“Instead of complaining about what’s been lost … it’s much healthier for those of us who care about local journalism to build–to go do what we think needs to get done and see if that works.” –Ken Doctor, founder of Lookout Santa Cruz, a full-scale online newspaper launched last fall
If Hollywood wanted to make a gritty movie about the work of dig-it-out newspaper reporters who uncover big local stories of government doings and corporate misdeeds, it couldn’t have chosen a more picture-perfect location than the boisterous newsroom of New York’s Daily News. Once the largest-circulation paper in America, the Daily News embodied the rich history of brawny tabloid journalism, even serving as the model for DC Comics’ The Daily Planet, workplace of Clark Kent and Lois Lane in Superman.
But there’d be a problem with filming at the Daily News now: Its owners have eliminated the newsroom, leaving reporters, editors, photographers, et al. with no shared workplace. Yes, today, it’s a newspaper without a newsroom.
This once proud publication is now owned and run by Alden Global Capital, a multibillion-dollar hedge fund with a long record of buying papers on the cheap, selling off their assets, and slashing pay and jobs. Media watchers have labeled these vulture capitalists the “ruthless corporate strip-miners” of local journalism. And sure enough, in the past couple of years Alden’s profiteers have steadily plundered the paper, eliminating half of its newsroom staff. Then, last August, they told the remaining journalists they would no longer have a physical place to work.
To be clear, this closure was not a temporary measure to protect staff from Covid-19. Nor was the newsroom abandoned in favor of relocation to a less expensive office (an increasingly common cost-saving decision). Indeed, real newspaper publishers realize that the collective hive vitality of a newsroom, with its camaraderie and reportorial cross-fertilization enrich the journalism.
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But Alden is in the business of making money, not journalism. The Wall Street bosses emailed staff that they weren’t selling the offices–just leasing them to other businesses, creating a new revenue stream for fattening the profits of the fund’s investors.
Unfortunately, such crass corporate calculations are typical of the new model of a nationalized, conglomeratized, and financialized “local” journalism that has already taken over thousands of papers in big cities, suburbs, and rural areas across America.
The scale and speed of that transformation have been breathtaking:
Alden’s high-flying hedge funders have amalgamated the second biggest newspaper conglomerate in the country, having swallowed up more than 200 papers, including metro dailies in Baltimore, Boston, Boulder, Chicago, Denver, Hartford, Norfolk, Orange County, Orlando, San Jose, and St. Paul.
Last August, in one blow, the 30 papers owned by the venerable McClatchy family fell to yet another multibillion-dollar hedge fund, Chatham Asset Management (led by a former Wall Street junk-bond dealer). With this buyout, Chatham’s clique of global speculators grabbed the major dailies in Charlotte, Fort Worth, Kansas City, Lexington, Miami, Sacramento, and Seattle.
Then there’s the colossal Gannett conglomerate, now owned by Japan’s SoftBank Group. It runs USA Today, as well as more than1,000 local papers across the US, including the main dailies in Austin; Burlington (VT), Cincinnati, Detroit, Des Moines, Indianapolis, Louisville, Milwaukee, Nashville, Oklahoma City, Phoenix, Providence, Reno, and Springfield (MO).
The operational mandate of newspaper hedge funds is absolute: Sacrifice local newsgathering and community interest to squeeze out every bit ot profit and siphon it off to unknown investors in WhoKnowsWhereLand. The papers Alden acquired were reportedly profitable, with annual margins of around 10%. But the hedge fund sharpies demanded that all their papers deliver 20% or more–a level at which the squeeze becomes deadly to quality journalism.
Community life cannot thrive without community news, which in turn depends on reporters and editors who are of the community and have the know-how, time, and resources to investigate, educate, expose, inform, entertain, and generally enlighten the citizenry. But what does some obscure, aloof, money manipulator know or care about your community or its democratic vitality? Zilch, that’s what.
A shot in the dark
I live in a city with one of these dailies (Gannett owns the Austin American-Statesman) and in my travels I’ve read dozens of similar outlets and talked to their readers. Money managers have reduced most to mere remnants of real journalism. They have slashed reporting staff and consolidated even the editing, layout, printing, and other basic production work in remote, centralized hubs. Thus, most of the flavor and timeliness of the “local” paper is lost, replaced by chopped-up national material, two-day-old sports stories, product promotions, and other filler.
