In our latest podcast, Penny Abernathy talks about news deserts and what to do about them

Penelope Muse Abernathy

Penelope “Penny” Muse Abernathy, a visiting professor at Northwestern University’s Medill School of Journalism, arguably launched a movement with her path-breaking research on “news deserts” and the forces undermining community newspapers across the nation.

Abernathy, a former executive with The New York Times and The Wall Street Journal, was also Knight Chair in Journalism and Digital Media Economics at the University of North Carolina from 2008 to 2020. She talks about why this is a pivotal moment for community journalism, about her forthcoming research and about why her journalism students are still bullish on speaking truth to power at the local level.

In Quick Takes, Dan reports that the nonprofit strategy at The Salt Lake City Tribune is actually working out, and Ellen tunes us in to Heartland Signal, a new digital outlet with a Democratic spin that is setting up to cover the midterm congressional elections.

Please give us a listen — and subscribe via Apple Podcasts, Spotify or wherever fine podcasts are available.

Trump’s postmaster general targets journalism with a devastating rate hike

Painting by J.C. Leyendecker (1874-1951). Uploaded (cc) 2020 by Halloween HJB.

As scholars from Paul Starr to Victor Pickard have observed, newspapers in the United States have benefited mightily from postal subsidies since the earliest days of the republic.

Starting in the Reagan era, though, the U.S. Postal Service has been run under the misguided notion that it should break even or turn a profit rather than be operated as a public service. As a result, postal rates for periodicals have been rising for more than a generation, putting additional pressure on newspaper and magazine publishers who are already straining under the economic challenges posed by technology, cultural shifts — and, now, the post-pandemic recovery.

The latest bad news comes in the form of a report from The Associated Press that rates on periodicals are scheduled to rise by more than 8% on Aug. 29. The AP story, by David Bauder and Anthony Izaguirre, says the increase is “part of a broad plan pushed by Postmaster General Louis DeJoy to overhaul mail operations.”

DeJoy, you may recall, is the ethically challenged Trump appointee who slowed down mail service last year, thus imperiling vote-by-mail efforts in the midst of the pandemic. For some reason, he appears to have more job security than Vladimir Putin.

Speaking of subsidies, you can support Media Nation — and receive a weekly newsletter with exclusive early content — by becoming a member for just $5 a month. Just click here.

Now, you might think that rising postal rates would simply push publishers to hasten their transition to digital. But it’s a simple matter of reality that print advertising continues to play an important role in keeping newspapers and magazines afloat. For instance, earlier this year, Ed Miller, the co-founder and editor of start-up Provincetown Independent, explained that he offers a print edition alongside a robust website because otherwise it would be just too difficult to make money.

Northwestern University Professor Penelope Muse Abernathy tells the AP that the effect of higher postal rates could be devastating for small local news projects that are already struggling. “It is one of several nicks and slashes that can damage the bottom line, especially if you are an independent publisher who is operating at break even or in the low single digits of profitability,” she says. “And most are.”

Ironically, a section of the Postal Service’s website sings the glories of how subsidies helped foster robust journalism, quoting George Washington and Thomas Jefferson. The essay starts like this:

From the beginning of the American republic, the Founding Fathers recognized that the widespread dissemination of information was central to national unity. They realized that to succeed, a democratic government required an informed electorate, which in turn depended upon a healthy exchange of news, ideas, and opinions.

At a time when the idea of government funding for journalism is being debated in the public square, postal subsidies stand out as a particularly benign way to go about doing that. As with tax benefits for nonprofit news organizations, postal subsidies are indirect. That makes it difficult for the government to punish individual media outlets for tough coverage — as is happening right now in Western Pennsylvania, where the Republican-dominated state legislature has eliminated funding for public broadcasters even as one station has persisted in calling out the Republicans for touting the “big lie” about the 2020 election. (Republican officials deny there’s a connection.)

It’s long past time for Louis DeJoy to hit the bricks and for the post office to be reorganized as a public service. Foremost among those services should be helping to provide the public with reliable, affordable journalism.

Local newspapers are dying. And hedge funds are making it worse.

Previously published at WGBHNews.org.

The state of local journalism is grim — and the hedge funds that have scooped up hundreds of newspapers over the past decade have made things even worse than they otherwise might be.

That’s the conclusion of a new report from the University of North Carolina. Titled “The Expanding News Desert,” the study finds that corporate chains controlled by private equity and hedge funds cut more deeply, shut down more papers, and demonstrate less regard for journalism’s civic mission than was the case with “the historic practices of traditional print newspaper companies.” Here’s how the report’s author, Penelope Muse Abernathy, the Knight Chair in Journalism and Digital Media Economics at UNC, describes the strategies pursued by what she calls these “new media barons”:

The standard operating formula often included aggressive cost-cutting, the adoption of advertiser-friendly policies, the sale or shuttering of under-performing newspapers, and financial restructuring, including bankruptcy. At the most extreme, their strategies have led to the closure of hundreds of local papers and diminished the important civic role of newspapers in providing reliable news and information that helps residents of a community make important decisions about governance and quality of life issues.

