"An attack on our democracy": Financial firms gutting some local newsrooms
Summary
TLDRThe newspaper industry in America faces a dual threat: a two-decade decline in advertising revenue due to digital platforms like Facebook and Google, and the aggressive cost-cutting practices of hedge funds like Alden Global Capital, which has been accused of 'vulturing' newspapers. This has led to a significant reduction in local news coverage, raising concerns about the impact on democracy. Journalists like Evan Brandt struggle to cover communities with dwindling resources, while the potential sale of Tribune Publishing to Alden sparks a fight to preserve local news. The script also highlights the importance of local journalism in holding leaders accountable and the efforts of philanthropists and reporters to reinvent the industry.
Takeaways
- 📉 The newspaper industry is in decline, with a significant loss of advertising revenue to platforms like Facebook and Google.
- 🏛️ Hedge funds and financial firms, including Alden Global Capital, own nearly a third of daily newspapers in America, often prioritizing profits over journalistic integrity.
- 📰 Local newsrooms are shrinking, leading to a decrease in local news coverage, which is crucial for community cohesion and holding local leaders accountable.
- 🏆 The Mercury, a local newspaper in Pennsylvania, won Pulitzer Prizes in 1979 and 1990 but has since seen dramatic staff reductions.
- 💼 Alden Global Capital has been accused of 'vulture capitalism,' buying newspapers, selling off assets, and cutting staff, leading to concerns about the future of local journalism.
- 🤝 Journalists at the Chicago Tribune fought back against Alden's acquisition, highlighting the importance of local and regional newspapers in a democratic society.
- 🏢 The decline in local news has been linked to increased corruption in local government, as seen in the case of Bell, California.
- 🌐 The vacuum left by local newspapers has been filled by national cable news and social media, often leading to more polarized and less localized content.
- 🆘 Solutions proposed include an increase in philanthropic support for local news and the creation of non-profit digital news outlets to focus on community-specific reporting.
- 🏡 The script concludes with a call to action for individuals and organizations to support local news as a vital component of American democracy.
Q & A
What is the main reason for the decline of the newspaper industry as mentioned in the script?
-The main reason for the decline of the newspaper industry is the loss of advertising revenue to digital platforms like Facebook and Google.
What additional threat is mentioned in the script that affects newspapers besides the loss of advertising revenue?
-The script mentions that hedge funds and other financial firms, which own nearly a third of the daily newspapers in America, pose an additional threat. These firms are often more committed to profit margins than to maintaining the quality of journalism.
Which hedge fund is specifically criticized in the script for its practices in the newspaper industry?
-The script criticizes Alden Global Capital for its practices in the newspaper industry, with some in the industry calling it a 'vulture' that is 'bleeding newspapers dry'.
What question did Evan Brandt, a reporter for The Mercury, want to ask Heath Freeman, the president of Alden Global Capital?
-Evan Brandt wanted to ask Heath Freeman, 'What value do you place on local news, and I'm not talking about money.'
What significant job loss has the newspaper sector experienced since 2008 according to the script?
-The newspaper sector has experienced an astounding 57 percent job loss since 2008.
What was the response of some Chicago Tribune journalists to Alden Global Capital's acquisition of Tribune Publishing?
-Some Chicago Tribune journalists, including Gary Marks and David Jackson, fought back by using their investigative and reporting skills to try to save the organization and wrote an op-ed in The New York Times pleading for a philanthropist or foundation to step forward to save their paper.
What was the role of local news in uncovering corruption in the city of Bell, California, as mentioned in the script?
-When the local newspaper in Bell, California, shut down, there was no local reporting to hold local officials accountable, leading to increased corruption, including elected officials voting themselves pay raises.
What is Report for America, as referenced in the script?
-Report for America is a program co-founded by Stephen Waldman in 2017 that sends journalists to newsrooms in underserved communities across the country to flood those communities with local reporting.
How does the script suggest that the crisis in local news can be addressed?
-The script suggests that the crisis in local news can be addressed by a dramatic increase in the commitment of foundations, philanthropists, and donors to support local news.
What is the Baltimore Banner, and how does it relate to the newspaper industry crisis discussed in the script?
-The Baltimore Banner is a non-profit digital news outlet launched by Stewart Bainum to compete with the Baltimore Sun. It plans to cover only local news and hire more than 100 reporters over the next three years, aiming to fill the gap left by the decline of traditional newspapers.
