Nantucket, where The Inquirer & Mirror is once again locally owned. Photo (cc) 2007 by Michael Galvin.
From time to time I’ve taken note of rare instances when Gannett has sold some of its 1,000 or so papers to local ownership. In Massachusetts, for example, The Inquirer & Mirror of Nantucket was acquired last fall by a group headed by the editor and a local businessman.
Kristen Hare of Poynter asked Gannett for some numbers, it turns out that the chain has sold 24 papers to community interests. (Be sure not to miss the correction. As you’ll see, Gannett can’t even keep track of how many papers it owns.)
Not that there’s any benevolent motive at work here. Gannett is going to do what’s best for its bottom line, and a few isolated weeklies don’t fit with its strategy of regional groups, dailies and stories shared across papers regardless of whether they have any local interest.
Just recently, Gannett shut down two weeklies west of Boston — the Marlborough Enterprise and the Hudson Sun. Maybe there weren’t any local buyers available. But those towns are also covered by Gannett’s MetroWest Daily News, so there was an incentive not to empower any possible competitors.
Writing for the Local News Initiative at Northwestern University, Mark Jacob speculates that the hedge fund Alden Global Initiative might sell off some of the nine major-market dailies it acquired when it gobbled up Tribune Publishing earlier this year. I suppose anything is possible, but that seemed to fly out the window when Baltimore hotel magnate Stewart Bainum’s efforts to buy Tribune fell short. Bainum planned to break up the chain, starting with The Baltimore Sun, which he wanted to donate to a nonprofit. In the end, though, Alden’s offer prevailed, even though it was loaded with undisclosed debt.
Jacob also profiles The Berkshire Eagle of Pittsfield, a rare instance of a newspaper that Alden was willing to sell to local interests, and The New Bedford Light, launched despite Gannett’s refusal to sell The Standard-Times.
And then there is this odd observation by Jacob:
In some ways, large chains can be beneficial for local news consumers. They often bring website expertise, technical support and consistent business practices. And they may have a greater ability to recruit talent.
No. Some chains are better than others, but all of them are dedicated to the proposition that newspapers exist mainly so that the owners can squeeze out profits that could otherwise be invested in news and technology. Even in terms of digital publishing, I have rarely encountered an independent news website that is as clunky and intrusive as a typical chain site.
Can government help solve the local news crisis? The notion sounds absurd, even dangerous. You get what you pay for, and if government officials are funneling money to media outlets, then it’s not unreasonable to expect that they’ll demand sticky-sweet favorable coverage in return.
Yet the situation is so dire that once-unthinkable ideas need to be on the table. Since 2004, some 2,100 newspapers have closed, leaving about 1,800 communities across the country bereft of coverage. About 30,000 newsroom jobs disappeared between 2008 and 2020. The consequences range from the potential for increased corruption to a decline in voter turnout for local elections.
Now federal legislation long in the making may finally be ready to move ahead. Believe it or not, the bill is bipartisan. It also manages to avoid the entangling alliances that would endanger journalistic independence. That’s because the Local Journalism Sustainability Act, introduced in the Senate last week and in the House a month earlier, relies on tax credits rather than direct government assistance.
“This clever, bipartisan bill would provide more help for local news than any time in about a century, yet it’s done in a very First-Amendment-friendly way,” writes Steven Waldman, the co-founder of the Rebuild Local News Coalition as well as the co-founder and president of Report for America. (Disclosure: Report for America, which places young reporters at news organizations around the country, is part of the GroundTruth Project, affiliated with GBH in Boston.)
So how would the bill work? Essentially, it would provide three tax credits that would expire after five years, giving media outlets some runway to move toward long-term sustainability. I am oversimplying, but here is the rough outline:
• News consumers would be able to write off $250 a year that they spend on subscriptions or on donations to nonprofit news organizations.
• News organizations would receive tax benefits for hiring or retaining journalists.
• Local small businesses would receive tax credits for advertising in local newspapers and news websites and on television and radio stations.
The benefits would be restricted to small news organizations, defined as those with 750 employees or fewer in the House bill or fewer than 1,000 in the Senate bill.
