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This is profoundly bad news. https://twitter.com/srabil/status/1084617437247668229
This seems like a good time for a thread on the impact of private equity companies on local news. /1
Saving the Free Press From Private Equity - Navigating the digital transition is a huge challenge for newspapers. Absentee ownership by private equity predators makes it all but impossible. https://prospect.org/article/saving-free-press-private-equity /2
Key Quote: "Under DFM, the Eagle and its sister papers in the New England Newspaper Group [...] were relentlessly cut, though Alden managed to extract cash flow to meet a target return of 15 percent to 20 percent." /3
Finance Is Killing the News - https://newrepublic.com/article/148022/finance-killing-news /4
Key Quote: "A successful paper is turned into a shell of its former self so its hedge fund owners can buy houses in the Hamptons." /5
Meet the Vulture Capitalists Who Savaged ‘The Denver Post’ -- https://www.thenation.com/article/meet-the-vulture-capitalists-who-savaged-the-denver-post/ /6
Key Quote: "Digital First Media has been eviscerating newspapers at more than twice the national rate." Since 2011 "DFM executives have eliminated a staggering two out of every three staff positions at its media properties." /7
When Hedge Funds Try Journalism - Alden Global Capital and other institutional investors have been buying up newspapers. The results — for the newsroom, at least — have not been pretty. https://www.institutionalinvestor.com/article/b17xgx6r4hltwn/when-hedge-funds-try-journalism /8
Key Quote: "The strategy is to acquire, cut costs, and quickly sell. The problem, though, is finding buyers after those three to five years. With no more costs to cut and little consideration for future revenue sources, these newspapers flounder and sometimes shut down." /9
The Hard Truth at Newspapers Across America: Hedge Funds Are in Charge - https://www.bloomberg.com/news/articles/2018-05-22/the-hard-truth-at-newspapers-across-america-hedge-funds-are-in-charge /10
Key Quote: “They’re not reinvesting in the business,” Ken Doctor, a longtime newspaper analyst and president of the website Newsonomics, said about Alden Global. “It’s dying and they are going to make every dollar they can on the way down.” /11
Be sure to see this graphic on private equity ownership from @business last year /12
It Still Bleeds, But It No Longer Leads: The death of the newspaper industry is being hastened by those who want to profit off of it. https://www.theamericanconservative.com/articles/it-still-bleeds-but-it-no-longer-leads/ /13
But don't take my word for it, @businessofnews has a whole page dedicated to investment fund newspaper owners in their own words http://newspaperownership.com/additional-material/investment-newspaper-owners-statements/ As well as this useful timeline of acquisition, sales and closures at investment owned papers /14
Newsonomics: Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon https://nie.mn/2I3uwad via @NiemanLab /15
And here is a Newsonomics update this morning from @kdoctor "America’s most hated newspaper company wants to bring its special brand of cost-cutting and newsroom-gutting to about 100 more cities." http://www.niemanlab.org/2019/01/newsonomics-let-the-2019-consolidation-games-begin-first-up-alden-seeks-to-swallow-gannett/ /16
Notable: 11 years ago, almost to the day, @coppsm (then an FCC commissioner) called for a review of the impact of private equity on local media and the public interest: https://www.bloomberg.com/news/articles/2008-01-17/fcc-s-copps-seeks-review-of-investments-by-private-equity-firms /17
“This is the lumber company trying to buy the national park,” says @JimFriedlich https://twitter.com/Sulliview/status/1085256626041425922 /18
Here is Gannett’s USA Today covering the possible Digital First bid and the history of what private equity has wrought elsewhere. https://www.usatoday.com/story/money/business/2019/01/16/when-digital-first-media-gannetts-hostile-suitor-comes-town/2579392002/ /19
A vulture swoops down on Gannett (from the piece “the hunter becomes the hunted”) https://theweek.com/articles/818384/vulture-swoops-down-gannett https://theweek.com/articles/818384/vulture-swoops-down-gannett
Here is the Washington Post on DFM - "“They are the ultimate cash flow mercenary. They want to find cash flow and bleed it to death.” /21 https://twitter.com/Sulliview/status/1095307564156416000
Sadly, this thread just keeps getting longer... /22 https://twitter.com/mattdpearce/status/1100077172847300608
Returning to my old thread on the scourge of private equity and hedge funds in journalism and media ownership to post this new piece from @marcatracy /23
A Paradox at the Heart of the Newspaper Crisis https://nyti.ms/2MtQuFb
A Paradox at the Heart of the Newspaper Crisis https://nyti.ms/2MtQuFb