One especially revealing measure of hedge-fund journalism’s commitment to its dual responsibility of informing the public and inspiring civic action is failure to report on themselves. Their takeovers are done in the dark. BANG! Suddenly your local news is controlled by distant profit seekers who’ve never been to your town. What deal was struck? By whom? At what price? To whom do they answer? What say will you have in their coverage? These are basic questions that any investigative reporter worth their salt would ask of any transaction of such consequence to the community. But local reporters, mayors, community groups, et al. are not even given the names of–much less access to–the financial chieftains who secretly directed the buyout, control operations, and pocket the profits. And it would be worth their jobs if they tried. The most taboo topic in corporate journalism is corporate ownership.
The damage caused by impatient hedge fund speculators is especially harsh for small cities and rural areas. Forget the demand for profits north of 20%; even a 10% return is a stretch in markets with fewer than 100,000 people. So, with no personal ties to these communities and even less commitment to the civic mission of local journalism, the predators often just cash out the physical assets, pull the plug, and skip town.
Thus, hundreds of smaller papers have been shuttered in the last decade–some 300 in the last two years alone–and this winnowing has created “news deserts” (counties with no local news outlets at all) across large swaths of America. As for remaining corporate media, a new Pew survey found that 57% of folks in rural areas say that their “local” news media mostly cover some other area.
The Oracle speaks
Playing the billionaires’ news game, mega-investor Warren Buffett once held a portfolio of 31 dailies and 49 weeklies, including such major city papers as the Buffalo News and the Omaha World Herald. He specialized in squeezing out competitors. Once he’d created monopoly papers, Buffett chopped staff and content to glean annual profit margins above 30%. Then along came the internet, allowing people to root around–for free!–to find local information missing from Buffett’s hollowed-out papers. Unsurprisingly, his newspapers soon began losing readers, advertisers, and profits, and, in 2020, Buffett bailed, selling off his entire portfolio. Rather than concede that maybe his slash-and-burn, profit-maximization approach had produced inferior products, “The Oracle of Omaha,” as Wall Street hails him, blasted the whole idea of local newspapers as dinosaurs, a doomed species beyond anyone’s ability to save them. They’re “toast,” he proclaimed.
Not so fast, your Oracleness.
Day by day, when they’re done right, timely local publications both chronicle and help shape a community’s story. And that’s a social benefit that is as valuable–and as marketable–as ever. It’s not that people have given up on local news, but that most of today’s papers are not really local, not very newsy, and not of, by, and for the workaday people in our multifaceted communities.
For example, nearly every corporate daily publishes a business section, chock-a-block with corporate press releases, meaningless syndicated filler (“CEOs optimistic about growth”), and puff pieces about yet another high-tech start-up. Does even 1% of the population read that stuff? Meanwhile, how about economic news of interest to the great majority of locals: workers? Where’s the regular section that digs into the area’s wages, job losses and openings, workplace conditions, commuting advice, affordable housing, worker safety, job discrimination, child care availability, abuse hotlines, unionizing efforts, and the myriad of other real-life issues that confront this majority on a daily basis? As I’ve long maintained, the relevant indicator of the wellbeing of nearly every American family is not the Dow Jones Average (which newspapers cover obsessively), but the Doug Jones Average. How are Doug and Donna doing? That’s news that would sell papers.
A phoenix rises!
While investment syndicates aggressively merge, purge, shrink, and loot traditional businesses in my town and yours, a phoenix is rising in the spaces they’ve left behind. We don’t need to surrender to the local-papers-are-toast narrative, for imagination and grit are loose on the land. From big cities to rural counties, hundreds of determined efforts, often led by people of color, are underway to revive local newspaper journalism.
Take just one aspect with both a substantive and symbolic impact: The newsroom itself. Sparked by populist creativity, scrappy new community papers are moving into friendlier, more central, street-level newsrooms–set in public libraries, journalism schools, etc.–so that regular people can see and directly access them. The Ferndale (CA) Enterprise works from an old Victorian home and rents rooms to vacationers for additional income. The editor of the Sahan Journal in Minneapolis moves his weekly editorial meeting to the offices of various grassroots groups so their members can have input. And in Marfa, Texas, the new owners of the Big Bend Sentinel are truly serving the public, not only with a good weekly, but also with The Sentinel–a combo coffee shop, cozy bar, cafe, event space, and hangout for locals to meet and greet.
