Though lacking the size and prestige of The New York Times or The Washington Post, The Storm Lake Times is arguably just as important.
Two years ago, the small, bi-weekly Iowa paper (circulation: 3,000) won the coveted Pulitzer Prize for taking on agricultural water pollution in the state. If it weren’t for vibrant local papers, stories like these might never come to light.
Unfortunately, all over the country, private equity and hedge funds have been scooping up these cash-strapped papers — and looting them into irrelevance or bankruptcy.
Here’s how it works.
Investors put down a fraction of the purchase price and borrow the rest — and then saddle the company with that debt. Layoffs and cutbacks follow, which leads to a shabbier product. Circulation and revenue decline, then more cuts, and the cycle accelerates.
Eventually the paper is a shadow of its former self, or turned to ashes completely. Wall Street wins, the public loses.
Perhaps the most infamous recent example was the breakdown of the 127-year-old Denver Post. Since private equity firm Alden Global acquired the paper, it has cut two out of every three staff positions — twice the industry rate for downsizing.
To add insult to injury, the firm has been using staff pension funds as its own personal piggy bank. In total, they’ve moved nearly $250 million into investment accounts in the Cayman Islands.
Employees who remain grapple with censorship. Last April, Dave Krieger — editorial page editor of Alden’s Boulder Daily Camera — was fired after self-publishing an opinion piece headlined “Private Equity Owners Endanger Daily Camera’s Future.”
In solidarity, Denver Post editorial page editor Chuck Plunkett resigned, complaining that his publishers were also censoring stories that might offend Alden.
Alden’s Digital First Media runs many other big papers, putting hundreds of newsroom staff at risk of censorship and layoffs. Millions of readers, in turn, may learn only what Alden deems fit for them.
It’s not a new pattern. In 2008, a year after billionaire Sam Zell bought the Tribune Co. — publisher of the Chicago Tribune, Los Angeles Times, and other venerable publications — the company filed for bankruptcy, saddled with $13 billion in debt in what’s been called “the deal from hell.”
After it emerged from bankruptcy, the company was left in the hands of — you guessed it — private equity.
The march of these buyout barons continues. This summer, New Media Investment Group (owner of GateHouse Media) announced plans to buy Gannett. The $1.38 billion deal would unite one-sixth of all daily newspapers across the country, affecting 9 million print readers.
New Media anticipates cutting $300 million in costs each year, suggesting layoffs comparable to those at The Denver Post are in the offing — even as the company and its investor owners harvest profits.
This is a crisis. This country lost more than a fifth of its local newspapers between 2004 and 2018, while newspapers lost almost half of their newsroom employees between 2008 and 2018.
A few lawmakers are catching on.
Sens. Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), and Sherrod Brown (D-OH) recently introduced the Stop Wall Street Looting Act to curb these abuses, with Warren specifically calling out private equity firms for decimating local newspapers.
Senator Bernie Sanders recently introduced an ambitious plan of his own, calling for a moratorium on major media mergers and encouraging newsrooms to unionize nationwide.
Newspapers have been critical to American democracy since its founding. By allowing huge corporations to gut newspapers in the name of making a buck, we’re putting a price tag on that democracy when we need it most.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.