On March 18, journalists and employees of Folha de S.Paulo, Brazil’s largest (and arguably most respected) newspaper, received a bombshell in their email inbox. A 100-word blunt memo from Luiz Frias, owner of the newspaper’s parent company, informing them of the board’s decision to name Sérgio Dávila as the publication’s new editor-in-chief. Even more surprising than the news was how dismissive it was of the outgoing boss, none other than Mr. Frias’ own sister, Maria Cristina. She is simply described as “a shareholder who occupied the position for six months,” without the compliments that are so customary in such situations.

The move is the result of a family feud that seems to be taken straight from HBO’s series Succession and threatens the newspaper’s very existence.

</span></p> <p><span style="font-weight: 400;">The dispute between siblings is around a new ownership plan proposed by Luiz Frias, reportedly disconnecting </span><i><span style="font-weight: 400;">Folha de S.Paulo</span></i><span style="font-weight: 400;"> from its parent company, Folha Participações, and leaving it to survive off its own depleted resources. Maria Cristina claims that she was given only one day to analyze the proposal, and it was her opposition to this maneuver that led to her firing as editorial director.</span></p> <p><span style="font-weight: 400;">Only one week prior to her firing, Maria Cristina Frias gave an </span><a href="https://www1.folha.uol.com.br/colunas/paula-cesarino-costa-ombudsman/2019/03/a-folha-precisa-continuar-inquieta-diz-diretora-de-redacao-do-jornal.shtml"><span style="font-weight: 400;">interview</span></a><span style="font-weight: 400;"> to </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;">&#8216;s ombudsman, talking about her bold plans to implement gender equality in the newsroom—which remains a male-dominated environment in Brazil. &#8220;Roughly 40 percent of our reporters are women—in line with American and English newspapers—but we want more balance. [&#8230;] The same goes for the presence of Afro-Brazilians, Asians, people from public schools,&#8221; she said.</span></p> <h2><i>Folha</i>, a family affair</h2> <p><span style="font-weight: 400;">The decision to fire Maria Cristina was made in a three-person board meeting, with only Ms. Frias, her brother Luiz, and Fernanda Diamant (Otávio Filho&#8217;s widow) present. Outvoted by Luiz and Ms. Diamant, Maria Cristina Frias was entirely relieved of her duties at the head of the newspaper; she also claims her company email address was deleted.</span></p> <p><span style="font-weight: 400;">Since the death of Octávio Frias, who helped transform </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;"> into Brazil&#8217;s leading media outlet in the 1970s and 1980s, the paper has been the stage of a tug-of-war between his three children: Otavio Filho, Maria Cristina, and Luiz.</span></p> <p><span style="font-weight: 400;">In the 1990s, Octávio Frias passed on the running of the conglomerate to his two sons, with Luiz taking care of the business side and Otavio Filho running the newspaper —a role which was taken on by Maria Cristina after Otavio Filho&#8217;s death last year. With Sérgio Dávila taking over as editor-in-chief, </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;"> is, for the first time, headed by someone outside of the Frias family.</span></p> <p><span style="font-weight: 400;">Scorned by her own brother, Maria Cristina Frias has decided to </span><a href="https://www.jota.info/justica/folha-briga-societaria-judiciario-29032019"><span style="font-weight: 400;">take the matter to court</span></a><span style="font-weight: 400;">, filing a request for Luiz Frias to open up the business&#8217; share records, as she claims her right to information has been denied and she is no longer certain of her own equity in the conglomerate.</span></p> <p><span style="font-weight: 400;">Maria Cristina also claims that her brother&#8217;s actions have gone against the wishes of their deceased father, who, before his death, established a shareholder&#8217;s agreement obliging all of his children to hold a prior meeting to deliberate family business.</span></p> <h2>Yesterday&#8217;s news</h2> <p><span style="font-weight: 400;">In the new millennium, the print newspaper has been relegated to one of the least important branches of the Folha Participações corporation, which also owns huge online services provider UOL—the parent company of electronic payment company PagSeguro.