Dan Kennedy

How a private equity firm that destroyed newspapers helped Trump in Chicago

Trump’s Chicago tower under construction. Photo (cc) 2006 by JeremyA.

A private equity firm that helped destroy local newspapers was also involved in building Donald Trump’s Chicago tower, a fiasco that was the subject of an in-depth investigative report over the weekend produced by The New York Times and ProPublica. The story, published in the Times, found that Trump may owe $100 million because he used “a dubious accounting maneuver to claim improper tax breaks from his troubled Chicago tower.” That conclusion is based on an Internal Revenue Service investigation whose details the two news organizations uncovered.

The tower, built on the former site of the Chicago Sun-Times, was plagued by cost overruns and overly optimistic estimates of the revenues that would be brought in. But this post isn’t about Trump’s problems. It’s about this:

As his cost estimates increased, Mr. Trump arranged to borrow as much as $770 million for the project — $640 million from Deutsche Bank and $130 million from Fortress Investment Group, a hedge fund and private equity company. He personally guaranteed $40 million of the Deutsche loan. Both Deutsche and Fortress then sold off pieces of the loans to other institutions, spreading the risk and potential gain.

Fortress Investment Group is the firm that launched the era of private equity firms’ owning newspapers, described by Margot Susca in her book “Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy,” which was published earlier this year. I reviewed it for The Arts Fuse. As Susca wrote, Fortress paid $530 million in 2005 to purchase Liberty Group Publishing, which it renamed GateHouse Media.

GateHouse built a nationwide network of community newspapers, taking them in and out of bankruptcy twice and slashing newsrooms in order to goose revenues and fuel the acquisition of still more papers. That culminated in 2019 when GateHouse merged with Gannett, the country’s largest newspaper chain, a $1.1 billion deal that saddled the new Gannett with an enormous pile of debt. Fortress kept right on profiting, Susca wrote, as the firm continued to extract millions of dollars in managment fees. And Gannett kept right on cutting. Susca put it this way in describing what Fortress and other masters of the universe have done to newspapers, and what that has meant for democracy:

Researchers have shown that investments in sustainability, diversity, and community suffer when profit is the only goal; companies involved in those efforts to improve the world around them may actually inspire hedge funds to target them; hedge funds see line items in those businesses that, if eliminated, could lead to more profits….

At a time when government accountability and truth itself are at a crucial nexus, news organizations in the private investment era have failed citizens as these organizations have boosted private investment funds’ bottom lines.

To organizations like Fortress, it makes no difference whether they’re helping to bail out Trump or destroy newspapers. The bottom line is the bottom line, and nothing else matters.

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A great night in Dorchester

Many thanks to Joyce Linehan, who hosted Ellen Clegg and me for a book reading for “What Works in Community News” Monday evening in her Dorchester home. About 70 people atternded, including some old friends from The Boston Phoenix. Among the highlights: Ed Forry, founder of the Dorchester Reporter, showed up, bearing a copy of the Reporter’s 40th anniversary edition. I asked him to sign it.

Joyce has been hosting book readings since 2015, and here, in her newsletter, she explains how she does it. She certainly knows what she’s doing, and Ellen and I were honored to be her guests. And the Celtics won!

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Huntington News editors tell Nieman Lab how they covered the encampment at NU

From The Huntington News’ Instagram feed.

The Huntington News, the independent student newspaper that covers all things Northeastern, is featured in a Nieman Lab roundup of how college papers have been covering pro-Palestinian encampments and protests on their campuses. Lab reporter Sophie Culpepper interviewed outgoing editor-in-chief Eli Curwin and his successor, Sonal Cutler, as well as student journalists at The Daily Texan at UT Austin, the Daily Trojan at the University of Southern California and The GW Hatchet at George Washington University.

The Northeastern encampment ended almost as quickly as it began — it popped up on Centennial Common on Thursday, April 25, and was cleared out by police that Saturday morning. But though the protest may have been shorter than on many other campuses, which in some cases are ongoing, it was no less fraught.

“It was very intense, and you kind of just were full of adrenaline until you had to step away,” Curwin told Culpepper. He added, though, that the chance to cover such an important story “was really cool, because it was like, this is what we’ve been learning about; this is what we’ve been practicing for.” The News had students at the site reporting around the clock right from the beginning. I should note, too, that Northeastern co-op students have been on the team covering the encampments for The Boston Globe, and Cutler has been covering protests for the Chronicle of Higher Education.