Outlines
📰 The Decline of Newspaper Industry and Hedge Funds' Impact
The newspaper industry is facing a significant decline, largely due to the loss of advertising revenue to digital platforms like Facebook and Google. This has resulted in fewer Americans relying on traditional newspapers for news, sports, and comics. However, the situation is exacerbated by hedge funds and financial firms that now own nearly a third of daily newspapers in America. These new owners prioritize financial gains over journalistic integrity, leading to concerns about the quality and quantity of local news coverage. The story raises questions about the impact of shrinking local newsrooms on democracy, as seen in the case of Pottstown, Pennsylvania, where reporter Evan Brandt is the last remaining journalist for the local newspaper, The Mercury. Despite past accolades, including Pulitzer Prizes, the paper has seen significant staff cuts and a move to a smaller headquarters.
🏛️ The Battle for Local Journalism: Hedge Funds and Newsroom Cuts
Investigative reporters Gary Marks and David Jackson from the Chicago Tribune discuss the threat posed by hedge fund Alden Global Capital, which has been accused of aggressively cutting staff and selling off assets of newspapers it owns, leading to a decline in local news coverage. Alden's business model, which prioritizes profit margins over journalistic quality, has raised concerns among lawmakers and journalists. The reporters' efforts to expose Alden's practices and seek alternative ownership for the Chicago Tribune highlight the struggle to preserve local journalism. Despite facing significant challenges, including staff reductions and financial pressures, local journalists continue to fight for the importance of their work in holding local leaders accountable and serving their communities.
🌐 The Future of Local News and the Role of Philanthropy
The crisis in local news is not limited to Alden Global Capital's practices; it reflects a broader issue in the industry. The absence of robust local reporting has been linked to increased corruption by local officials, as seen in the case of Bell, California. Stephen Waldman, a former journalist and researcher, argues for the need to flood communities with local reporters and co-founded Report for America, a program that places journalists in underserved newsrooms. The importance of local news is emphasized by the trust people have in it compared to national media. The narrative also includes the experiences of local reporters like Chrisana Mink, Camelot Todd, Amelia Farrell, Chris Jones, and Grayson Doctor, who cover various critical issues in their communities. The piece concludes with the efforts of individuals like Stewart Bainum, who is launching a non-profit digital news outlet to compete with established newspapers, and the conviction of journalists like Gary Marks and David Jackson that local news is essential for the survival of American democracy.
Mindmap
Keywords
💡Newspaper industry decline
💡Advertising revenue
💡Hedge funds
💡Local news coverage
💡Democracy
💡Vulture capitalism
💡Job loss
💡Investigative reporters
💡Philanthropy
💡Non-profit newsroom
💡Digital news outlet
Highlights
The newspaper industry has been in decline for two decades, largely due to the loss of advertising revenue to Facebook and Google.
Hedge funds and financial firms own nearly a third of daily newspapers in America, often prioritizing profits over journalistic quality.
One fund, Alden Global Capital, has been criticized for 'bleeding newspapers dry', highlighting a threat to local news coverage.
The decline in local newsrooms raises questions about the shrinking of democracy as local news coverage decreases.
Evan Brandt, a reporter for The Mercury, is the last reporter standing in Pottstown, Pennsylvania, after significant staff cuts.
The loss of local reporters affects communities' shared experiences and the ability to hold people together.
The Mercury, once a Pulitzer Prize-winning newspaper, now operates from a small attic due to cost-cutting measures.
Alden Global Capital has been accused of selling off newspaper assets and slashing staff, leading to a 70% reduction in The Mercury's newsroom.
The newspaper industry has seen a 57% job loss since 2008, with Alden Global Capital's practices being particularly severe.
U.S. lawmakers have expressed concern over Alden's business model, which has been described as 'killing newspapers'.
Alden's acquisition of Tribune Publishing, home to historic papers like The Baltimore Sun and The Chicago Tribune, has been criticized.
Investigative reporters at The Chicago Tribune fought back against Alden's acquisition, fearing irreversible damage to their paper.
Leaked financials show Alden's newspapers had profit margins as high as 30%, more than double the industry standard.
Critics argue that Alden doesn't recognize the civic trust embedded in the profit-making machine of newspapers.
The absence of local reporting has been linked to increased corruption by local officials, as seen in Bell, California.
National cable news and social media have filled the vacuum left by local news, often leading to polarized and less reliable information.
Report for America, co-founded by Stephen Waldman, aims to flood communities with local reporters to counter the decline in local news.
Local news is trusted more than national media, and local reporters have deeper connections with their communities.
The crisis in local news requires a commitment from foundations, philanthropists, and individual donors to support local journalism.
Stuart Bainum, a hotel magnate, is launching a non-profit digital news outlet to compete with The Baltimore Sun, focusing on local news.
Journalists like Gary Marks and David Jackson emphasize the necessity of local news for the survival of American democracy.
Heath Freeman, the president of Alden Global Capital, has been criticized for his company's practices but has made significant personal real estate purchases.
