Sunday’s “60 Minutes” episode on the local news crisis was a worthy if unoriginal treatment focusing on the depredations of Alden Global Capital, the hedge fund that is our worst newspaper owner. Viewers are also introduced to Report for America, the organization that’s placing journalists in underserved communities around the country. If you didn’t get a chance to see it, you can tune in here.
Tag: Alden Global Capital Page 3 of 10
The Poynter Institute has published an important story on the difficulty of tracking layoffs of journalists, especially journalists of color. As Kristen Hare writes, very few news organizations let it be known when they’ve eliminated positions. “For an industry that prizes transparency,” she says, “we’re experts at asking for it and rotten at actually offering it.”
She’s right, and it’s something I’ve found pretty frustrating whenever I hear reports that newspapers owned by Gannett or Alden Global Capital have downsized once again. Since many news organizations follow the practice of last hired, first fired, journalists from underrepresented groups tend to be disproportionately affected — but finding out exactly what happened is difficult if not impossible. Hare offers three explanations for why this information is so hard to come by:
- “Lack of public notice about who was laid off and where
- “A reluctance among some journalists to say anything publicly
- “Growing use of nondisclosure agreements that include non-disparagement agreements”
Hare also quotes my Northeastern journalism colleague Meredith Clark, who’s been working with the News Leaders Association to revive its annual survey of newsroom diversity — a survey that was suspended several years ago because so few news organizations were responding. Dr. Clark puts it this way:
The thing is, journalism as an institution, as a business, has a vested interest in continuing to isolate people in terms of their knowledge of what the field actually looks like. And the corporatization of journalism helps with that because it’s easy to say, “Oh, this is a problem for HR,” or, “Oh, because of legal we can’t do this.”
Clark is absolutely right, and it extends well beyond layoff and diversity numbers. I’ve been covering the news media for more than 25 years, and though I’ve found a great deal of openness to the idea that journalists should be as transparent as they expect their sources to be, I’ve encountered plenty of examples of the opposite, too.
Unfortunately, we can’t file public-records requests or demand the right to attend meetings at media outlets. Rather, we have to rely on news executives to do the right thing. If they think government officials should be compelled to release data that casts them in an unfavorable light, then why do they think it ought to be different for media organizations?
Callie Crossley of GBH News is a multitalented broadcast journalist and producer. She hosts “Under the Radar with Callie Crossley” and shares radio essays each Monday on GBH’s “Morning Edition.” She also hosts “Basic Black,” which covers news events that have an impact on communities of color. Crossley’s work on “Eyes on the Prize: America’s Civil Rights Years” won numerous awards.
In a wide-ranging conversation with Ellen and Dan, Crossley shares her views on the thinning out of local news outlets and offers sage advice for next-generation journalists. Callie and Dan were regulars on “Beat the Press,” the award-winning GBH-TV show that featured media commentary, which ended its 22-year run in 2021. In 2019, both of them received the Yankee Quill Award from the New England Society of Newspaper Editors.
In Quick Takes on developments in local news, Dan laments the rise of robot journalism, and Ellen reports on an effort by publisher Lee Enterprises to fight off a takeover bid by the hedge fund Alden Global Capital.
You can listen to our conversation here and subscribe through your favorite podcast app.
At least two New England newspaper publishers have begun using artificial intelligence rather than carbon-based life forms to report on real-estate transactions.
The Republican of Springfield, online as MassLive, and Hearst Connecticut Media, comprising the New Haven Register and seven other daily newspapers, are running stories put together by an outfit called United Robots. MassLive’s stories are behind a hard paywall, but here’s a taste from the Register of what such articles look like.
United Robots, a Swedish company, touts itself as offering “news automation at massive scale using AI and data science.”
