The consolidation of the country’s newspapers has been a preoccupation of Americans who recognize the extreme importance of “the press”-who appreciate the outsized role that journalism plays in community and self-government. Large-scale, rapacious companies like Gannett (see yesterday’s post) have been the target of withering criticism for years.
But there’s a difference between corporations like Gannett and hedge funds like Alden Global Capital.
Gannett and its ilk were convinced that they could operate newspapers more efficiently–that they could do more–or at least as much– with less, and thereby continue to enjoy the high profit margins that the industry used to provide. Quality journalism was secondary–it was just the widget/product that happened to generate the all-important profits. (The fact that the company greatly overpaid for many of the papers it purchased made that optimism unrealistic.) Their first loyalty was–and is– to the bottom line, but they at least give lip service to the importance of journalism.
Hedge funds like Alden never bothered; they’ve simply “strip mined” the newspapers they’ve purchased–intentionally destroying them. As the linked article puts it, these funds are composed of
investors who have figured out how to get rich by strip-mining local-news outfits. The model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self
The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Since they bought their first newspapers a decade ago, no one has been more mercenary or less interested in pretending to care about their publications’ long-term health. Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. That might sound like a losing formula, but these papers don’t have to become sustainable businesses for Smith and Freeman to make money.
Alden’s aggressive cost-cutting makes Gannett look generous. The hedge fund has found a financially-rewarding formula: it continues to operate the newspapers it acquires at a profit for a few years, but during those years, it turns out a steadily worsening product and alienates subscribers.
This investment strategy does not come without social consequences. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Misinformation proliferates. City budgets balloon, along with corruption and dysfunction. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news.
With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the country’s most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News. It is the nation’s second-largest newspaper owner by circulation. Some in the industry say they wouldn’t be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history.
The linked article describes what happens after an acquisition by Alden, telling the stories of specific newspapers, the people who worked at them, and the cities and towns they no longer serve. It also profiles the men who run Alden–men who proudly identify themselves as “vulture capitalists” and who are identified by others as the “grim reapers” of journalism.( At least one of them–unsurprisingly–is a major supporter of Donald Trump, whose constant attacks on the news alarmed people who understood the importance of journalism to democratic governance.)
I cannot do justice to the Atlantic’s thorough and meticulous reporting in a brief blog post. Everyone reading this should click through and read the well-researched and eye-opening article in its entirety.
The crisis in local journalism has been the subject of concern and debate for well over a decade. We are now at a point where–in the absence of viable replacements for what has been lost–repairing the damage to governance and community will be difficult to impossible to achieve.
I never imagined quoting Donald Rumsfeld, of all people, but without a robust and vigorous press, we won’t know what we don’t know.
If American democracy collapses, Mitch McConnell and the sniveling invertebrates in the GOP will share responsibility with vulture capitalists like Alden Global Capital.
Stan Kroenke is married to someone in the Walton family, you know, the owners of WalMart. Well, this gouging swine also owns the Denver Nuggets of the NBA, the Colorado Avalanche of the NHL and the Los Angeles Rams of the NFL. He managed to convince a whole stadium full of morons to build a 3 BILLION dollar stadium in Los Angeles. Okay. Fine.
BUT the Rocky Mountain region has been deprived from watching the Avalanche and Nuggets on his Altitude Sports network because he and Comcast can’t agree on a “fair, market-based” financial agreement. Kroenke thinks that Comcast wants to prevent “competition” among cable providers, so he refuses to allow his two teams to be seen on the overwhelming majority of cable users in the area.
Here’s a guy who has more money than God, and still wants to squeeze another penny or two out of the cable network that makes his teams popular. You can’t make this up.
Vulture capitalism is, after all, what brought Mitt Romney to fame and fortune too. You gotta love free enterprise. As Karl Marx predicted, capitalism will destroy itself from within.
What a mess. These money people are the worst sort of humans still walking around… except for the Republicans in Congress, of course.
As I posted yesterday, US citizens have voted that their number one concern is government corruption. I’d say they are around 70 years too late in recognizing this. Just having access to a local newspaper didn’t guarantee the government wasn’t corrupt.
