In the coverage of Rupert Murdoch’s bid to acquire Dow Jones and other recent media-ownership struggles, much has been made of family ownership of news businesses and so-called family values. People on either side of the debate are equally guilty of hypocrisy and intellectual dishonesty. At one extreme are the hedge fund managers and shareholder activists who argue that families controlling media companies are guilty of harming the interests of public shareholders. At the other extreme are those who view family ownership as an important societal value that should be protected. The truth, as usual, lies somewhere in between and hinges on the changing nature of both the families involved and the businesses they control. In the context of this debate, it is worth taking a closer look at what counts as a family, which values are worth protecting, and who should bear the burden of protecting them.

When the Tribune Co. announced its acquisition of Times Mirror from the Chandler family in 2000, the late Washington Post publisher Katherine Graham spoke for many when she argued passionately that “family ownership makes a difference.”

“I don’t think it is an accident,” Graham noted, “that the papers best known for quality in the country…are, or were until recently, family controlled.” But the problem with this observation is that most newspapers are family controlled, so it’s no surprise that many of the best—as well as many of the worst—fall into that category. The Los Angeles Times, the flagship newspaper of the Chandler family empire, is a perfect example of the irrelevance of the family-ownership argument: It has been among the best and worst papers, depending on which generation of Chandlers was in charge.

When it comes to the News Corp. bid for Dow Jones, one must remember that the Murdochs are no less a family than the Bancrofts. Rupert Murdoch cuts a profile akin to William Randolph Hearst and the other legendary patriarchs who founded the newspaper dynasties of the late 19th and early 20th centuries, unlike the current generation of three dozen adult Bancrofts, almost none of whom have any active involvement with the day-to-day operations of Dow Jones. This is not to suggest that Murdoch’s record and intentions are not worthy of close examination, but cant about family values in criticizing his purchase of Dow Jones is misplaced.

The question of family values came to the fore in 2000, when newspaper businesses started changing hands with disturbing rapidity. In that year alone, three major family owners sold their holdings in multibillion-dollar transactions: the Chandlers, who sold the Times Mirror Co.; the Thomsons, who parted with 100 U.S. community papers; and the Pulliam, who sold The Indianapolis Star. Until then, family-owned newspapers could be expected to stay, well, family-owned. Only the occasional major sale took place, such as with the Binghams of Louisville, Kentucky, in the 1980s and the Cowles of Minneapolis in the 1990s.

It was no coincidence that families started selling out in 2000. That year, after a decade of outperforming their sexier media peers, newspaper companies hit their high watermark of profitability. So why the families’ sudden urge to sell? Despite all the happy talk at the time about how well positioned newspapers were to take advantage of new online opportunities, it had become clear that the internet was a lethal weapon aimed directly at the economic heart of newspapers. For a business highly dependent on classified advertising, newspapers have been no match for the Web’s efficiencies. Savvy family owners saw the writing on the wall and began to consider the benefits of financial diversification.

But even after all of 2000’s activity, family ownership levels have not changed all that much, and neither has overall consolidation. Many buyers as well as sellers were families, and a number of new, locally focused players have come into the market. The 20 largest-circulation U.S. newspapers have 15 different proprietors, and other than two papers owned by leveraged-buyout investors (in Philadelphia and Minneapolis) and six owned by various broadly held public companies (a number that will shrink to four when Sam Zell takes over Tribune Co.), they are all family controlled.

To be fair, some of the confusion over just what constitutes family ownership (is it the Murdochs or the Bancrofts?) may stem from the way most newspapers are structured, with dual-class shares. All but a few of the 14 public newspaper companies operate under dual-class arrangements, and once the Tribune sale is finalized, Gannett will be the sole remaining public newspaper company that has a market value of more than $1 billion and a single class of shares. Dual-class shares allow for public ownership while preserving corporate control for the family and management, who have “super” shares. This structure allows families to raise money to invest in developing the product and allows uncommitted family members to exit without causing an ownership or capital crisis. And since the nature and limitations of the non-super shares are clearly disclosed at the time of their sale, the public is fully aware of what it is buying and is better off for having the option to invest in businesses that would otherwise not be on the market.

Unfortunately, for every newspaper-owning family that serves as an effective corporate steward and manager, there’s one whose involvement with the business has become marginal and whose sense of the values that the dual-class structure was meant to protect is anything but cohesive. Over succeeding generations, time has a way of turning the former into the latter. As progeny multiply, so do perspectives and objectives, and without an effective means of achieving consensus, a dangerous institutional inertia can set in. In the newspaper industry, which for the first time faces truly seismic economic challenges, inertia is a particularly deadly corporate ailment, often prompting desperate public shareholders to dump their shares at a discount to super shareholders. If the controlling group has lost its joint sense of purpose in owning the asset, its members are often happy to accept extra value in what for them has become primarily a financial investment.

Many cite a family’s remaining involved in a paper’s day-to-day operations as the most important factor in preserving effective family stewardship. But active engagement can prove a mixed blessing. Fewer than half of family-controlled public-newspaper companies have family members at the helm, and as a group, these have not outperformed the others. Unfortunately, the twin problems of incompetent family members in senior executive posts and family members who believe that they or their children are entitled to line positions regardless of performance raise often-insoluble governance and management challenges. Once a family decides to turn to outside professionals to run the company, however, it is hard to put the genie back in the bottle. The selection of a C.E.O. then becomes the defining act for each generation of owners. As the Chandlers learned when they selected Mark Willes, a bad choice can leave the family with little alternative but to sell the company. Conversely, the McClatchys’ decision to hire Gary Pruitt as their company’s C.E.O. more than a decade ago has served to reinforce the family’s commitment to the industry.

I witnessed this firsthand on two separate occasions a couple years ago. I was invited to speak at the annual Conference of Knight Wallace Journalism Fellows at the University of Michigan on a panel that included senior executives from every major English-language news organization. It seemed that the organizers could not find anyone else in journalism willing to oppose the position that investing more in newsroom resources inexorably leads to better bottom-line performance.

Shortly after the Michigan conference, I was a guest at a senior-management retreat of a major family-owned news group. Despite the event’s obvious business and operational focus, the presentation I viewed was stunning for what it lacked. In the company’s strategic plan for transforming its products to respond to the changing media environment, many attractive and interesting new products and initiatives were described, but the word advertiser was never uttered. Newspapers, by the way, rely on advertising for about 80 percent of their revenue. But as with the Michigan conference, an unspoken Field of Dreams ethos pervaded the proceedings: If we develop it, they will come.

If the objective is to avoid dramatic change and protect the prerogatives of how news has been produced since time immemorial, then by far the most attractive governance regime available is the institutional inertia associated with the most dysfunctional of families. It is, however, neither economically sustainable nor a recipe for fostering any kind of excellence, journalistic or otherwise.

But fashioning a dual-class share structure was not Katherine Graham’s most significant act in ensuring the Washington Post’s continued strength and independence. Instead, it was her decision to accept the money and counsel of Warren Buffett. The Post Co. has consistently operated all of its divisions as profitably as any of its peers, avoiding outsize, ego-driven acquisitions and intelligently reinvesting in its core operations. The result has been dramatically superior stock performance compared with any of its major-market newspaper-publishing counterparts, even during the difficult recent years. History has shown that dual-class shares may not be penetrable from the outside by the likes of Morgan Stanley or Rupert Murdoch, but they can easily be undermined from within. Only a track record of superior performance can prevent that fate.