Last year I wrote about artificial intelligence and journalism for GBH News. I’m skeptical, but it depends on how you use it. In some ways AI has made our lives easier by, for instance, enhancing online search and powering the inexpensive transcription of audio interviews. But using it to write stories? Not good. As I wrote last year:
Such a system has been in use at The Washington Post for several years to produce reports about high school football. Input a box score and out comes a story that looks more or less like an actual person wrote it. Some news organizations are doing the same with financial data. It sounds innocuous enough given that much of this work would probably go undone if it couldn’t be automated. But let’s curb our enthusiasm.
Using AI to produce stories about real-estate transactions may seem fairly harmless. But let me give you an example of why it’s anything but.
In November, I accompanied Tom Breen, the managing editor of the New Haven Independent, as he knocked on the doors of houses that had been foreclosed on recently. The Independent is a digital nonprofit news site.
Breen has spent a considerable amount of time and effort in housing court and poring through online real-estate transactions. From doing that, he could see patterns that had emerged. Like Boston and many other cities, New Haven has experienced an explosion in real-estate prices, and a lot of owners are flipping their properties to cash in. In too many cases there are victims — low-income renters whose new landlords, often absentee, jack up the rents. Breen takes the data he’s gathered and rides his bike into the neighborhoods, knocking on doors and talking with residents. It’s difficult, occasionally dangerous work. Once he was attacked by a pit bull.
We didn’t have much luck on our excursion. No one was home at either of the two houses we visited, so Breen left notes behind asking the residents to call him.
“If investors are swapping properties at $100,000, $200,000 above the appraised value and tens of thousands of dollars above what they bought it for two days prior,” Breen told me, “all that can do is drive up costs that are passed down to the renters — to the people actually living in the building.”
The result of Breen’s enterprise has been a series of stories like this one. The lead:
Tenants of a three-family “lemon” of a house on Liberty Street are wondering how two landlords managed to walk away with $180,000 by double-selling a property that they say remains a dump.
You’re not going to get that kind of reporting from artificial intelligence.
Now, of course, you might argue — and some have, as I noted in my GBH News piece — that AI saves journalists from drudge work, freeing them up to do exactly the kind of enterprise reporting that Breen does. But story ideas often arise from immersion in boring data and sitting through lengthy proceedings; outsource the data collection to a robot, and it’s likely that will be the end of it.
At the corporate chains that own so many of our newspapers, there’s little doubt that AI will be used as just another opportunity to cut. Hearst and Advance, the national chain that owns The Republican, are not the worst or most greedy newspapers chains by any means. But both of them have engaged in more than their share of cost-cutting over the years.
And it’s spreading. United Robots’ U.S. clients include the McClatchy newspaper chain and The Atlanta Journal-Constitution, part of the Cox chain. No doubt the Big Two — Gannett and the groups owned by Alden Global Capital — won’t be far behind.
There’s been some confusion over Chicago Public Media’s acquisition of the Chicago Sun-Times, a tabloid that is the city’s number-two daily newspaper. For example, The New York Times reported that “the ownership structure would be similar to that of The Philadelphia Inquirer, a big-city paper that the nonprofit Lenfest Institute for Journalism has run since 2016.”
Well, no. The Inquirer is a for-profit newspaper owned by a nonprofit organization. If the Inquirer itself were a nonprofit, it would be barred from endorsing political candidates. In fact, the paper continues to endorse candidates and published an “Endorsement Guide” as recently as last fall.
What’s happening in Chicago is different. The ownership of the Sun-Times will be converted to nonprofit with its own board, according to WBEZ, the broadcast arm of Chicago Public Media. The Sun-Times itself reports that the paper will “convert from for-profit to nonprofit status.” That would make it the second major daily paper to become a nonprofit, following The Salt Lake Tribune. Recently the executive editor of the Tribune, Lauren Gustus, reported that the paper is healthy and growing under nonprofit ownership.
As I mentioned, there is one disadvantage to nonprofit ownership: news organizations can’t endorse candidates or advocate for certain legislative actions without endangering their tax-exempt status. Of course, there are plenty observers who see that as a feature rather than a bug. For instance, David Boardman, chair of the Lenfest Institute, greeted the news that the Sun-Times will no longer be able to endorse with this:
But endorsements can be useful, especially in smaller races to which voters may be paying minimal attention. Besides, it’s an infringement on free speech. Such a rule didn’t even exist until Lyndon Johnson rammed it through the Senate in order to silence political opponents back home in Texas.
