The latest bad idea for chain newspapers: Robot reporting on real estate

Tom Breen of the New Haven Independent covers real-estate transactions the old-fashioned way. Photos (cc) 2021 by Dan Kennedy.

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.

A note Breen left behind asking the resident to call him. (Phone number removed.)

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.

Bad sign: Here’s how Breen and I were greeted at one foreclosed-upon property. (Names removed.)

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.

Hedge fund owner, its feelings apparently hurt, cuts ties with Report for America

Report for America photojournalist Olivia Sun on assignment with The Colorado Sun. Photo (cc) 2021 by Dan Kennedy.

In April 2020, I questioned whether Report for America should be placing journalists at newspapers owned by cost-cutting corporate chains.

RFA is a program that enables news organizations to hire young journalists for about two years at a fraction of the cost, with a grant from RFA and additional fundraising covering 75%. The dilemma is that though these news organizations clearly need help, and the communities they cover benefit from that help, there is at least a theoretical chance that their chain owners will take it as an incentive not to hire someone at full cost.

At the time, RFA co-founder Steven Waldman defended those placements, saying in part that “half of our placements are in nonprofit, and others are in locally owned commercial entities. But we do indeed have some placements in newspapers that are owned by chains. Our primary standard is: Will this help the community?” (His full answer, as well as comments from the other co-founder, Charles Sennott, are here.)

Now Report for America has encountered an unexpected hazard to doing business with chain owners. McClatchy, owned by Chatham Asset Management, a hedge fund, has decided not to apply for any RFA journalists next year. The apparent reason, according to Feven Merid at the Columbia Journalism Review: Waldman hurt their feelings in an op-ed piece he wrote for the Los Angeles Times earlier this year. Merid writes:

Sources tell CJR that McClatchy’s decision came in response to Waldman’s hedge-fund criticism. Kristin Roberts, McClatchy’s senior vice president of news, would not confirm the company’s plans, and did not respond to questions concerning the company’s reaction to Waldman’s hedge-fund critiques.

McClatchy owns several dozen papers in 14 states, including important outlets like the Miami Herald, The Sacramento Bee and The News & Observer of Raleigh, North Carolina. The chain staggered under piles of debt for many years before finally collapsing into bankruptcy a few years ago. Chatham bailed them out and has thus far proved to be a more benevolent owner than, say, Alden Global Capital, the most notorious of the hedge-fund owners. Indeed, Waldman’s op-ed specifically mentioned Alden.

But if Merid’s sources are correct, then it seems that Chatham executives have a bad case of rabbit ears.

Waldman’s op-ed, headlined “How to Stop Hedge Funds from Wrecking Local News,” calls on Washington to take steps that would encourage chain-owned newspapers to divest their holdings and make it easier for independent local owners to step up. He wrote:

It could offer incentives for owners to sell these papers to local interests by waiving capital gains taxes if the acquirer is a local nonprofit organization or public benefit corporation. It could give a time-limited payroll tax break to the acquiring organizations. Congress could also, through the Small Business Administration or Commerce Department, provide loan guarantees for low-interest financing for such transitions or special tax credits, similar to those available to businesses operating in enterprise zones.

Antitrust action to break up the chains could be in order as well, according to Waldman.

At the moment, 31 RFA journalists work at 21 McClatchy news outlets. The chain’s decision to spurn future RFA journalists won’t hurt the prospects of young reporters and photographers, since there will no doubt be plenty of other newsrooms that participate. But it will hurt the communities that those papers serve unless the chain suddenly decides to go on a hiring spree.

It’s an absurd situation, and I hope the folks at Chatham and McClatchy come to their senses.

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Can Gannett and McClatchy’s joint venture reinvigorate national advertising?

At root, the debate over whether Google and Facebook should pay for news is about how their duopoly destroyed the value of digital advertising and then kept most of the revenues for themselves.

News, which is expensive, can’t survive on the pennies brought in by Google’s programmatic ads. That’s why there’s been so much emphasis in recent years on reader revenue — an emphasis that, at least in a few places, is starting to pay off.

Still, it would surely be a positive if news organizations could develop a revenue stream other than digital subscriptions. When readers are empowered, they expect their preferences and prejudices to be catered to. You need a balance. That’s why it’s interesting to see Axios’ recent report that Gannett and McClatchy will combine forces to sell national advertising for their hundreds of local and regional papers.

Can Gannett and McClatchy’s efforts drive up the price of digital ads? That’s the real issue, and without that their effort is not going to have much of an effect. Of course, it also does nothing to boost ad sales at the local level, which have been on the decline for years. Yes, local businesses have gravitated to Facebook just like everyone else. But local newspapers aren’t exactly known for being aggressive and creative about selling to the local hair salons, pizza restaurants and funeral homes, either. It can be done. Just ask Howard Owens, publisher of The Batavian in western New York state.