Trust in our institutions has reached all-time lows for good reason. As most know on this blog, it’s much worse than the American people suspect. Much worse.
We get to watch the corrupt Joe Manchin kill off legislation to address our burning planet and Biden gets to go to Glasgow empty-handed and tell the word he failed. Africa’s last snowcaps are disappearing on their mountains. It’s going to get hot.
The supply chains are bottle-necked since we’ve allowed too much concentration of power in too few hands. The number of industries experiencing worker strikes around the world must be setting records.
Meanwhile, the TV broadcasters and radio personnel read their propaganda sheets to the people.
The gap between our reality and the delusional picture they are painting is wider than it’s ever been. We cannot differentiate the truth from the false. Einstein eluded to that in 1949 and it’s only got worse.
Truth is the key, but we are torturing Julian Assange in the UK because he told us the truth a decade ago. Us taxpayers spent $2.3 trillion in Afghanistan over 20 years, and their people are starving. Where’d the money go?
Now you know why the dystopian writers predicted Hell on Earth.
Thank you SO MUCH for today’s essay, Dr. Kennedy. FoxNews and the lying blogs get most of the attention, but it seems to me that we are now getting down to the very basics of what has happened to “the Press”.
To win a battle, it’s pretty important to have a good idea about what, exactly, the enemy is doing. Now we are beginning to see how Alden Global Capital, et al. are using the corporate laws of the nation to destroy it.
And, it’s not just the giants doing this. In Montgomery County where I live, the main newspaper was sold to an out of state company many years ago. That wasn’t good, either.
When the public record contains information like this:
“Theft in the 1800 block of Indianapolis Rd. – 2:07AM”
and that’s the total story, you really kind of lose interest in what’s going on around your community.
During the 1970s, the era of self-help books, Alan Watts stated in one of his books, “Man is going to computerize himself out of existence.” This is much more than trading off a secretarial pool for one person and a computer. We have been watching this happen as news reporting becomes condensed to such as the Indianapolis Star, the only game in town. When it dwindles away due to lack of subscribers; Indiana residents will be the losers of what little news was available and Gannet will have another tax write-off. Because the Indianapolis Star is published from its factory location as the anchor of Circle Centre Mall and more than the newspaper will be lost to residents. Gannett and Alden Global Capital are all about quantity, the number of news sources they claim ownership of; quality has gone by the wayside leaving the locals uninformed on basic issues, local, national and international.
“If American democracy collapses, Mitch McConnell and the sniveling invertebrates in the GOP will share responsibility with vulture capitalists like Alden Global Capital.”
Comparing this to our current Constitutional Crisis condition in U.S. House and Senate; the fight over the filibuster, the Republicans maintain their lead using quantity rather than quality to make decisions regarding our lives and the future of this nation.
JoAnn, that’s first reference to Alan Watts I have seen anywhere in a long long time. I still have his little book “The Wisdom of Insecurity” he wrote in the 50’s. I picked it up in the early 70’s and it was life-changing for me. I plan to read it again soon. So thanks for that!
The very act of reading words and letters on a page or even a computer screen seem to be too much to ask of our society in a world of TV, Facebook and Instagram. Lately we don’t appear to be getting smarter. We appear to be getting dumber.
Patrick; you are welcome, that is the only quote from Alan Watts I remember. I do remember the title of Ayn Rand’s book, “The Virtue of Selfishness” but little of its useless content, the title says it all about Ms. Rand. Can’t remember the name of another very popular author at that time but I paid to attend one of his lectures; he was an older, bearded, overweight, foul-mouthed, full-of-himself man who spouted profanities which totally lacked the quality of his books. Alan Watts’ comment was prophetic; we watch today as it continues to expand to the computerized knowledge resulting in Capt. Kirk of the Enterprise lift off into outer space…for real.