In any event, with Alden Global Capital disemboweling the long-dominant Chicago Tribune, the announcement that WBEZ and the Sun-Times will soon be covering the region with a combined newsroom is good news. And it shows that people and institutions are willing to step up when market failure undermines local news coverage.
Hopes were running high when we all turned the calendar to 2021. Would the worst 12 months in anyone’s memory give way to the best year of our lives?
Not quite. Yes, it was better than 2020, but 2021 was hardly a return to paradise. The joy of vaccinations gave way to the reality that COVID-19 is likely to be with us for a long time. The economy recovered rapidly — accompanied by the highest rate of inflation in 40 years. Worst of all, the end of the Trump presidency morphed into a crisis of democracy that is starting to look as ominous as the run-up to the Civil War.
During the past year, I’ve been struggling to make sense of the highs, the lows and the in-betweens through the prism of the media. Below are 10 of my GBH News columns from 2021. They’re in chronological order, with updates on many of the pieces posted earlier this year. If there’s a unifying theme, it’s that we’re in real trouble — but that, together, we can get through this.
• The end of the Trump bump, Jan. 27. Even as he was denouncing journalists as “enemies of the people,” Donald Trump, both before and during his presidency, was very, very good for the media. Cable TV ratings soared. The New York Times and The Washington Post signed up subscribers by the bucketload. Several weeks after Trump departed from the White House, though, there were questions about what would happen once he was gone. We soon got an answer. Even though Trump never really left, news consumption shrank considerably. That may be good for our mental health. But for media executives trying to make next quarter’s numbers, it was an unpleasant new reality.
• Local news in crisis, Feb. 23. The plague of hedge funds undermining community journalism continued unabated in 2021. The worst newspaper owner of them all, Alden Global Capital, acquired Tribune Publishing and its eight major-market papers, which include the Chicago Tribune, New York’s Daily News and, closer to home, the Hartford Courant. When the bid was first announced, there was at least some hope that one of those papers, The Baltimore Sun, would be spun off. Unfortunately, an epic battle between Alden and Baltimore hotel mogul Stewart Bainum resulted in Alden grabbing all of them. Bainum, meanwhile, is planning to launch a nonprofit website to compete with the Sun that will be called The Baltimore Banner.
• The devolution of Tucker Carlson, April 15. How did a stylish magazine writer with a libertarian bent reinvent himself as a white-supremacist Fox News personality in thrall to Trump and catering to dangerous conspiracy theories ranging from vaccines (bad) to the Jan. 6 insurrection (good)? There are millions of possible explanations, and every one of them has a picture of George Washington on it. Carlson got in trouble last spring — or would have gotten in trouble if anyone at Fox cared — when he endorsed “replacement theory,” a toxic trope that liberal elites are deliberately encouraging immigration in order to dilute the power of white voters. A multitude of advertisers have bailed on Carlson, but it doesn’t matter — Fox today makes most of its money from cable fees. And Carlson continues to spew his hate.
• How Black Lives Matter exposed journalism, May 26. A teenager named Darnella Frazier exposed an important truth about how reporters cover the police. The video she recorded of Minneapolis police officer Derek Chauvin literally squeezing the life out of George Floyd as he lay on the pavement proved that the police lied in their official report of what led to Floyd’s death. For generations, journalists have relied on law enforcement as their principal — and often only — source for news involving the police. That’s no longer good enough; in fact, it was never good enough. Frazier won a Pulitzer Prize for her courageous truth-telling. And journalists everywhere were confronted with the reality that they need to change the way they do their jobs.