Transcripts
newspaper industry in state of decline
not exactly a stop the press's headline
for two decades now owing largely to the
loss of advertising revenue to facebook
and google fewer and fewer americans get
their news comics and sports from all
those gazettes and tribunes and journals
but that doesn't tell the whole story as
we first reported in february there is
an additional threat hedge funds and
other financial firms that own nearly a
third of the daily newspapers in america
and these new owners are often committed
not to headlines and deadlines but to
bottom lines one fund in particular has
been called by some in the industry a
vulture bleeding newspapers dry
it all prompts the question as local
newsrooms and local news coverage
shrivel up to what extent does democracy
shrink with it
the story will continue in a moment
[Music]
behind the marching band and baton
twirlers at the annual 4th of july
parade in pockettown pennsylvania
you'll find a one-man band
reporter evan brandt snapping photos
taking notes and gathering quotes
the paper comes out tomorrow tomorrow
every day
tell me all about what you're doing here
we're just looking forward to a great
fourth of july for the last 24 years
he's chronicled this community of 23 000
for the local newspaper the mercury
j-a-s which at one time had dozens of
reporters
now brandt is literally
the last reporter standing in pottstown
when a community like this loses their
local reporters
what else are they losing it reminds us
all about shared experiences
you know who died
you know who graduated from high school
you know whose kid had a great game you
know those are all important elements
about holding people together
describing the
soul of a community sure
brant took us to the old headquarters of
the mercury punching above its weight
the mercury won a pulitzer prize in 1979
and another in 1990.
now it looks like this
my desk was
right about here
and the editor sat up there
the sports guys were along here the
photographers were in the back anyone
could walk in the front door and say
i need to talk to a reporter my sewer's
backing up and the township isn't doing
anything about it can you do something
behold the new mercury headquarters
we're going up to the mercury newsroom
france turned his attic into a command
center
here's where the magic happens
it's here that he scrambles to cover
pottstown 20 surrounding towns and nine
different school districts
overworked and overwhelmed brandt has
seen his industry battered by all sorts
of forces disappearing classified ads
people getting news for free online but
he says the worst culprit is the hedge
fund alden global capital which bought
the mercury in 2011 and has since sold
the paper's building and slashed
newsroom staff by about 70 percent
severe even by the standards of the
newspaper sector that has seen an
astounding 57 percent job loss since
2008.
in 2017 after another round of layoffs
brandt says he felt angry and wanted
answers and accountability so he paid a
visit to the hampton summer home of
heath freeman the 41 year old president
of alden global capital and knocked on
the door what did you want to say to him
what i settled on is
what value do you place on local news
and i'm not talking about money what
value do you place on
brent recalls that a woman let him in
behind her he caught a glimpse of
freeman who walked away
you never got to ask him that question i
did not
this secretive hedge fund their website
shows this single photo started building
its print empire over the last decade
and now owns more than 200 newspapers
making it the country's second largest
newspaper owner behind ganette
alden's rapid takeover and cuts have
alarmed u.s lawmakers in 2019 21
senators wrote to heath freeman asking
him to abandon his newspaper killing
business model
freeman though has doubled down last
year alden made a play for tribune
publishing home to historic papers like
the baltimore sun and the chicago
tribune this is an attack on our
democracy
gary marks and david jackson spent 30
years as investigative reporters at the
chicago tribune a paper that has won 27
pulitzer prizes local and regional
newspapers are so important
to our communities to holding our
leaders accountable they're not just
going after some business that is trying
to make money
they admit the tribune had been crippled
for years by bad management but after
seeing alden by the denver post and then
gut staff by 70 percent the journalists
were worried the hedge fund would do
irreversible damage so what'd you do we
fought back
that's what we did dave and i just
decided that we are going to throw
everything we possibly can use all our
investigative and repertorial skills to
save this organization that is so
important we felt to the future of the
city we love chicago
so this investigative team accustomed to
exposing corruption and injustice acting
as watchdogs on local government they
turn their attention to their potential
new owners
you've said when alden capital arrived
it was an existential threat
why is this firm
particularly nefarious well alden has
sort of a playbook of going into a
distressed newsroom
and selling off the real estate and
property equipment things like that and
second of all diminishing the resources
that the reporters have
leaked company financials show in 2017
alden built in profit margins as high as
30 percent at certain papers more than
double industry standard
in recent filings the new york times
company reported 10 profit margins these
are uh executives from a hedge fund who
live in a very uh wealthy lifestyle
they're not
taking the profits and uh using them to
build the tribune what's your response
to someone who'd say look this is
capitalism well we've always been aware
that we're doing journalism in
a capitalist democracy and we've always
embraced that but we felt that alden
didn't recognize the civic trust that's
embedded in this profit-making machine
jackson and mark say what they learned
