January 2, 2018

How hedge funds have damaged the newspaper industry

Boing Boing - In an exhaustive and fascinating article in the American Prospect, Robert Kuttner and a psuedonymous editor at a hedge-fund-owned community paper make a compelling case that the acquisition of community papers by private equity firms from their retiring, patrician family owners destroyed the news: mass newsroom layoffs, centralized decision making and design, pay-cuts and pay-freezes, and the kind of petty, short-sighted penny-pinching that is hard to believe (editorial staffers at the papers owned by Gatehouse don't get free subscriptions to the newspapers they contribute to).

Now, it's obvious that the web has been hard on the advertising market for print periodicals, but the hedge-fund-crapification of newspapers started before the web did, and had already degraded and weakened the news market, leaving it vulnerable to disruption (not least because private equity's favorite play is to sell off a business's real-estate and physical plant and load it up with debt, leaving it in fragile straits should its fortunes change).

And the increased weakness of newsmedia has only accelerated the process. In Canada, a group of US private equity vultures are publicly choking one of the national newspaper chains to death. The web is certainly not helping these papers survive, but there's a lot of talk about Craiglist's impact on classifieds, and a lot less on whether a newspaper that loses 70% of its newsroom and then raises its prices can be said to be well-managed or even worth saving.

1 comment:

Greg Gerritt said...

And when newspapers, due to ownership by corporate entitities, promote stuff that really hurts the communities they operate in, they deserve to go unde3r. In RI, the biggest paper just published an editorial supporting a bunch of lying cheating conniving clowns trying to build a power plant in a town where the entire town (and 33 of 39 towns in the state) is opposed. idiots who only can think of money.