Culpepper also wrote about the difficulty of reporting on pro-Palestinian demonstrators who are protesting the actions of the Israeli government and how that has gotten caught up in the Jewish identity of many of the students — including journalists:

Curwin and Cutler are both Jewish, and Curwin has family in Israel. Well before October 7, “this issue has been … something I constantly think about,” Curwin told me. The divided campus, “people constantly criticizing or scrutinizing our coverage,” and his personal background all amounted to “a very stressful semester.”

Many of the critical Instagram comments the publication has received are along the lines of “you guys must hate Jewish people,” as Curwin said, or “you don’t care about Jewish voices,” as Cutler put it. They, like all five student journalists I spoke with across four publications, described a deep commitment to doing their best to represent everyone’s perspectives fairly and accurately.

Two other points I think are worth nothing. First, The Huntington News has been unable to get arrest records from the campus police because they are a private agency not bound by the state’s public records law. That ought to change, since they have some official police powers. Second, even with social media having falling into a morass over the past few years, the News still relies heavily on Twitter/X and Instagram. Cutler and Curwin said the News’ website is mainly accessed by parents and faculty, while the students themselves rely on social media.

Earlier:

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Harvard rescinds suspension of a student journalist

Harvard has rescinded the suspension of a student who had been reporting for the Crimson on the pro-Palestinian emcampment, raising questions about how that particular student was identified in the first place. According to the Crimson, the student had not taken part in the protest and had only “infrequently” reported on the encampment.

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How Anne Eisenmenger built a group of free, for-profit weekly newspapers

Anne Eisenmenger with two of her friends, Duff and Sunny. Photo by Pat Lester.

On the latest “What Works” podcast, Ellen Clegg and I talk with Anne Eisenmenger, who is president of Beaver Dam Partners and publisher of several weekly newspapers in southeast Massachusetts, including Wareham Week and Sippican Week. Anne has a laser focus on developing and operating hyperlocal for-profit newspapers.

Anne lives in Wareham, and she founded her community news company there in 2010 with the launch of Wareham Week. And, yes, it’s an actual print newspaper, with a for-profit business model based on free distribution at high-traffic locations, and it’s packed with ads.

In our Quick Takes, I dive into one of the best newspaper stories in the country, which is right here in our backyard, or at least in the western sector of our backyard. It involves The Berkshire Eagle, a daily based in Pittsfield, Massachusetts, once regarded as one of the best small papers in the country. Then it fell into the hands of Alden Global Capital, so we all know what happened next. This story, though, has a happy ending, at least so far.

Ellen talked recently with Paul Hammel, a reporter doing a story on the loss of small-town newspapers across Nebraska. He focused on a couple who sold their paper, in a town of 1,000, but had to come back after retirement when the new owner quit in the middle of the night.

You can listen to our conversation here and subscribe through your favorite podcast app.

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Gannett’s latest outrage; plus, AI comes to Boston, and student journos cleared

Gannett and USA Today headquarters in McLean, Va. Photo (cc) 2008 by Patrickneil.

Even by the rock-bottom standards of Gannett, what happened to Sarah Leach was shameful. Poynter media analyst Rick Edmonds reported last week that the country’s largest newspaper chain had hit the brakes on plans to restaff some of its smaller daily newspapers. And on Thursday he wrote that his source, Leach, was fired for “sharing proprietary information with [a reporter for] a competing media company.” Edmonds called the firing “outrageous!”

The Poynter Institute, a journalism training organization, competes with Gannett? Who knew?

So how was Leach, who’s based in Michigan and managed 26 Gannett newspapers in four states, identified as Edmonds’ confidential source? Edmonds writes: “As best Leach and I can figure, they must have tapped into her office email. ‘That’s the only way I can think of that they could have known,’ she said.” That is sleazy behavior by a news company, although we all know that employers have a right to read their employees’ email. That’s why many of the newsroom sources I’ve communicated with over the years use their personal email accounts. (As always, tips welcome, and anonymity guaranteed.)