• The 24th annual New England Muzzle Awards, July 1. For 24 years, the Muzzle Awards have singled out enemies of free speech. The Fourth of July feature made its debut in The Boston Phoenix in 1998 and has been hosted by GBH News since 2013, the year that the Phoenix shut down. This year’s lead item was about police brutality directed at Black Lives Matter protesters in Boston and Worcester the year before — actions that had escaped scrutiny at the time but that were exposed by bodycam video obtained by The Appeal, a nonprofit news organization. Other winners of this dubious distinction included former Boston Mayor Marty Walsh, retired Harvard Law School professor Alan Dershowitz and the aforementioned Tucker Carlson, who unleashed his mob to terrorize two freelance journalists in Maine.
• How to help save local news, July 28. Since 2004, some 2,100 newspapers have closed, leaving around 1,800 communities across the country bereft of coverage. It’s a disaster for democracy, and the situation is only growing worse. The Local Journalism Sustainability Act, a bipartisan proposal to provide indirect government assistance in the form of tax credits for subscribers, advertisers and publishers, could help. The bill is hardly perfect. Among other things, it would direct funds to corporate chains as well as to independent operators, thus rewarding owners who are hollowing out their papers. Nevertheless, the idea may well be worth trying. At year’s end, the legislation was in limbo, but it may be revived in early 2022.
• Democracy in crisis, Sept. 29. As summer turned to fall, the media began devoting some serious attention to a truly frightening development: the deterioration of the Republican Party into an authoritarian tool of Trump and Trumpism, ready to hand the presidency back to their leader in 2024 through a combination of antidemocratic tactics. These include the disenfranchisement of Black voters through partisan gerrymandering, the passage of new laws aimed at suppressing the vote and the handing of state electoral authority over to Trump loyalists. With polls showing that a majority of Republicans believe the 2020 election was stolen, it’s only going to get worse in the months ahead.
• Exposing Facebook’s depravity, Oct. 27. The social media giant’s role in subverting democracy in the United States and fomenting chaos and violence around the world is by now well understood, so it takes a lot to rise to the level of OMG news. Frances Haugen, though, created a sensation. The former Facebook executive leaked thousands of documents to the Securities and Exchange Commission and spoke out — at first anonymously, in The Wall Street Journal, and later on “60 Minutes” and before a congressional committee. Among other things, the documents showed that Facebook’s leaders were well aware of how much damage the service’s algorithmic amplification of conspiracy theories and hate speech was causing. By year’s end, lawyers for Rohingya refugees from Myanmar were using the documents to sue Facebook for $150 billion, claiming that Mark Zuckerberg and company had whipped up a campaign of rape and murder.
• COVID-19 and the new normal, Nov. 17. By late fall, the optimism of June and July had long since given way to the reality of delta. I wrote about my own experience of trying to live as normally as possible — volunteering at Northeastern University’s long-delayed 2020 commencement and taking the train for a reporting trip in New Haven. Now, of course, we are in the midst of omicron. The new variant may prove disastrous, or it may end up being mild enough that it’s just another blip on our seemingly endless pandemic journey. In any case, omicron was a reminder — as if we needed one — that boosters, masking and testing are not going away any time soon.
• How journalism is failing us, Dec. 7. Washington Post columnist Dana Milbank created a sensation when he reported the results of a content analysis he had commissioned. The numbers showed that coverage of President Joe Biden from August to November 2021 was just as negative, if not more so, than coverage of then-President Trump had been during the same four-month period a year earlier. Though some criticized the study’s methodology, it spoke to a very real problem: Too many elements of the media are continuing to cover Trump and the Republicans as legitimate political actors rather than as what they’ve become: malign forces attempting to subvert democracy. The challenge is to find ways to hold Biden to account while avoiding mindless “both sides” coverage and false equivalence.
A year ago at this time we may have felt a sense of optimism that proved to be at least partly unrealistic. Next year, we’ll have no excuses — we know that COVID-19, the economy and Trumpism will continue to present enormous challenges. I hope that, at the end of 2022, we can all say that we met those challenges successfully.
Finally, my thanks to GBH News for the privilege of having this platform and to you for reading. Best wishes to everyone for a great 2022.