At a time when Congress seems incapable of doing anything, some version of the bill appears to stand a good chance of passing. After all, elected officials, regardless of party or ideology, like to be covered by the hometown press, and the bill would help ensure that there will continue to bea press. As of Tuesday, there were 32 co-sponsors in the House — 25 Democrats and 7 Republicans. Because the Senate version was just introduced, the only co-sponsors so far are the three Democrats who introduced it — Maria Cantwell of Washington state, Ron Wyden of Oregon and Mark Kelly of Arizona.
Among the all-Democratic Massachusetts delegation, Sen. Ed Markey will support the bill and has asked to be a co-sponsor, says Markey spokeswoman Giselle Barry. Sen. Elizabeth Warren is studying the legislation and has not yet stated a position, according to Warren spokeswoman Nora Keefe. On the House side, Reps. Jim McGovern and Seth Moulton are co-sponsors, and Mary Rose Tarpey, a spokeswoman for Rep. Stephen Lynch, says that Lynch will also be a co-sponsor, as he was during the previous session.
Government assistance for news is not new. During the early days of the republic, postal subsidies were the foundation upon which the distribution system for newspapers and magazines was built. Today, nonprofit news organizations ranging from hyperlocal websites to public broadcasters benefit from tax incentives that allow their donors to write off the money they give and that exempts the media outlets themselves from having to pay taxes.
Given the catastrophic state in which journalism finds itself, some activists and scholars are calling for more direct funding of news. For instance, Victor Pickard, a scholar at Penn’s Annenberg School, advocates much higher government spending on public media. Longtime media reformer Robert McChesney has talked about giving as much as $35 billion over five years to elected citizens councils that would fund local news and underwrite startups.
But there are dangers in such approaches. In Pennsylvania, for instance, the Republican-dominated legislature cut off $750,000 to the state’s seven public radio and television stations after one of them, WITF Radio of Harrisburg, began calling out any elected official who continued to challenge the validity of President Joe Biden’s electoral victory.
Philadelphia Inquirer columnist Will Bunch, while conceding there was no evidence of a direct cause-and-effect over what was admittedly a small amount of funding, wrote in his weekly newsletter that the action “shows the enormous peril of government dollars for journalism, even as a partial solution. In an era when a growing number of elected officials are waging war on the truth, from election results to coronavirus vaccines, would journalists be forced to choose between an important story or their survival?”
By contrast, the federal bill under consideration avoids those problems by putting as much distance as possible between elected officials and the aid that news organizations would receive.
My one reservation about the bill is that chain-owned newspapers would benefit along with independent projects. That said, the Rebuild Local News Coalition, whose members represent more than 3,000 newsrooms, includes some of the most public-spirited organizations that are working on these problems, such as LION (Local Independent Online News) Publishers, the Lenfest Institute and the Solutions Journalism Network.
Perhaps the problem of chain ownership could be addressed, as Waldman proposes, by giving tax breaks to the likes of Gannett and Alden Global Capital if they sell their papers to local nonprofits and public benefit corporations. I would also suggest tax penalties if they decline to do so. Corporate ownership is killing local news just as surely as technological change and the aftermath of the COVID pandemic, and we need to get the publicly traded corporations and hedge funds out.
At a time when political and cultural polarization at the national level is tearing us apart, local news can help encourage the kind of civic engagement we need to rebuild community. But that can’t happen if the newspaper has gone out of business or is on life support, and if nothing else has come along to take its place.
Fundamentally, what’s at issue is that the advertising model that paid for journalism until recent years has collapsed. Publishers need to find a way forward, whether through reader revenue, nonprofit funding, paid events or even starting a bar and wedding venue next to the newsroom, as The Big Bend Sentinel in West Texas did.
The Local Journalism Sustainability Act will help sustain local news while we search for a workable model that doesn’t rely on advertising. After 15 years of declining revenues and dying newspapers, it may be our last chance to get it right.
Axios has a story on “journalism’s two Americas” — the thriving national media and struggling local news outlets, mainly newspapers. “The disparate fortunes skew what gets covered,” write Sara Fischer and Nicholas Johnston, “elevating big national political stories at the expense of local, community-focused news.”
The data they present isn’t new, but it’s striking nevertheless. Local reporters earn an average annual salary of $49,000, compared to more than $65,000 for national reporters. Of course, many of those national jobs are in the ultra-high-cost New York era, which means the disparity may not be quite as great as those two numbers suggest. Still, the national media are growing and hiring, while local newspapers — most of them owned by corporate chains and hedge funds — continue to eliminate jobs.