</span></p> <p><span style="font-weight: 400;">UOL reportedly has a cash reserve of over BRL 4 billion, thanks in large part to an <a href="https://www.bloomberg.com/news/articles/2018-01-24/brazil-s-pagseguro-raises-2-3b-in-largest-nyse-ipo-since-snap">initial public offering</a> of PagSeguro shares in January of last year, which raised around USD 2.27 billion on the New York Stock Exchange. The payments company currently has a market value of almost USD 10 billion.</span></p> <p><span style="font-weight: 400;">It is precisely UOL&#8217;s success that has caused the rift between the surviving Frias siblings. Maria Cristina has complained that Folha da Manhã—the company which produces the newspaper —has not received any dividends from UOL. Her younger brother has never hidden his lack of belief in the paper&#8217;s fortunes, hence the reluctance in giving it more money. And massive personnel cuts are reportedly on the way.</span></p> <hr /> <p><img class="alignnone size-large wp-image-15345" src="https://brazilian.report/wp-content/uploads/2019/04/export-wuYlB-1024x683.png" alt="folha newspaper readership" width="1024" height="683" srcset="https://brazilian.report/wp-content/uploads/2019/04/export-wuYlB-1024x683.png 1024w, https://brazilian.report/wp-content/uploads/2019/04/export-wuYlB-300x200.png 300w, https://brazilian.report/wp-content/uploads/2019/04/export-wuYlB-768x512.png 768w, https://brazilian.report/wp-content/uploads/2019/04/export-wuYlB-610x407.png 610w, https://brazilian.report/wp-content/uploads/2019/04/export-wuYlB.png 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <hr /> <h2>The President and the Paper</h2> <p><span style="font-weight: 400;">The reality is that Folha Participações&#8217; administrators have long been dismissive about the future of </span><i><span style="font-weight: 400;">Folha de S. Paulo</span></i><span style="font-weight: 400;">. Luiz Frias is a firm believer that printed newspapers are doomed, making him reticent to invest any of the corporation&#8217;s resources into keeping </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;"> afloat.</span></p> <p><span style="font-weight: 400;">Latest figures from the Circulation Verification Institute show that the country&#8217;s 11 top newspapers saw an average circulation decrease of 146,901 copies in 2017, and that this trend is nothing new. Between December 2014 and 2017, </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;"> registered a loss in circulation of 23.1 percent. </span></p> <p><span style="font-weight: 400;">Furthermore, </span><i><span style="font-weight: 400;">Brazil Journal</span></i> <a href="https://braziljournal.com/familia-frias-racha-ameacando-o-futuro-da-folha"><span style="font-weight: 400;">spoke</span></a><span style="font-weight: 400;"> to sources close to the family and gathered that Mr. Frias has been critical of </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;">&#8216;s recent editorial output, fearing that its criticism of the Jair Bolsonaro government could be detrimental to the group&#8217;s interests, particularly in relation to PagSeguro, which depends on regulation by the Central Bank. </span></p> <p><span style="font-weight: 400;">The threat to </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;">&#8216;s future comes as the paper is caught in the middle of the political whirlwind caused by the election of President Jair Bolsonaro. As part of his aggressive and divisive discourse, </span><i><span style="font-weight: 400;">Folha</span></i><span style="font-weight: 400;"> has always been depicted as an &#8220;enemy of the state&#8221; by Mr. Bolsonaro. In an interview last week, the head of state referred to the paper as &#8220;the root of all evil,&#8221; and has called it the &#8220;biggest [proponent of] fake news in Brazil.&#8221;</span></p> <p><span style="font-weight: 400;">Weeks before his election, Jair Bolsonaro addressed a packed crowd on São Paulo&#8217;s Avenida Paulista and declared that </span><i><span style="font-weight: 400;">Folha </span></i><span style="font-weight: 400;">would no longer receive any advertising funds from the government. &#8220;To the free press, my congratulations. To the bought press, my condolences,&#8221; he snarled.

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MoneyApr 02, 2019

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