Previously published at GBH News. It’s rather late in the game to ask whether hedge funds can be stopped from buying up every last one of our local newspapers. After all, about half of us are already stuck with a paper that is owned by, or is in debt to, the likes of Alden Global Capital (Tribune Publishing and MediaNews Group), Apollo Global Management (Gannett) and Chatham Asset Management (McClatchy).
Still, with Alden having now set its sights on Lee Enterprises, a chain that owns 77 daily newspapers in 26 states, we need to take steps aimed at preventing what is already a debacle from devolving into a catastrophe.
So what can be done? Steven Waldman, the co-founder of Report for America, which places young journalists in newsrooms, has some ideas. At the top of his list: redefining antitrust law.
“In general, antitrust law for the past three or four decades has focused on whether mergers would hurt consumers by raising prices or reducing competition,” Waldman wrote recently for the Washington Monthly. “But before that, antitrust regulators looked at mergers more broadly, including whether they would hurt communities. And that’s what needs to happen here.”
Waldman would also provide tax incentives for nonprofit organizations seeking to buy newspapers as well as tax credits to make it easier for news organizations to hire or retain journalists. That latter provision is part of the Build Back Better legislation, whose uncertain fate rests in the hands of Sens. Joe Manchin and Kyrsten Sinema.
“This will strengthen local news organizations of all shapes and sizes, making them less vulnerable to vultures,” Waldman argued. “The legislation could be a powerful antidote to the sickness spreading within local communities.” Trouble is, the tax credits would benefit the Aldens and the Gannetts just as much as they would the independently owned news organizations that are struggling for survival. Still, it seems like a step worth trying.
The problem with hedge funds owning newspapers is that such funds exist solely for the purpose of enriching their investors. Newspapers, of course, aren’t exactly lucrative. But they still have advertising and circulation revenues, even if they are much smaller than they were, say, 20 or 30 years ago. Cut expenses to the bone by laying off reporters and selling real estate, and you can squeeze out profits for the enrichment of the owners.
Alden is notorious for being the most avaricious of the bunch. Which is why shock waves ripped throughout the journalistic community last week when Rick Edmonds of the Poynter Institute reported that Alden — just months after feasting on Tribune’s nine major-market dailies — was making a bid for Lee, whose papers include the St. Louis Post-Dispatch, The Buffalo News and the Arizona Daily Star. (Julie Reynolds, an investigative reporter who has been dogging Alden for years, recently spoke about the hedge fund with Ellen Clegg and me as part of our podcast, “What Works: The Future of Local News,” at Northeastern University.)
Lee’s papers also include the Omaha World-Herald, and therein lies a sad story. The World-Herald was at one time the flagship of hometown boy Warren Buffett’s newspaper chain, which he began assembling in 2012. But despite Buffett’s self-proclaimed love for newspapers, he failed to invest in their future, cutting them repeatedly and eventually selling out to Lee. Now they face the possibility of a much worse fate.
Or not. Several days after Alden offered to buy Lee in a deal valued at $141 million, the Lee board of directors adopted a poison pill provison. As reported by Benjamin Mullin in The Wall Street Journal, Alden — which currently holds about 6% of Lee stock — would be forbidden for the next year from increasing its share above 10%. If nothing else, the move provides some time for other buyers to emerge. Perhaps the chain will be broken up, with some of Lee’s papers being acquired by local owners.
As Waldman suggests, there is nothing inevitable about local news being destroyed at the hands of venture capital. About two and a half years ago, I wrote about The Salt Lake Tribune, acquired from Alden by local interests and converted into a nonprofit news organization. Now, according to Lauren Gustus, the Tribune’s executive editor, the paper is adding staff and resources. “We celebrate 150 years this year and we are healthy,” she wrote in a message to readers recently. “We are sustainable in 2021, and we have no plans to return to a previously precarious position.”