Fischer and Johnston note that CNN is hiring 450 people for its new CNN+ streaming service. And Fischer reported just a little while ago that NBC is “adding hundreds of jobs to its digital organization,” mainly for news-oriented positions.
Not all news on the community journalism front is bad, though. The apocalyptic stories about what’s taking place at the grassroots invariably focus on chains owned by the likes of Gannett and Alden Global Capital. By contrast, entrepreneurs are launching for-profit and nonprofit digital startups at a dizzying rate. Chris Krewson, the executive director of LION (Local Independent Online News) Publishers writes:
Research shows new newsrooms are launching fast, 50 a year for the last five years. They’re for-profit, non-profit, public-benefit corporations, and LLCs; they’re a husband-and-wife team covering a small town; they’re a staff of dozens holding politicians to account at the statewide level….
They’re not replacing the newspaper. They don’t need to. This nascent industry has the potential to grow beyond the limitations of newspapers, to truly reflect and serve communities large and small, rural, urban, Black, Brown, Indigenous, queer… and on and on. We just have to stop thinking about saving the unsaveable and build businesses that serve the needs of communities first. In fact, what these publications are starting to offer is just as good, if not better, than the legacies they’re increasingly supplanting.
I’ve been tracking such projects since the late ’00s. From New Haven to San Diego, from Burlington, Vermont, to Batavia, New York, community journalists step up when there’s a market failure on the part of the local legacy newspaper. Ellen Clegg and I are following similar projects across the country.
There’s no question that these are tough times for local news. But there are plenty of reasons to be optimistic as well.
More downsizing at The Sun of Lowell, part of Alden Global Capital’s MediaNews Group chain. Kris arrived at The Sun 42 years ago as a Northeastern co-op student. People like him are the heart and backbone of local journalism.
Robert’s departure follows the layoff of @kplowellsun, the Sun’s managing editor/nights. Alden Global Capital continues with its destruction of a quirky, vital newspaper. Kris’ farewell column: https://t.co/pJgdxMLCuChttps://t.co/qpsH04CtoV
— Dan Kennedy is on Threads (@dankennedy_nu) July 17, 2021
The public radio show “On the Media” offered a terrific special hour-long broadcast over the weekend — a deeply reported piece on the Capital Gazette in Annapolis, Maryland, where five journalists were killed in a mass shooting three years ago today.
The story follows the newsroom through the shock of the shooting and the newspaper’s halting recovery. Sadly, as the last part of the hour unfolds, we learn that the journalists overcame the worst horror imaginable only to be done in by their corporate owner, Tribune Publishing. In the closing minutes, things go from bad to worse, as the hedge fund Alden Global Capital purchases Tribune.
By the way, what “On the Media” ran was a compressed version of a two-hour series that was part of the NPR podcast “Embedded,” which had not been on my radar until now. Outstanding and important work.
Patrick Soon-Shiong. Photo (cc) 2019 by the World Economic Forum.
Billionaire Los Angeles Times owner Patrick Soon-Shiong evaded the question when CNN’s Brian Stelter asked him on the new “Reliable Sources” podcast why he didn’t intervene to prevent Alden Global Media from acquiring Tribune Publishing.
Here’s the exchange:
Stelter: Patrick, there are people who want to know why, with the Alden deal, you didn’t step in. This is the deal where Tribune was being taken over by the hedge fund Alden Global Capital. You are the biggest outside shareholder. You could have stepped in. There’s questions about why you decided to abstain, why you decided not to stop that from happening. Can you share with us why?
Soon-Shiong: Well, look, you know, I was a passive shareholder, and it was really important for the board to do what it has to do with regard to the rest of the Tribune holdings. I’ve got my hands full and frankly, really committed to the LA Times and San Diego Union-Tribune.
A quick recap: Alden, the worst newspaper owner on the planet, paid $633 million last month to boost its share of Tribune’s nine major-market dailies from 32% to 100%. Soon-Shiong, who held 25% of Tribune’s shares, could have just said no and given Baltimore hotel magnate and philanthropist Stewart Bainum more time to pull together his own deal.