The first time I had seen “venture capitalists” at work locally, I did not understand the business model. It turns out the business model is buying a company, raping it of all assets, and then when all of the possible immediate value is sucked dry and paid as profit, the now worthless company is sold for pennies on the dollar as a tax write off, or even better, the shell company that is left declares bankruptcy and any remaining debt is wiped off the books as all of the remaining contractual obligations are wiped off the books and the owners walk away debt free.
I saw this exact process happen with Marsh Supermarkets. The company was acquired. Over the course of several years, all of the real estate asserts were sold, stores were consolidated, or leases were signed with new owners. The books continued to show a small profit or maybe even a little loss, but the owners were getting huge payments as assists were sold. Once there were no more real estate to deal with, the liquor licenses and pharmacy business was sold off and again turned into profit for the owners. When there was absolutely no more value to be squeezed from the business, they declared bankruptcy, leaving unpaid rent and broken leases in their wake.
The reason this did not happen to every grocery store is that it is still a competitive and money making market and being a small chain with a slightly bungling family ownership, it did not grow fast enough, Marsh was left vulnerable to being sold fairly cheap. Is this pinnacle of capitalism?
The reason this is happening to almost EVERY newspaper has to do with the idiot business model that started in the dawn of the Internet Age. Every news paper just gave away their product for free, thinking those stupid advertisements you hate to see flashing on the screen were going to make up for the dollar or two a week people used to pay for a subscription. Only the idiots never calculated how many ads you would have to flash at the rate of $0.001 cent per ad to make up for that revenue. Unlike the newspaper, the advertisements were not local or relevant, sucking even more value from the online presence. A few papers still had enough paper circulation to survive the age of idiocy before they put up paywalls. The New York Times and the Washington Post and a few other national papers did that to put a stop to that idiotic business model. Now they are adding reporters and expanding coverage. I am proud to say that the local Indianapolis Business Journal has followed that same model.
It’s probably time to re-think everything we know and re-make what makes sense. We live in a not so brave new world and we’re getting pushed around by the bullies who come and yell at local elected representatives, threatening them and their families if they fail to comply. I doubt the old model of the newspaper delivered to our doors won’t work for much longer. Every time one of my neighbors moves on – whether to the great beyond or to the not so great nursing home – the new neighbor does NOT take the newspaper. We need to find and develop on-line sources and we need to do it sooner rather than later.
News conglomerates are consolidating publishing not because they want to dumb down America but to stay in business. The print media is in crisis thanks to TV and social media. When was the last time you bought a magazine? Were it not for Jeff Bezos, the Washington Post would be out of business. The disappearance of newspapers is inevitable. Let’s hope that smart alternatives to newspapers will be found to disseminate local news.
More complaints….we need ideas. See mine from yesterday and add yours or comment.
Lester, I presented the ideas 12 years ago to local leaders, including the President of the Chamber. They stole it and went to the local radio station to build a business/city propaganda website.
The problem is it lacks a free press component which is where all the power lies. The free press is the truth-seeking piece to which the people are drawn.
I wrote this article yesterday since POGO surveyed Americans who claim corruption is their number one concern. Corruption is a symptom of the lack of government accountability. That is the role of the free press. NPR is probably the best format or structure to act as our springboard to stop the damage. Once the people see the core of the corruption, we can force legislators to act by passing laws to remove the corruptive forces from government, but first, they must remove the corruptive forces from the free press. Fund NPR fully by taxpayers – no more corporate donations.
Press freedom means the journalists must be able to hold the powerful accountable without fear of retaliation and we must protect whistleblowers at all costs. These two pieces are crucial!
https://muncievoice.com/25136/government-corruption-is-public-enemy-number-1/
Lester and everyone, consider making a contribution to a related non-profit in this cause. Or better get get involved. There are some great writers among this gang!
Also see the tweet and article by Kevin Corcoran, an Indianapolis resident and executive with The Lumina Foundation. I will try and find the AJP article specifically about Indiana journalism and post it here as well.
https://www.theajp.org/
https://twitter.com/journalismproj/status/1450089294358630404?s=21
Our society consists of individuals who spend some of their time working as individuals and some working as part of organizations. Their time as part of organizations is both leveraged by collaboration with others and compromised because the common purpose of the organization might only partially align with the needs of any individual within it.