Alden’s acquisition of Tribune Publishing (not The Salt Lake Tribune; I realize there are a lot of Tribunes to keep track of here) was an avoidable tragedy, made possible by a board that placed greed above the public interest. Since closing the deal, the hedge fund has been hacking away at Tribune newspapers that were already much diminished, including the Chicago Tribune, New York’s Daily News and the Hartford Courant.
Yet some good may come out of it, too: Stewart Bainum, a hotel magnate who had competed with Alden for Tribune, is starting a well-funded nonprofit news site, The Baltimore Banner, that will compete with Tribune’s Baltimore Sun. Maybe that will lead to similar efforts in other Tribune cities.
Meanwhile, Lee Enterprises’ newspapers are safe, at least for now. What will happen a year from now is anybody’s guess. But as long as the vulture can be kept outside the cave, there is hope for the millions of readers who depend on a Lee newspaper to stay informed about what’s happening in their community.
The Local Journalism Sustainability Act (LJSA), which I’ve written about rather obsessively here, is built upon the foundation of a three-legged stool: a tax write-off for individuals of up to $250 for subscription fees or donations to local news organizations; a tax credit for advertisers in local news outlets; and a payroll tax credit for publishers that hire or retain journalists.
Now the payroll credit has been carved out and added to the Build Back Better bill, which has passed the House and now faces uncertain prospects in the Senate. Marc Tracy reports in The New York Times that the provision would add up to nearly $1.7 billion over the next five years for newspapers, digital operations and broadcast operations.
Tracy notes — rather huffily, if I’m reading him accurately — that large newspapers like the Times would be excluded because they employ more than 1,500 in one location, but giant newspaper chains such as Gannett and those owned by Alden Global Capital would stand to benefit. As I’ve said before, I wish there were a way of restricting the benefits to independent owners; still, this strikes me as worth trying.
What I’m more concerned about is the political wisdom of adding just one part of the LJSA to Build Back Better, which — despite the optimism voiced by President Biden and other Democratic leaders — could be doomed given the seemingly endless demands made by Democratic Sens. Joe Manchin and Kyrsten Sinema.
There is at least some bipartisan support for the LJSA. Moreover, the tax write-off for subscriptions and donations strikes me as more interesting and creative than simply handing money to publishers for not laying people off. If Build Back Better passes, it will be with just 50 Democratic votes and Vice President Harris breaking the tie — and at that point it seems likely that the other two legs of the stool would disappear. If Build Back Better goes down to defeat, proponents of the LJSA will have to start from scratch.
Even so, the benefits that would be provided by the payroll tax credit are not insignificant. Art Cullen, editor of Iowa’s Storm Lake Times, tells The New York Times that the credit would mean $200,000 in just the first year for his struggling newspaper. “We’d be walking in tall cotton,” he’s quoted as saying. (Ellen Clegg and I spoke with Cullen recently on our podcast, What Works: The Future of Local News.)
Providing government assistance to journalism is fraught with concerns about the First Amendment and the need for an independent press. Yet journalism has always benefited from government help, starting with postal subsidies in the late 1700s. The LJSA is worth trying. I just hope that Democratic leaders haven’t outsmarted themselves by splitting up a bill that stood a decent chance of passing and grafting it onto a large package that they just can’t seem to get done.
The final act is about to be consummated in Warren Buffett’s disappointing dalliance with the newspaper business. Despite the legendary investor’s self-professed love for newspapers, he ran the newspapers he acquired starting in 2012 as a hopeless cause rather than investing in them as his fellow billionaires Jeff Bezos did with The Washington Post and John Henry did with The Boston Globe.
Buffett eventually sold his papers — including his hometown Omaha World-Herald — to Lee Enterprises. And on Monday we learned that the predatory hedge fund Alden Global Capital is now attempting to purchase Lee’s 90 daily newspapers, which are located in 26 states. The death watch has begun.
I wrote about Buffett’s track record as a newspaper owner in my book “The Return of the Moguls.” Here’s an excerpt.