In a remarkably magnanimous post for her newsletter, Leach writes:

I’m not bitter toward my former employer. It’s not Gannett’s fault. In many ways, it’s just the natural byproduct of media conglomerates owning publications in major metropolitan areas with hundreds of thousands of people … [ellipsis hers] and papers in much smaller towns who need local journalism just as much…. [ellipsis mine]

Let’s use this moment as a catalyst for a critical conversation about local media outlets and the audiences they serve. There has been an unprecedented loss of journalists and community newspapers across the country, and news deserts are growing larger and more numerous.

Gannett owns about 200 ~~weekly~~ daily newspapers across the U.S., anchored by USA Today. The company also owns a diminishing number of weekly papers, and has closed or merged many of them in Eastern Massachusetts, sparking the rise of a number of local news startups. Gannett likes to claim that it’s simply shifting from print to digital, but — to name just one example — try finding any Medford or Somerville news on its Wicked Local website for those cities. Gannett dailies in this region include the Telegram & Gazette of Worcester, The Patriot Ledger of Quincy, The Providence Journal and the MetroWest Daily News of Framingham.

Back in February, Gannett’s chief content officer, Kristin Roberts, and chief sales officer Jason Taylor appeared on “E&P Reports,” a vodcast hosted by Editor & Publisher’s Mike Blinder, to tout the chain’s recommitment to local news. And maybe that’s continuing at the larger dailies, but who knows? I’m not blaming Roberts and Taylor, who are quality executives with solid backgrounds. But Gannett’s behavior continues to be reprehensible — not only for firing Leach but for trimming back its latest commitment to local news and for running the vast majority of its papers into the ground, leaving communities without the news and information they need.

A couple of other local news tidbits:

• AI local news comes to Boston. My writing and podcast partner Ellen Clegg spotted this one: Hoodline, which uses artificial intelligence to cover two dozen cities, including Boston, is cranking out tidbits from locales such as Boston, Everett and Bridgewater. The stories have bylines, but when you click through, you find a little “AI” next to the name. For instance: “AI By Mike Chen,” which raises the possibility that Chen is a bot — a practice we’ve seen elsewhere. (If he’s an actual journalist who’s been hired to vet this stuff, my apologies.) Here’s what Hoodline has to say about its use of AI and its “In-House Writing Collective,” which sheds some light on who Mike Chen may or may not be:

We view journalism as a creative science and an art that necessitates a human touch. In our pursuit of delivering informative and captivating content, we integrate artificial intelligence (AI) to support and enhance our editorial processes. This includes organizing information and aiding in the initial formatting of stories for the editorial phase. Our stories are cultivated with a human-centric approach, involving research and editorial oversight. While AI may assist in the background, the essence of our journalism — from conception to publication — is driven by real human insight and discretion.

It turns out that Hoodline has been around since 2018, with Disney among its original backers. Although automation was part of its DNA from the beginning, presumably its use of AI has become a lot more aggressive since the rise of modern tools such as ChatGPT in late 2022.

• Charges dropped in Dartmouth. New Hampshire state authorities have dropped charges against two student journalists for The Dartmouth. Charlotte Hampton and Alesandra “Dre” Gonzales had been arrested on May 1 while covering pro-Palestinian protests even though they were wearing clearly visible press credentials, according to the independent student newspaper.

Student journalists have been producing some of the most important coverage of both the protests and the counter-protests that have broken out in response to the war between Israel and Hamas.

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In Haaretz, Laurel Leff raises questions about an open letter signed by journalism profs

Writing in the liberal Israeli newspaper Haaretz, my Northeastern journalism colleague Laurel Leff raises some questions about a recent open letter signed by more than 50 journalism and communication studies professors calling on The New York Times to conduct an independent review of a December story on Hamas’ use of sexual assault as a weapon of war.

The story, “Screams Without Words: How Hamas Weaponized Sexual Violence on Oct. 7,” came under scrutiny after The Intercept reported that the Times had relied in part on a freelancer who had liked tweets advocating extreme violence in the Gaza Strip and that some of the harrowing details in the Times story couldn’t be corroborated. Leff, though, observes that a United Nations investigation found “clear and convincing information” that Hamas had raped and tortured Israelis on Oct. 7 as well as some of the more than 200 hostages it took, a few of whom it is still holding. She writes:

In this case, the gist of the story has held up; no clear evidence of journalistic wrongdoing has emerged, and the Times has exhibited some willingness to respond to criticisms. The professors calling for an investigation therefore seem more interested in joining an ongoing propaganda war, than in righting a journalistic wrong. That’s no place for a journalism professor to be.