This is not some profound revelation but only the reality of life today and our lives as part of it.
While both kinds of activities explain part of everyone’s life, one of the realities of life among so many humans living immersed in technology is that we each alone have much less power and influence than we do when working in concert with others.
As one example corporations have more power and influence in society than any individual in them. So do unions and states and charities and churches and political parties and every other organization.
People who thrive on power understand this and they use this magic to leverage their time through the complementary efforts of others in organizations that they are influential in.
This is why they worship authoritarianism, the power of being the boss.
If you believe as I do that that culture has to be balanced by our individual need to live free some of the time and organized at other times the secret to bringing that change about is to do it through organization with others. That seems paradoxical but also true.
Our best chance to do that effectively is, in my opinion, through the Democrat Party. But it has to be a united Democrat Party. As is always true it is in how we are united that power and leverage are created not in how we are divided. In the perfect world, that party would demonstrate the power of union as the country has done on a few occasions like our founding, and slowly spread it back to our whole country.
Life contains many paradoxical realities. This is a fundamental one.
Someone has started a local newspaper here in Pike Township which I am glad to see. However, it has yet to address the drag racing that is going on or the increase in gun shots I hear at night. Still, I am glad someone has started this. Recently, it told us that unless people started donating to the newspaper, it would go out of business. As a result, people donated enough to keep it going.
I do wonder if the day will come when we get our news strictly from streaming and from journalism on the internet. Hopefully, local journalists will take advantage of the internet. The good news about that is it uses less paper. God knows we need trees to help us decrease global warming.
Gannet and Alden Global are perfect examples of what happens when corporations follow Ayn Rand’s philosophy. Greed is an inherent characteristic of selfishness. And, of course, our corporate oligarchy does not want us to be informed of government corruption.
If we are going to maintain a free press, then local citizens and journalists will need to create alternatives to the news controlled by the oligarchy. I can only hope that our Pike Township paper will eventually demonstrate the courage of investigative journalism so that we can see any corruption that emerges in our local government.
Todd states the problem(s) well today, but is the real problem government corruption but rather citizen inattention to it? And is citizen inattention the result of lack of civic education? And is lack of civic education because of a deliberate attempt by politicians to keep the sheep in line via ignorance and propaganda and thus tolerant of government corruption (speaking of civic circular firing squads)? And, since this play on words could go on forever, let’s end it by putting it in ministrel terms: De head bone’s connected to de neck bone. . . and . . . . .
I don’t understand why some of the obscenely rich such as Vern today identified are attempting to undermine our teetering democracy via acquisition of our (we pretend) free press and other forms of communication (Fox, Sinclair et al) in favor of fascist Trumpian oligarchy. Don’t they understand that the history of fascism includes ruthless purges of those who brought that ism to the fore, or, historically, how many times Nazis attempted to assassinate Hitler?
It should be clear to anyone that fascism by its very nature is unstable and subject to counterrevolution, especially as applied in this country since there are millions of us who have tasted democracy (even with its own shortcomings as noted by Todd) and prefer it over some form of fascist oligarchy led by Trump or a Trumpian monster. I should think that Sam Walton’s heirs and devisees (who I read recently make $142,000 a minute) would prefer sheep-leading to sheep-following where the shepard and his family are themselves involved in acquiring the assets of others, including those of Sam’s inheritors and other beneficiaries.
But is anyone thinking? How far will Trumpers and the rich go to own the libs? We’ll see. . .
Gerald, US society has allowed the organization type “corporations” to have outlandish influence over government because we hope that we, personally will share in the rewards of corporate power vs government power. We see corporations as income and government as expense which is a huge over-simplification for everyone but those who own the means of production, capitalist authoritarian investors. (https://en.m.wikipedia.org/wiki/Authoritarian_capitalism)
For the rest of us who are a complex mix of citizen, worker, consumer, tax payer, infrastructure user, and family, we have to look at a much bigger picture that’s much more complex.