The partnership shows why I differentiate between Gannett and Alden Global Capital, even though their nuke-the-newsroom approach to the bottom line looks very much the same on the ground. Alden, by all appearances, is trying to squeeze as much money as it can out of the newspapers it’s killing and then get out. Gannett, on the other hand, is hoping to build a community news chain that can be sustainable in the long run.

Gannett’s biggest mistake, carried over from its predecessor company, GateHouse Media, is that its executives think they can build for the future while failing to provide enough journalism to retain readers. No matter how smart your business model, it’s not going to work if all you’re offering your audience is a shell.

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Should Report for America send journalists to chain-owned newspapers?

How much support do newspapers owned by cost-cutting corporate chains deserve? It’s a dilemma. On the one hand, the people who live in communities served by those papers need reliable news and information. On the other hand, subsidizing them with money and resources could be considered a reward for bad behavior.

Last week Report for America, or RFA, announced that it would send 225 journalists to news organizations in 46 states and Puerto Rico during 2020-’21. With local news in crisis even before the COVID-19 pandemic, it was a welcome piece of good news. Most of the organizations that will host these young journalists are either independent or part of small chains, and they include a sizable number of public broadcasters, nonprofit start-ups, the Associated Press and the like. Locally, The Bay State Banner will be getting a reporter.

But in looking over the list, I also noticed a substantial number of newspapers that are part of corporate chains. By my count, 15 papers are part of McClatchy, which recently declared bankruptcy after staggering under unsupportable debt for many years. Twelve are part of Gannett, recently merged with GateHouse Media; both chains are notorious for slashing their newsrooms, and not just since COVID-19 reared its head. One reporter is even going to Cleveland.com, the website of The Plain Dealer and the scene of a recent union-busting effort on the part of Advance Publications.

As I said, it’s a dilemma. If you attempt to punish chain owners for squeezing out revenues at the expense of newsroom jobs, you wind up hurting communities.

I contacted Report for America co-founders Steven Waldman, who serves as RFA’s president, and Charles Sennott, who’s the chief executive officer and editor of The GroundTruth Project, of which RFA is a part. Their answers have been lightly edited. First Waldman:

My general answer is: Yes, half of our placements are in nonprofit, and others are in locally owned commercial entities. But we do indeed have some placements in newspapers that are owned by chains. Our primary standard is: Will this help the community? So we have on occasion accepted applications from newspapers with the problems you mentioned if we were convinced that they would use the reporter to better serve their readers. If we can be a positive force in helping those newspapers tip more in the direction of great journalism, we view that as a real positive step…. [Ellipses Waldman’s.] In effect, we’re creating hybrid nonprofit/for-profit models that provide even better local journalismBy the way, we have always had newspapers like that in the program, as part of the mix. That’s not new.

Now Sennott:

One of the stronger papers in our original Report for America class of 2018 was the Lexington Herald-Leader, a McClatchy paper in Kentucky. They pitched us on reopening the Pikeville Bureau in the heart of coal country in Eastern Kentucky, a bureau they had been forced to close 10 years earlier. They felt they were not serving well the community there. We placed RFA corps member Will Wright there and he became one of our true stars, breaking a story on a water crisis in which tens of thousands of residents did not have access to clean drinking water. His reporting turned a spotlight on this issue and helped the community force the county officials to repair the work and restore the access to clean drinking water. I went to Pikeville to work alongside Will Wright on this story and saw his incredible impact in that community with my own eyes. That is what we care about, serving the communities in these under-covered corners of America. And that’s why we have always been proud of our work with the Lexington Herald and why we did not rule out McClatchy as a place for us to look for RFA host newsroom partnerships, even if it is a chain that is going through hard economic times.

We did an enterprise project with Will Wright and two other reporters in rural Appalachia. Here is a link to the project, which was also featured on GroundTruth, as home of RFA:

https://thegroundtruthproject.org/projects/stirring-the-waters/

Also, we got news today of a full-page ad was taken out by Republicans and Democrats thanking McClatchy for its service to Kentucky.

And adding a poetic new chapter to the story, Will Wright has been accepted by The New York Times for its very competitive fellowship. And no, we are not leaving them high and dry. In this new class, we will have three journalists (two reporters and one photographer) at the Lexington Herald.

Sending an RFA journalist to a Gannett paper isn’t going to lead directly to a layoff. More public-accountability coverage is in everyone’s interests. And the chains, unfortunately, have a monopoly in many parts of the country, so it’s not like RFA could send someone to another news organization in that community.

Overall, I think RFA is doing the right thing — even if it makes me a bit queasy.

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GateHouse to partner with Google News on digital subscriptions

GateHouse Media will partner with Google News on a digital-subscriptions project, according to this internal email from GateHouse chief executive Kirk Davis, forwarded to me by a trusted source just a few minutes ago. The news follows Tuesday’s announcement that Google News will partner with the McClatchy chain.

The GateHouse experiment will take place at The Columbus Dispatch, followed by “a broad roll-out of our Digital Subscription Lab learnings across the GateHouse network.” GateHouse, as you know, owns more than 100 newspapers in Greater Boston and beyond, including the Providence Journal and the Telegram & Gazette of Worcester.