Instead, Soon-Shiong abstained, and he did it in such a way that the deal was allowed to go through. That is, if he had formally abstained, the sale would have been stopped.
And now Alden is decimating Tribune’s newspapers, just as it has with its 100-paper MediaNews Group chain.
Could Alden Global Capital’s acquisition of Tribune Publishing be headed for a do-over? Julie Reynolds, who’s been reporting on the hedge fund’s evisceration of newspapers for years, has written a fascinating story for the Nieman Journalism Lab suggesting that the $633 million deal may have been illegal.
Alden, which already owned 32% of Tribune’s papers, pledged to pay $375 million in cash in order to bring its share up to 100%. But Reynolds reports that Alden didn’t actually have the cash, a fact that may have been known only to the three members of Tribune’s board who were affiliated with the hedge fund.
As soon as the transaction was consummated, Alden forced the papers to borrow about $300 million. That included $60 million from Alden’s other newspaper chain, MediaNews Group, at an eye-popping interest rate of 13%. As everyone predicted, Alden has gone on a cost-cutting rampage, offering buyouts throughout the chain.
Nieman Foundation curator Ann Marie Lipinski, a former editor of Tribune’s largest paper, the Chicago Tribune, tweeted, “The scale of talent leaving the Chicago Tribune is staggering.”
The scale of talent leaving the Chicago Tribune is staggering. Combined with January buyouts, a hedge fund’s takeover is driving out irreplaceable experience, Pulitzer winners among them. Incalculable loss for Chicago. If you live in a city with a local paper, take care of it. https://t.co/C47durRnbY
Reynolds also reports that the full Tribune board may have been left in the dark about a private meeting that Tribune board member and Alden founder Randall Smith had with Baltimore hotel magnate Stewart Bainum last year.
You may recall that Bainum had initially worked out an agreement under which Alden would buy Tribune’s nine major-market dailies and then sell one of them, The Baltimore Sun, to Bainum, who planned to donate it to a nonprofit organization. After Bainum concluded that Alden was trying to gouge him, he tried to put together a bid for the entire chain. Most if not all of the papers would have been spun off to local buyers. But he was never able to put together a firm offer, and the board went with Alden instead. Alden is keeping all nine papers, including the Sun.
As Reynolds notes, the Tribune board spurned Bainum’s higher offer because the financing was not in place — and ignored the reality that Alden’s wasn’t in place, either. She writes:
Given the healthy profits Tribune has generated over the last several quarters, the cuts are there for just one reason: to achieve higher margins for Alden. Randall Smith will get richer while communities served by Tribune are starved of the information they need.
If Reynolds is correct in asserting that laws were broken in order to pave the way for Alden’s acquisition of Tribune, then the punishment ought to be more than a fine and a slap on the wrist. The sale should be voided and the Tribune board should be forced to vote again.
Maybe this time Patrick Soon-Shiong, the billionaire owner of the Los Angeles Times, can be persuaded to stop Alden. As a 25% owner of Tribune before the sale, Soon-Shiong could have said no. Instead, he abstained, and did it in a manner that allowed the transaction to go through.
Just before Thanksgiving last year, Melissa Milios Davis was contacted by Jerry Healey, the co-owner — along with his wife, Ann Healey — of Colorado Community Media, which publishes 24 weekly and monthly newspapers in the Denver suburbs.
The Healeys were approaching retirement and looking to sell, and they were hoping to avoid turning over their life’s work to a corporate chain owner or a hedge fund. Milios Davis, vice president for strategic communications and informed communities at the Gates Family Foundation, serves on the executive committee of the Colorado Media Project, which has been seeking ways forward for local news since 2018.
That encounter, Milios Davis said at a recent webinar (you can watch it here; background information here), led to the sale last month of the Healeys’ newspapers to a new entity whose majority owner will be The Colorado Sun, a startup digital news operation that’s run as a public benefit corporation. That means the 24 papers, like the Sun, will not be organized to enrich its owners; any profits they earn will be rolled back into news coverage and other operations.
“These are still profit-making enterprises. It’s a business,” said Milios Davis, adding it would have been a “huge loss” if the papers had fallen into the wrong hands.