Leff’s column is not behind Haaretz’s paywall, but you may need to register in order to read it. The Washington Post recently reported on the letter (free link), which you can read in full here. This is a fraught issue, obviously, and I urge you to read all the relevant documents, including the Times’ original story (free link) and The Intercept article.

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Look out, Oregon: Ken Doctor is planning a new media outlet to challenge Gannett

Eugene, Oregon. Photo (cc) 2012 by Visitor7.

The pixels were barely dry on my post about the Pulitzer Prize awarded to Lookout Santa Cruz when I learned about plans by founder Ken Doctor to launch a second Lookout Local site in Oregon’s Eugene area. The Oregonian reported last month that Lookout Eugene-Springfield will launch in late 2024 or early 2025 with a newsroom of 20, of whom 15 will be journalists. That’s more firepower than Gannett’s Eugene Register-Guard can muster. Indeed, The Oregonian published a pretty depressing report on that paper a year ago that began:

The Eugene Register-Guard, once one of the best newspapers in the region, today has no local editor, no publisher, no physical newsroom and little love from a dismayed citizenry. The news staff that once exceeded 80 now stands at six.

As was the case in Santa Cruz, California, Doctor’s reputation in the news business is standing him in good stead. He said he has already raised $2.5 million for his Oregon project and plans to scrounge up another $1.5 million. Doctor is a graduate of the University of Oregon’s journalism school, so this is something of a homecoming for him.

Doctor also has a long post up at Nieman Lab about efforts in California to bolster local news. Like longtime media analyst Jeff Jarvis, Doctor opposes efforts to extract money from Google and Facebook, noting that Meta, Facebook’s parent company, has made it clear that it doesn’t need news, and that going after Google would harm the uneasy balance between the good and bad that the company has done for (and to) journalism.

Instead, Doctor is looking to New York State, which recently created tax credits for news publishers who create and retain jobs. The key, he writes, is to ensure that those credits go to California-based publishers rather than to out-of-state conglomerates. And though he doesn’t name names, he’s presumably referring to the hedge fund Alden Global Capital, with whom he competes in Santa Cruz, and Gannett.

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Pulitzer congrats to Lookout Santa Cruz, featured in our book and podcast

Congratulations to Lookout Santa Cruz, a digital local-news startup that on Monday won the Pulitzer Prize for Breaking News Reporting. The site was recognized for its reporting on a January 2023 flood and its aftermath. In the words of the Pulitzer board, Lookout Santa Cruz published “detailed and nimble community-focused coverage, over a holiday weekend, of catastrophic flooding and mudslides that displaced thousands of residents and destroyed more than 1,000 homes and businesses.” Here’s what Lookout Santa Cruz had to say about winning the award:

We reported quickly and carefully, vetting often scattered and confusing facts, making sure we got out the accurate news and information essential to individual and community decision-making. We documented in words, images and videos what people from the reaches of San Lorenzo Valley to Pajaro to Capitola were experiencing. We called on President Joe Biden to visit beleaguered South County as well as jaw-dropping coastal damage. We did what we always do, but at warp speed and still made sure that our deep reporting work got its usual double edits by our experienced, diligent editors.

Ellen Clegg and I looked at the Santa Cruz news ecosystem in our book, “What Works in Community News.” The region is served by two digital startups — Santa Cruz Local, originally a for-profit that launched in 2019 and that converted to nonprofit status after our book was finished, and Lookout Santa Cruz, a for-profit public benefit corporation right from the start. (A public benefit corporation is a for-profit that is legally required to operate with a public service mission.) We’ve also offered more depth on the two news organizations through our podcast, interviewing Santa Cruz Local co-founder Kara Meyberg Guzman and Lookout Santa Cruz founder Ken Doctor.

