The tyranny of Charles Foster Kane, the fictional press tycoon created by Orson Welles, is lore among newspaper journalists. Kane is the epitome of a rich and powerful vanity publisher, the antithesis of the free press and the newsroom’s worst nightmare.

So why is this fictionalised media bogeyman’s name being uttered in hushed tones in some of the most highly regarded American newsrooms from Boston to Los Angeles? There are signs that a new era of newspaper ownership is dawning in America, one led by wealthy, privately funded businessmen who, like Kane, have their own vision of how the industry should operate.

A consortium led by Jack Welch, the former General Electric chief executive, has made an offer to buy The Boston Globe from its parent, the New York Times Company. Mr Welch is joined by Jack Connors, a Boston advertising executive, and Joseph O’Donnell, a local entrepreneur who made his fortune selling hotdogs at sporting venues. The group’s initial overture was turned down on Wednesday, but the consortium views the rebuff merely as the end of the first round. JPMorgan Chase believes that the paper is worth about $550 million (£290 million) after undertaking a preliminary valuation on behalf of the Welch group.

Unfortunately, the New York Times Company paid $1.1 billion for The Boston Globe in 1993 and doubtless wants to recoup more than half its money.

The Hollywood producer David Geffen is preparing a bid for the Los Angeles Times. Last month he sold two paintings by Jasper Johns and one by Willem De Kooning for more than $143 million, fuelling speculation that he has other assets in mind. The Los Angeles Times is part of the Tribune Group, which owns the Chicago Tribune, a clutch of local newspapers, some big television stations and the Chicago Cubs baseball franchise.

Mr Geffen is not alone in his interest in the biggest newspaper in Los Angeles. Eli Broad, one of the richest men in the US, and Ron Burkle, a supermarket billionaire, are both on his team. Meanwhile, Frank Zarb, the former chief executive of the Nasdaq stock market and present chairman of Hellman and Friedman, a private equity firm, is said to have suggested putting together a group of New Yorkers to take over Newsday, the Long Island daily paper, which is owned by Tribune.

Local entrepreneurs in Hartford, Connecticut, and Baltimore, Maryland, have expressed interest in The Hartford Courant and The Sun, both of which are Tribune titles and well-regarded in their respective markets.

The unprecedented flurry of activity springs from a fundamental problem: the traditional American newspaper seems incapable of making a profit, and so the industry is looking for a new ownership model.

Moguls such as William Randolph Hearst — a model for Citizen Kane — Edward Scripps and Joseph Pulitzer built the American newspaper market. The second wave of ownership was dominated by family trusts, such as those of the Sulzbergers, who still control The New York Times, or the Bancrofts, who control The Wall Street Journal through Dow Jones. More recently, those family trusts turned to the public markets for capital, but that model is failing. Advertising and readers are heading to the internet, circulation is plummeting and investors are growing weary of little or no growth.

In the third wave of ownership, giant newspaper companies, such as Gannett and McClatchy, have bought local papers by the dozen to squeeze profits out of consolidation. Yet even these giants are faltering because there are only so many costs to be cut. Knight Ridder was forced to sell up this year, and Tribune Group’s battle with the Los Angeles Times has forced the company to consider bids.

Yet, Mr Welch, Mr Geffen and the rest believe that they can succeed. There is a notion that, in the hands of local businessmen, the newspapers will return to what is being called “grassroots values”. All of a sudden, the theory goes, readers will care again and the newspapers will miraculously attract more sales and advertising. The only thing missing from such a simplistic business plan is a magic wand.

If Mr Welch, Mr Geffen and the others become the new generation of American newspaper owners, they might wish to consider the fate of Charles Foster Kane, who realised on his deathbed that the whole endeavour had been a waste of time and money.

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