Also speaking at the webinar, organized by the Media Enterprise Design Lab at the University of Colorado Boulder, were Lillian Ruiz, co-founder and managing director of the National Trust for Local News, and Larry Ryckman, editor and co-founder of the Sun. The moderator was Nathan Schneider, an assistant professor of media studies at the university.
According a recent article about the deal by Corey Hutchins of Colorado College, the papers will be owned by the newly formed Colorado News Conservancy, which in turn is co-owned by the National Trust for Local News and the Sun. Hutchins reported that the 40 employees who worked for the Healeys, about half of them journalists, would keep their jobs.
The conservancy is currently seeking a publisher, Ruiz said at the webinar, and has invested a considerable amount of attention in the process. “We didn’t want to create just a replication of who have we had some handshakes with over a highball,” she said.
The Sun itself, which was founded after the meltdown of The Denver Post under the ownership of the hedge fund Alden Global Capital, is continuing to grow, said Ryckman — from a staff of about 10 when I wrote about the Sun for the Nieman Journalism Lab last fall to 15 today, with more on the way. He described the chance to save the community newspapers as something that was too important to pass up.
“At least on the Sun side, this came together pretty quickly,” he said. “This absolutely was a cause that was near and dear to our hearts…. We know who’s first in line when it comes to buying newspapers these days, and no one wants to see that happen.”
What helped jump-start the deal, said Milios Davis, was a study that the Colorado Media Project conducted several years ago in partnership with the Colorado Press Association. Among the findings: the number of journalists covering local news had been cut in half over the previous decade, in line with what was taking place nationally; and that of 151 newspapers they could identify, 93 were still locally owned.
“We saw on the horizon that a lot of these were … older owners” who lacked a succession plan, she said, explaining that there were 44 in that category. “We were looking at this as a tidal wave that would slowly crash on the shores,” which led to conversations about how to help them transition to new local ownership.
And then the Healeys came along.
One of the most important takeaways from what is happening in Colorado is that local news can still be run on a sustainable basis, and that corporate control and the gutting of newsrooms are not inevitable. As I wrote a few weeks ago, I would love to see the Colorado story replicated across the country. Ruiz said the exact model being used in Colorado might be unique to that area. But she added that her organization is looking at what might work in other parts of the country — especially in communities of color.
So how do we wrest control of local news away from chain owners? Report for America co-founder Steven Waldman, who’s been everywhere lately (it also turns out that he’s a co-founder of Ruiz’s organization), wrote an op-ed piece for the Los Angeles Times calling for tax breaks for newspaper owners who sell to nonprofits or public benefit corporations.
That would provide an incentive for the likes of Alden and Gannett to take their money and go home. I would add another incentive: tax penalties to be imposed on for-profit owners of newspaper chains of a certain size that are not owned locally.
Communities deserve a chance to take charge of their news and information. Three years after Alden all but destroyed The Denver Post, we’re starting to see a renaissance fueled by a new media venture and an old one that’s been given new life.
Alden Global Capital is wasting no time in taking a chainsaw to its newly acquired newspapers. NPR media reporter David Folkenflik tweeted a thread that contains some horrifying details about what the hedge fund has in store for Tribune Publishing:
$60MM of that debt carries a 13% rate – it was borrowed from Media News – Alden Global's other newspaper division.
h/t to @benyt for initial tweet about NYDNews & memo
— David Folkenflik (@davidfolkenflik) May 26, 2021
How about that? A $60 million loan with a 13% interest rate that Alden will pay to itself.
The cuts, by the way, will come on top of massive downsizing that took place in 2020, when Alden was a mere minority shareholder. Tribune’s Chicago Tribune reports:
Last year, Tribune Publishing employment fell by 30%, dropping from 4,114 employees at the end of 2019 to 2,865 employees at the end of 2020, according to the company’s annual reports. The company had a total of 896 newsroom employees across its eight markets entering this year.
Finally, the New York Post’s Keith Kelly writes that Los Angeles Times owner Patrick Soon-Shiong, who was in a better position than anyone to stop the sale of Tribune to Alden, is “taking a lot of heat” for not voting against it — or at least for not abstaining in a way that would have stopped the deal.
Kelly quotes an unnamed source who calls Soon-Shiong “second most despised man in newspapers today behind Heath Freeman,” Alden’s president. Nice quote. I wonder who said it?