It was not so very long ago that dozens of scrappy, independent newsweeklies sprang up in city after city, town after town. By creating a viable alternative model of free tabloids, they outflanked the monopoly dailies in their markets, dramatically increasing coverage of ignored community issues and voices. Now come “paperless” city papers like Lookout (Santa Cruz), Billy Penn (Philadelphia), and DigBoston; special topic news sites like Daily Yonder (rural) and Circle of Blue (water); and hundreds of hardscrabble community papers like Flint Beat and Iowa’s Storm Lake Times.
In ways big and small, dedicated local journos are experimenting with funding, structures, staffing, etc., to produce the news that democracy requires:
Foundations are seeding local projects and journalist positions. Take, for example, the Local News Lab–a project of the Democracy Fund. The Lab reports on the many new “experiments in journalism” and provides resources for anyone who wants to get started. localnewslab.org
LION Publishers (Local Independent Online News)–with more than 275 members–provides resources and community to independent news entrepreneurs as they try to build sustainable local businesses. lionpublishers.com
The Institute for Nonprofit News connects more than 300 independent news organizations dedicated to the radical proposition that “everyone deserves access to trustworthy sources of news.” inn.org
Note to hedgefunders: These projects aren’t intended to “scale,” since–as Josh Stearns of the Democracy Fund says–it was corporate ambitions to cut costs by consolidating and “scaling” that got us into this mess. Instead, by sharing ideas, learning, and resources, these local projects help each other succeed. And unlike the hedge-fund papers, their success is not measured simply by financial return, but also by community benefit–how they help keep citizens informed and engaged.
Unionization is sweeping into dozens of hedge fund papers, so journalists themselves gain clout to report on and unify against corporate cuts, banality, and plundering.
More city governments are mandating that a fair portion of their advertising budgets go to local community pubs, rather than remote chains.
And Ralph Nader, always the creative thinker and doer, has launched Reporters Alert, a digital publication pointing out important topics that news outlets should be covering.
These and so many more examples are glimmers of real journalistic hope across our land. Committed community journalists are determined democracy fighters, butting their heads against the money wall to bang out honest news for local residents, not windfalls for profiteers. Instead of bemoaning the decline of the free press, let’s join with these gutsy journalists and activists who’re actually working to “free” it! Subscribe, donate, volunteer, spread the word … and generate your own ways of helping them help us.
Hello Wall Street, Pottstown Calling
The callous shriveling of local people’s news coverage by Wall Streeters is sacrilege to hard-nosed newshounds like Evan Brandt, a proud 23-year veteran of The Mercury in Pottstown, PA, some 40 miles northwest of Philly. Until it was sold in 1998 to the Journal Register Company (known for gutting its newsrooms), The Mercury had a full-fledged staff covering Pottstown and surrounds. In 2011, though, Alden Global Capital swept in to grab The Mercury off the bargain table. Instead of investing in the paper’s potential, the hedge fund milked it for profits: It pocketed the subscription and ad revenue while making round after round of cuts to staff and coverage.
By 2019, Brandt was the only one left, serving as both editor and sole reporter for a publication responsible for covering vital local doings–from government action to corporate shenanigans, sports to elections, weather to protests. Impossible. Alden even sold off The Mercury‘s downtown office building, so Brandt’s “newsroom” is attic space in his home. And then last year, Alden pulled a whopping 30% profit from its Philadelphia- area properties, including the Pottstown paper. Brandt says that this “grilled my onions.” So, the portly, 55-year-old journalistic maverick did the unthinkable: He drove his Toyota Corolla 240 miles to New York so he could put a question to his boss–not the boss of Alden’s newspaper division, but the Big Boss, a guy named Heath Freeman, president of Alden Global Capital.
Heath lives in a waterfront mansion in Montauk, Long Island, one of the Wall Street power elites’ tony seaside villages. The rumpled reporter, in a black T-shirt proclaiming “#NEWS MATTERS,” went right up and knocked on Freeman’s door. As he later told the New York Times, when the door was opened onto the mansion’s foyer, Brandt caught a glimpse of the 40ish tycoon of vulture capitalism standing upstairs. The encounter lasted only a few seconds, but Brandt seized the moment, locking eyes with Freeman, and pointedly asking: “What value do you place on local news?”
The vulture just shook his head and fluttered away.