When Buffett’s Berkshire Hathaway investment company purchased 63 newspapers from the Media General chain in 2012 for $142 million, the news was greeted with the hope that the legendary octogenarian might be just the person to show the way forward. Buffett bolstered his new holdings by extending loans to those papers totaling $445 million. It was a generous gesture with which Aaron Kushner and his investors, who also wanted the papers, could not compete. A year earlier Buffett had bought his hometown paper, the Omaha World-Herald, along with six other papers for $200 million. He already owned The Buffalo News. And in those pre-Bezos days, he held a substantial number of shares in The Washington Post Co. “Does Warren E. Buffett want to be a media mogul?” asked The New York Times.
Certainly Buffett had the right pedigree. Not only was he a brilliant financial thinker, but he had long loved newspapers and had been a close adviser to the Graham family at The Washington Post for many years. He even had a hand in winning a Pulitzer Prize: in 1973, when he was the owner of the Omaha Sun, he helped his reporters investigate a local charity by finding documents, providing financial analysis, and even assisting with the writing. Katharine Graham praised Buffett fulsomely in her autobiography, saying that he became a trusted confidant after he invested in the Washington Post Co. “By the spring of 1974,” she wrote, “Warren was sending me a constant flow of helpful memos with advice, and occasionally alerting me to problems of which I was unaware.”
Yet Buffett, astute financier that he is, expressed skepticism about prospects for the newspaper business after it entered its long decline. In 2009, for instance, he said he had no interest in purchasing papers, because their financial outlook was so grim. “For most newspapers in the United States, we would not buy them at any price,” he said. “They have the possibility of going to just unending losses.” And though he later reversed himself, his acquisition strategy gravitated toward papers of the type that still do reasonably well: those in medium-sized markets where the local paper is the principal source of regional and community news and where competition from the internet is less a factor than it is in large cities. Buffett’s papers carry little debt and are profitable. In the spring of 2016, though, he admitted that the picture was continuing to darken for the newspaper business and that he was no closer to finding a way out than anyone else.
“We haven’t cracked the code yet,” he told USA Today. “Circulation continues to decline at a significant pace, advertising at an even faster pace. The easy cutting has taken place. There’s no indication that anyone besides the national papers has found a way.” He added that even though all of his papers were making money (at that time he was up to 32 dailies and 47 weeklies), that might not be the case in future years. “If you have a problem in five years, you have a problem now,” he said. Buffett doubled down on those remarks in early 2017, telling CNBC that The New York Times, The Wall Street Journal, and possibly The Washington Post were the only newspapers he believed had an “assured future,” explaining, “They have developed an online presence that people will pay for.”
Less than two months later, the hammer came down at BH Media, the company Buffett had set up to manage his newspapers. BH Media announced the termination of 289 positions throughout the chain, including the elimination of 108 vacant jobs. The BH Media president and chief executive officer, Terry Kroeger, told the Omaha World-Herald that Buffett had been informed of the reductions but that “his opinion was not sought or offered,” in keeping with Buffett’s hands-off investment philosophy. Kroeger blamed the papers’ declining revenue on changes in retail advertising, and especially on the move to online shopping — an irony given how the most successful of the new breed of newspaper owners, Jeff Bezos, made his money. Buffett’s World-Herald did not suffer any cuts at that time. But then, in May, BH Media reduced the size of the Omaha paper and eliminated three jobs, according to a memo to the staff from the executive editor, Melissa Matczak.
For a self-confessed newspaper fan whose net worth was roughly the same as that of Bezos (more than $60 billion apiece in mid-2016), Buffett’s role in helping to figure out the future of journalism might be considered disappointingly modest. Perhaps it would be too much to expect someone in his mid-80s to dedicate himself to figuring out the future of the newspapers he had acquired. But he was ideally positioned to bring in the sorts of minds who might apply themselves to the task of saving smaller papers in much the same way that Bezos and Henry were attempting to reinvent their much larger properties. Surely Buffett understands as much as anyone that readers and advertisers will put up with an ever-diminishing paper for only so long before an irreversible downward spiral sets in.