The Chicago Tribune Tower — no longer the home of its namesake newspaper, which is now falling into the hands of our worst newspaper owner. Photo (cc) 2013 by R Boed.
It was, in a sense, the perfect ending to the disastrous $630 million sale of Tribune Publishing to the hedge fund Alden Global Capital. After Tribune’s board voted earlier today to turn over its nine major-market dailies to the worst newspaper owner in the country, it wasn’t entirely clear that the vote was valid. And I’m guessing that the Newspaper Guild, which has been fighting the sale, will file a challenge. Elahe Izadi and Sarah Ellison of The Washington Post explain:
But participants alsoremained uncertain well into Friday afternoonabout the potential impact of Patrick Soon-Shiong’s surprise announcement, made via a spokeswoman, that he “abstained” from the vote. The California biotech billionaire owns the Los Angeles Times — which is unaffected by the sale — and about one-quarter of Tribune shares, meaning he had enough votes to torpedo the takeover.
According to Tribune Publishing proxy filed on April 20 with the Securities and Exchange Commission, an “abstain” vote would be counted as “against” the merger. Yet it appears that Soon-Shiong ultimately did not cast his ballots in a way that would have stopped the Alden sale. Unnamed Tribune Publishing officials told the Chicago Tribune that the proxy ballots registered to Soon-Shiong were submitted without the “abstain” box checked, and that his votes were counted as “yes” for the merger.
Had he not voted at all, his silence would have been recorded as a vote “against” the merger. But ballot submitted without any boxes checked at all were understood as endorsing the board’s recommendation to approve the merger.
David Folkenflik of NPR has a comprehensive account of what went down today and what it means for the future.
There are two villains here in the looming destruction of some of our most important newspapers, including the Chicago Tribune, The Baltimore Sun and, closer to home, the Hartford Courant. One is Soon-Shiong. I realize he has his hands full with the LA Times, and I’m glad that he appears to be recommitted to that paper after rumors circulated earlier this year that he was looking to sell. But all he had to do today was vote “no,” buying more time for another bidder to emerge. Instead, Soon-Shiong will walk away with $150 million.
The other villain is a Swiss billionaire named Hansjörg Wyss. At one point, Baltimore hotel magnate Stewart Bainum put together a $680 million bid that was largely aimed at breaking up the chain and finding local buyers. Wyss wanted the Chicago Tribune — but reportedly decided against it once he learned that its finances were in worse shape than he’d been led to believe. He also reportedly lost interest after his advisers convinced him that, no, the Trib couldn’t be transformed into a national paper in league with The New York Times or the Post. With a net worth of $6.4 billion, though, Wyss easily could have sucked it up rather than walking away.
I’m not going to single out mega-billionaire Jeff Bezos as a villain, even though I recently argued that he should add Tribune to his ownership of the Post. It would have been nice, but there was never a hint that he had any interest.
And here’s a really terrible wrinkle. Earlier this year, Alden had agreed to buy Tribune and then sell The Baltimore Sun to Bainum, who in turn planned to donate it to a nonprofit. Bainum decided to try to buy the entire chain after concluding that Alden was trying to chisel him on the terms of the deal. Now Alden will keep all nine Tribune metros plus some pretty vital smaller papers, such as the Capital Gazette of Annapolis, Maryland.
Alden will soon control two newspaper chains. In addition to Tribune, Alden owns MediaNews Group (also known as Digital First Media), whose 100 or so papers include The Denver Post, the Orange County Register in Southern California and, in Massachusetts, The Sun of Lowell, the Sentinel & Enterprise of Fitchburg and the Boston Herald. Its papers are mere shadows of their former selves, barely able to cover the communities they purportedly serve.
If there’s a bright spot — and there is — it’s that entrepreneurial journalists move in where there is market failure. Former Denver Post journalists are now operating The Colorado Sun, a digital operation that recently acquired a chain of 24 regional newspapers around Denver. In Northern California, two former Alden journalists are now running a news co-op called The Mendocino Voice. And in Baltimore, Bainum says he’s going to investigate launching a nonprofit alternative to the Sun.
This may be the darkest day in the history of American newspapers. My hope is that, five years from now, we’ll look back and see that something good came out of it.