about alden only fueled their sense of
urgency so in 2020 putting their jobs at
risk they wrote an op-ed in the new york
times pleading for a philanthropist
foundation anyone to step forward to
save their paper
one man tried maryland hotel magnate
stuart bainum a lifelong subscriber to
the baltimore sun
baynam committed 200 million dollars and
we followed him last year scrambling to
put together a deal to buy tribune
publishing we've done the due diligence
we just need a buyer
bainum couldn't find a partner last year
alden bought tribune publishing for more
than 600 million dollars and two days
later started offering buyouts to
tribune employees more than 40 have
since left the chicago tribune including
one-fourth of the newsroom
freeman declined our repeated request to
sit down with 60 minutes but his public
relations team sent us letters he wrote
to other newspaper owners that state
alden is committed to providing robust
independently minded local journalism
and that it's time for tech giants to
start paying for the billions of dollars
they're making off of news publishers
content
the newspaper crisis didn't begin with
aldon and this is not the only financial
firm in this sector but alden is often
held up as the worst actor one study
conducted by the university of north
carolina in 2018 found that some alden
owned newspapers had cut staff at twice
the rate of their competitors
stephen waldman is a former journalist
in 2011 he studied the decline of the
local news industry for the federal
communications commission he says that
in the absence of local reporting
there's evidence of increased corruption
by local officials one example he points
to dell california
when the local newspaper there shut down
scandal ensued thank you thank you very
much the elected officials just kept
voting themselves pay raises to the
point where the city manager was making
800 000
just because there was no one there i'm
guessing there's nothing specifically
corrupt about belle california this
wouldn't replicate in any of a thousand
other towns pretty much through all of
human history and throughout the world
when you have power that isn't watched
it tends to get abused waldman says it's
not just that local news has been
hollowed out it's what has replaced it
the vacuum was filled
by
national cable news
and social media and very opinionated
polarizing material
waldman believes in flooding communities
with local reporters in 2017 he
co-founded report for america a program
that sends print radio and television
journalists to newsrooms in underserved
communities across the country
we brought together five reporters
i'm chrisana mink i'm a pediatrician and
also a health reporter i'm camelot todd
i report on mental health from buffalo
i'm amelia farrell nicely i'm an
investigative reporter that covers
poverty in west virginia
chris jones a marine corps veteran
covers domestic extremism in appalachia
grayson doctor covers race and equity in
charlotte these studies that show that
people trust local media more than
national media it doesn't sound like
that surprise you those results
and these are our neighbors you know i
mean we're not writing about someone i'm
never going to talk to again they're
people before their interview subjects
this is jones on january 6th
he had cultivated such a level of trust
from his sources that he was one of the
few reporters covering the
insurrectionists as they stormed the u.s
capitol i got a lot of calls immediately
after the six from a lot of different
like news organizations people who
wouldn't answer an email from me you
know a week prior you were the local
journal you had the sources you had the
relationships a lot of national media is
coastal and it stays coastal unless
there's a big news event and then they
fly the reporters in
write the story and fly them out
grayson doctor experienced this
firsthand her mother was one of nine
african americans killed by a white
supremacist
in the 2015 mother emanuel church
shooting in charleston
doctor felt that when the national media
parachuted in they were looking for
sound bites instead of examining the
deeper questions especially in a place
like charleston south carolina where
like the history of racism runs very
very deep that was the opportunity to
really dive into some of that history
you know like why did this happen in
this community
while newspapers like the washington
post and la times have been bought by
billionaires waldman says addressing
this crisis falls to all of us
we need a dramatic increase
in the
the commitment of foundations and
philanthropists and donors like you and
me to actually supporting local news
remember stewart bainum who lost out to
alden global capital he's launching the
baltimore banner a non-profit digital
news outlet to go head to head with the
baltimore sun for subscribers it will
cover only local news with plans over
the next three years to hire more than
100 reporters
all digital the web newsletters podcasts
apps wherever people receive their news
we're going to go there
after sounding the alarm about alden
global capital gary marks and david
jackson left the chicago tribune jackson
is still working as a reporter at a
non-profit newsroom in chicago full
speed full speed marks is now living
what he calls his second dream job as a
high school football coach
they're more convinced than ever that
local news cannot become yesterday's
news you're faster than that journalism
is one of the most noble professions
there is you can have tremendous impact
on society
i work with a lot of young people and i
tell them that the
we're leaving them a smashed and broken
system but that they're gonna have to
reinvent it because it's necessary
journalism is necessary for the survival
of american democracy
as for heath freeman this past summer he
bought a miami mansion for 19 million
dollars a transaction discovered and
reported by a local news outlet
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