This has enormous implications for Greater Boston, where two leading hedge-fund-owned chains, GateHouse Media and Digital First Media, already control most of the local papers, and where a third, CNHI, has put its four dailies in the Merrimack Valley and on the North Shore up for sale. Those papers — The Eagle-Tribune of North Andover, The Daily News of Newburyport, The Salem News, and the Gloucester Daily Times — are at risk of falling into the hands of either GateHouse or Digital First, which are likely to double down on the deep cuts that have already been made.

Digital First, controlled by Alden Global Capital, currently owns three papers in Massachusetts — the Sentinel & Enterprise of Fitchburg, The Sun of Lowell, and its most recent acquisition, the Boston Herald. Although I’ve written about Digital First on several occasions previously (for instance, see this), I was struck in reading the UNC report by just how bad things are.

Digital First’s profit margin in 2017 was 17 percent, far higher than that of other newspaper companies, including GateHouse. And it achieved that margin by destroying newsrooms — in some cases literally. The newsroom at the Fitchburg paper was shut down last year, with the paper’s journalists being told to work out of their homes. In the suburbs of Philadelphia, reporters at two Digital First papers “must work remotely,” Abernathy writes, “because the Pottstown Mercury’s mold-infested newspaper building has been condemned.”

The top-line numbers at Digital First are breathtaking. Between 2012 and ’17, employment at 12 Digital First papers decreased by 52 percent, from 1,766 to 849, according to a survey conducted by the NewsGuild. Yet as bad as that period was for the newspaper business as a whole, the Bureau of Labor Statistics found that total newspaper employment dropped by about one-fourth from 2012 to 2016 — only about half the rate of journalistic job destruction at Digital First.

GateHouse, meanwhile, has expanded massively in recent years — from 379 newspapers with a total circulation of 3.1 million in 2014 to 451 papers and 4.3 million in circulation today. The company controls well over 100 community weeklies in Greater Boston and environs as well as dailies such as the Providence Journal, the Telegram & Gazette of Worcester, The MetroWest Daily News of Framingham, and The Patriot Ledger of Quincy. According to the UNC findings, GateHouse’s decimation of the ProJo, which it purchased in 2014, has been especially brutal:

By July 2018, newsroom employment had been cut by 75 percent, bringing the staffing levels below 100. According to the NewsGuild-CWA, there were fewer than 20 reporters and columnists responsible for covering both state and city government.

GateHouse has also embarked on a strategy of selling business and marketing services to advertisers through subsidiaries of its hedge-fund owner, Fortress Investment Group — “raising questions,” as the report puts it, “about the role of a local newspaper’s sales department in supporting local businesses.” Readers are fleeing GateHouse’s shriveled papers. Revenues, profits, and share prices are all down. All of that calls into question, Abernathy writes, whether GateHouse’s aggressive acquisition strategy is sustainable.

The depredations of Digital First and GateHouse are taking place amid the cratering of local journalism nationwide. Among the UNC report’s findings:

  • About 60 daily newspapers and 1,700 weeklies have closed since 2004, an overall decline of about 25 percent.
  • Nearly 200 of the 3,143 counties in the United States no longer have a newspaper. More than 2,000 counties have no daily paper.
  • Residents in these “news deserts” — that is, areas without newspapers — “are generally poorer, older and less educated than the average American.”

What can be done about the decline of local journalism and the rise of predatory hedge-fund newspaper chains? There is no one answer. The report notes that LION Publishers (Local Independent Online News) counts about 525 local digital news operations, both for-profit and nonprofit. Some, such as the New Haven Independent, The Batavian of Batavia, New York, and VT Digger, a statewide project based in Montpelier, Vermont, do an outstanding job of covering local and regional news. Yet many such operations are tiny and, as the report notes, a 2015 survey found that one in four failed. Although you could argue that three in four surviving is actually a pretty good track record, that’s not nearly enough to water the news deserts that are spreading across the countryside.

“There is a compelling need,” Abernathy writes, “for philanthropic foundations, community activists, local government, concerned citizens and potential founders of nonprofit news organizations to work together from the beginning to identify communities most lacking coverage and the funding needed to sustain a start-up news organization in those communities.”

That would be a good start, as would programs to boost civic and media literacy, another recommendation of the report. Without quality local news, it’s hard for people to participate in their communities in a meaningful way — or even to understand why they should. Corruption runs amok. Apathy reigns. And the underpinnings of democracy rot away.

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