburgh Penguins hockey team, the Oberweis Dairy ice cream company in Illinois and the Mackinac Island Ferry Company in northern Michigan.
But it’s the newspaper purchases that are really making headlines, so to speak, and probably are of most interest to Star readers.
He started out small a few years ago, buying the Mackinac Island Town Crier and the Napa Valley Register, among others.
But as a Missouri native, he’s had his eyes on the St. Louis Post-Dispatch for a while.
That paper is owned by Lee Enterprises, the same conglomerate that owns the Star and news outlets in dozens of cities across the country.
The Post-Dispatch is also a thorn in Hoffman’s side and might be why he decided to take control of Lee.
Two years ago, he bought a 5% stake in Lee and approached Lee’s management team about buying more of the company. At the time, the bigwigs at Lee were trying to fend off hostile takeovers from venture capital firms like Alden Global Capital.
But they reached an agreement with Hoffmann and last December he bought a controlling stake in Lee for $50 million, including $35 million of his own money and $15 million from other investors.
Keep in mind, he didn’t “buy” the company. That would cost 10 times what Hoffmann put up. Lee has $455 million in debt left over from purchasing 31 newspapers from Berkshire Hathaway (fellow billionaire Warren Buffett’s company) in 2020.
What Hoffmann’s money did was convince executives at Berkshire Hathaway that the infusion of cash would stabilize Lee’s finances.
In the end, Hoffmann was named chairman of Lee’s board in February because he managed to lower the interest rate on its massive debt from 9% to 5%.
That’s it. That’s how the fate of your cherished daily newspaper is set. Bad debt and back-room deals between billionaires.
What to expect
A former high school quarterback, Hoffmann often says he wants to bring back coverage of high school sports.
He’s also not a fan of newsroom layoffs. From what we’ve seen in the wake of his purchases of other newspapers, he’s kept his word. No big layoff announcements.
And he’s a big fan of “hyperlocal” news, which could be a good sign for the Star and its readers.
So far, so good, right?
But there appears to be a big caveat to his promise to save newspapers: He wants newspapers to be explicitly pro-business.
That may sound like a no-brainer to a business person. After all, businesses are part of the community and most people make their living by working for one.
But it’s not that simple, as you can see from an episode in Missouri that unfolded over the last few years.
Whine country
Back in 2021, Hoffmann decided he wanted to turn Missouri wine country into the next Napa Valley.
He swooped in with a $100 million plan to do just that. He bought up pretty much the whole town of Augusta, Missouri, and promised to revolutionize the area.
But the Post-Dispatch had the gall to quote people who were skeptical of Hoffmann’s ambitious plan. Reporters also highlighted the inevitable problems that come with grand ideas, such as a faulty geological study that derailed plans for a swanky golf course.
When it became clear that Hoffmann’s overall vision for the wine country wasn’t going to bear the fruit he hoped, he blamed the news coverage and singled out the Post-Dispatch, saying their reporting “took away our enthusiasm for the project.”
“What surprised us is when we’d walk in downtown Augusta, people would come up to us and thank us and hug us [saying] ‘Oh my God it’s so great what you’re doing,’” he said at a February event in St. Louis. “And then we’d read we’re the antichrist in the newspaper. I said, wait a minute. Where’s the disconnect here?”
As a quick aside, we like to think of that disconnect as a byproduct of “baffled billionaire syndrome.”
You can see it with President Donald Trump not understanding that most people don’t like him, Elon Musk’s disappointment that people on Twitter don’t think he’s funny, or Jeff Bezos getting flummoxed that the Washington Post opinion pages don’t match his ideology.
That syndrome often leads to billionaires doing what Hoffmann wants to do with newspapers: Trump yells about “fake news,” Musk buys Twitter, and Bezos forces out opinion writers who don’t agree with him.
“I do plan to fix that with media locally,” Hoffman said of the Post-Dispatch coverage of his wine country project. “These businesses, you can’t attack them. I’m not a Republican, I’m not a Democrat, I’m down the middle, and the reason I’m down the middle is because they both buy our ice cream, they both buy our wine.”
The whole wine country ordeal left a bad taste in local reporters’ mouths, even at the St. Louis Business Journal, a competitor of the Post-Dispatch that just as easily could have been chuckling about their rival getting dragged.
Instead, Business Journal reporters said they were surprised at Hoffmann’s “grievance-based” strategy of buying newspapers.
Now put that into the Tucson context.
What would Hoffmann think about the Star’s coverage of data centers, for example? What would the paper’s coverage of Project Blue have looked like if Hoffmann had been in charge last year?
From his perspective, he might see the wave of data centers as businesses trying to invest huge amounts of money in the local community. But a lot of Tucsonans don’t see it that way. They’re worried about the water, the air quality, the noise in their neighborhoods, and a litany of other problems data centers cause.
Now consider all the other ways an explicitly pro-business newspaper would cover Tucson.
If a chill just ran down your spine, well, that’s what you get with a billionaire boss.
Luckily, the Star isn’t the only game in town, so no single billionaire can control every aspect of your news diet.
Tucson is now home to independent outlets like the Tucson Agenda, the Tucson Sentinel and the Arizona Luminaria.
This is one of those times where it’s important to show your support for the type of news outlet you want to see thrive.
You can do that by becoming a member of the Luminaria or joining the Sentinel’s Watchdog Club. And, of course, by subscribing to and sharing the best darn newsletter in the world.