Certainly I would rather that Google put its efforts (and its money) into helping independent local news projects. But Google wants content, and the corporate chains are in the best position to give them that. Davis’ full email follows.

To: All GateHouse Media employees
From: Kirk Davis, CEO, GateHouse Media
Re: Google News Initiative Digital Subscriptions Lab
Date: March 27, 2019

Developing a sustainable digital subscription model to showcase the amazing work being done by our journalists across the United States is essential to preserving the vitality and viability of our local journalism. Which is why I’m thrilled to announce that GateHouse has been selected, as one of eight publishers, to participate in the Digital Subscriptions Lab, a partnership between the Google News Initiative, the Local Media Association and FTI Consulting.

This intensive six-month program will address every step of the digital subscription process from discovery to conversion to retention. Participants will receive dedicated 1:1 support from each of the three partners, as they leverage their respective capabilities in research, product, technology and analytics. Several in-person meetings over the course of the program will enable participating publishers to share strategies, insights and best practices.

We have selected The Columbus Dispatch to be the focus for our engagement; with 13,000 digital subs, The Dispatch is among our largest, paid digital subscription products. We anticipate a broad roll-out of our Digital Subscription Lab learnings across the GateHouse network. Our participation in this elite program is exciting; it reflects our very strong commitment to the future of community journalism!

Kirk

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Good jobs at good wages

Context is everything. Yesterday, I wrote about the compensation packages of GateHouse Media’s top two officials, chief executive Michael Reed and the just-promoted president and chief operating officer, Kirk Davis.

What I wrote was accurate, but I failed to consider what top executives might be making at other newspaper companies. As it turns out, there’s nothing special about Reed’s salary ($925,000 in 2007) or Davis’ (about $461,000). Reed’s 2006 compensation, $6.4 million, included a lot of stock, the value of which has presumably all but disappeared.

With 2007 revenues of $589 million, GateHouse is on the smaller end of the publicly traded newspaper companies I looked at this morning. But its challenges are as great or greater than those of much larger companies — it’s staggering under a debt load of $1.2 billion, and its stock price has fallen so much that it was delisted this fall by the New York Stock Exchange.

Anyway, here’s a quick cruise around a few other newspaper companies and what they paid their top managers in 2007, ranked by 2007 revenues.

Gannett Co. ($7.4 billion)

  • Craig Dubow, chairman, president and chief executive officer: salary, $1.2 million; total compensation, $7,546,710
  • Gracia Martore, chief financial officer, executive vice president: salary, $700,000; total compensation, $3,026,985
  • Susan Clark-Johnson, chairwoman of U.S. community publishing: salary, $735,000; total compensation, $3,145,339
  • Not-so-fun fact: Employees have been told to take a one-week unpaid furlough during the first quarter of 2009
  • Financials from WSJ.com

New York Times Co. ($3.2 billion)

  • Arthur Sulzberger Jr., chairman: salary, $1,087,000; total compensation, $3,439,280
  • Janet Robinson, chief executive officer: salary, $1 million; total compensation, $4,142,410
  • Michael Golden, vice chairman: salary, $1 million; total compensation, $1,706,579
  • James Follo, chief financial officer and senior vice president: salary, $480,000; total compensation, $859,273
  • Not-so-fun fact: A recent, widely disputed essay in the Atlantic speculates that the flagshap New York Times could cease publishing as early as this May
  • Financials from WSJ.com

McClatchy Co. ($2.3 billion)

  • Gary Pruitt, chairman and CEO: salary, $1.1 million; total compensation, $4,635,355
  • Patrick Talamantes, chief financial officer and vice president for finance: salary, $500,000; total compensation, $938,970
  • Three vice presidents of operations are paid salaries in the range of $500,000 to $600,000; total compensation is around $1.1 million apiece
  • Not-so-fun fact: The debt-burdened chain is trying to sell the Miami Herald, but can’t find any takers
  • Financials from WSJ.com

Journal Register Co. ($463 million)

  • James Hall, chairman and chief executive officer: salary, $394,750; total compensation, 411,233
  • Scott Wright, president and chief operating officer: salary, $201,923; total compensation, $231,040
  • Julie Beck, executive vice president and chief financial officer: salary, $337,500; total compensation, $431,510
  • Robert Jelenic, former chairman and chief executive officer: salary, $945,396; total compensation, $6,318,394 (Jelenic died last month)
  • Not-so-fun fact: The deeply troubled company is closing some of its papers and selling off others
  • Financials from the company’s 2008 proxy statement (PDF)

What’s the takeaway? Top executives at newspaper companies, like top executives everywhere, make a lot of money. We tend not to notice when times are good. But with the newspaper business under siege, such lavish compensation packages seem out of sync, both symbolically and substantively.

On the other hand, if any of these well-paid folks can find a way out of the current morass, they will be worth every cent.