Lookout Santa Cruz is a high-profile, well-funded project that received $2.5 million in startup money from the likes of the Knight Foundation, the Google News Innovation Challenge and the Lenfest Institute for Journalism. Doctor, a former executive for a former newspaper chain, Knight Ridder, spent years writing about the business of news for publications such as Nieman Lab and his own blog, Newsonomics, which is now on ice.

Doctor’s entry into the Santa Cruz media scene was not without controversy. As we wrote in our book, “Another competing media outlet, the alternative weekly Good Times, greeted Lookout with a blast, claiming that Doctor was benefiting from the ‘false narrative’ that Santa Cruz was a news desert. Doctor responded by calling that ‘the greatest free publicity that we could ever get.'”

Guzman, too, expressed a bit of pique over Doctor’s arrival, telling us that she and her business partner, Stephen Baxter — unlike Doctor — had struggled to raise the money they needed to start Santa Cruz Local after leaving Alden Global Capital’s Santa Cruz Sentinel, though over time they were able to attract some money from Google and Facebook and build a viable business. Guzman described Santa Cruz Local’s mission as providing deep accountability journalism of local government and other institutions, while Doctor said Lookout Santa Cruz was aiming to become the “new primary news source” at a time when the Santa Cruz Sentinel was fading away.

Lookout Santa Cruz is also intended as the first in a series of Lookout Local sites. Maybe the Pulitzer will give Doctor’s project the prominence it needs to start building out his idea.

Two finalists of note

Lookout Santa Cruz was one of three projects profiled in “What Works in Community News” to receive Pulitzer recognition on Monday, though it was the only one to make it into the winner’s circle. Here are the organizations we followed that earned finalist recogition:

Mississippi Today, in Local Reporting, for a collaboration with The New York Times that offered a “detailed examination of corruption and abuse, including the torturing of suspects, by Mississippi sheriffs and their officers over two decades.” We interviewed Mississippi Today CEO Mary Margaret White on our podcast in November 2022. (Mississippi Today’s Anna Wolfe won a 2023 Pulitzer for her coverage of official corruption.)
The Texas Tribune, in Explanatory Reporting, for a collaboration with ProPublic and “Frontline” that reports on “law enforcement’s catastrophic response to the mass shooting at a Uvalde, Texas elementary school and also for documenting the political and policy shortcomings that have led to similar deadly police failures across the country.” The Tribune is the subject of a chapter in our book.

Courage recognized

When we think about courageous journalists, what usually comes to mind are war correspondents. But courage can be found closer to home, too — as in the case of Lauren Chooljian and her colleagues at New Hampshire Public Radio, who were subjected to frightening harassment and daunting legal challenges while they were reporting on “corruption and sexual abuse within the lucrative recovery industry.” For their efforts they were recognized as a finalist in the Audio Reporting category. And here is a New York Times story (free link) on their ordeal.

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Bruce Mohl will retire as editor of CommonWealth Beacon

Bruce Mohl. Photo (cc) 2011 by the Rappaport Center.

CommonWealth Beacon editor Bruce Mohl has announced that he’ll be retiring later in 2024 after 15 years on the job. As Bruce notes, the publication was a four-times-a-year print publication known as CommonWealth magazine when he started and is now a growing digital operation covering state politics and public policy. He writes: “To all of you, I wanted to say thanks. Thanks for reading. Thanks for returning phone calls. Thanks for the news tips. And most of all thanks for getting involved.”

CEO Joe Kriesberg adds:

Under his leadership, CommonWealth magazine and now CommonWealth Beacon have been essential reading for all of us who are interested in and care about public affairs and civic life in Massachusetts. Bruce is widely recognized as one of the best reporters in the Commonwealth, regularly breaking stories and providing in-depth coverage of complicated issues like energy and transportation. His leadership has ensured CommonWealth’s editorial independence and maintained a standard of fair, open-minded and non-partisan coverage that is a hallmark of CommonWealth Beacon.

Best wishes to Bruce, who was a longtime editor and reporter at The Boston Globe before coming to CommonWealth, which is published by the Massachusetts Institute for a New Commonwealth (MassINC), a nonpartisan think tank. Disclosures: I’ve had a long, off-and-on association with the publication myself. For a few years in the late aughts, I wrote regular media features for the print magazine. And now I’m a member of the editorial advisory board.

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