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On news deserts, hedge funds and the state of our democracy

What do we lose when there's no one holding us accountable?

  • Russ Walker/PA Post
The Pottstown Mercury and the Times Herald of Norristown, both owned by Alden Global Capital, often publish the same stories by the same reporters. On a recent Monday, Evan Brandt had front page stories in both papers.

Emma Lee / WHYY

The Pottstown Mercury and the Times Herald of Norristown, both owned by Alden Global Capital, often publish the same stories by the same reporters. On a recent Monday, Evan Brandt had front page stories in both papers.

Thirty-five years ago today, the Live Aid concerts were held in London and Philadelphia. By coincidence, my wife and I were watching Bohemian Rhapsody the other day, which ends with Queen’s powerful set on the stage at Wembley Stadium. Closer to home, Philadelphia Magazine last week published this oral history of the concert. Five years ago, WXPN published this wonderful collection of videos and memories from Philly’s JFK stadium on the concert’s 30th anniversary. Time flies…but the music never stops. —Russ Walker, PA Post editor

Emma Lee / WHYY

The Pottstown Mercury and the Times Herald of Norristown, both owned by Alden Global Capital, often publish the same stories by the same reporters. On a recent Monday, Evan Brandt had front page stories in both papers.

Dan Barry is one of those bylines that’s always worth noting when flipping (or clicking) the pages of The New York Times. Barry’s latest is a tribute to local journalism and the increasing reality that the once indispensable hometown newspaper is a dying breed.

Barry profiles Evan Brandt, one of the last reporters working at the Pottstown Mercury:

“Forget dashing foreign correspondents and ‘All the President’s Men’: Daily journalism often comes down to local reporters like Mr. Brandt. Overworked, underpaid and unlikely to appear as cable-news pundits, they report the day’s events, hold officials accountable and capture those moments — a school honor, a retirement celebration — suitable for framing. But they are an endangered species being nudged toward extinction by the most important news story in decades. The coronavirus.”

The Mercury, Barry tells us, is owned by Alden Global Capital, a hedge fund that’s acquired scores of local dailies around the country in the past decade. The Alden business model is simple: Sell all the valuable assets of a local paper (usually it’s headquarters building, for starters) and cut costs to the bone. Hence the fact that Brandt is the lone reporter covering local government and much more in Montgomery County, the third-most-populated county in Pennsylvania.

Sunday brought news that the Centre Daily Times, part of the storied McClatchy newspaper chain, will likely become an asset of another hedge fund, Chatham Asset Management. As the Wall Street Journal notes, the “sale to Chatham would mean roughly one-third of all newspapers sold in the U.S. each day are published by companies controlled by financial institutions. Fortress Investment Group LLC manages Gannett Co., the country’s largest newspaper chain, with Apollo Global Management Inc. as the primary lender. Alden Global Capital LLC owns MediaNews Group, which publishes some 60 dailies, including the Denver PostSan Jose Mercury News and the St. Paul Pioneer Press.”

What’s so wrong with hedge funds investing in media? Isn’t it a good thing that Wall Street sees newspapers as a business worth investing in? Penelope Muse Abernathy at the University of North Carolina-Chapel Hill has studied the rise of hedge fund ownership as part of her work tracking the decline of local media across the country. Her take:

“In contrast to the traditional publicly traded and private chains of the 20th century, the investment-owned chains do not buy and hold properties. They view newspapers as short-term investments, and they hold newspapers to the same financial benchmarks as manufacturing plants or health care facilities. …

“This constant turnover in ownership and trading of newspapers significantly weakens bonds between news organizations and the communities where they are located. Editors and publishers often cycle in and out of a community in a matter of months, never putting down roots. Another round of layoffs occurs with every transaction, leaving skeletal staffs on many newspapers. Sales, editing and back-shop functions are outsourced to remote locations, with regional editors and publishers responsible for multiple newspapers. Over time, this leads to the merger of two or more smaller papers into one paper – and the closure of the smaller paper. Most of the communities that have lost papers in recent years have above-average poverty rates and below-average household incomes. Once the hometown paper closes, residents in those markets are left without a reliable source of local information. This has led to the simultaneous rise of news deserts – communities without a local news outlet – and ‘ghost newspapers,’ with depleted newsrooms that are only a shadow of their former selves.”

[BTW, Abernathy’s research on “news deserts” shows that two Pennsylvania counties — Montour and Union — have no local newspaper at all.]

As for the economic fallout of the coronavirus, it’s just making a bad situation worse for local media. The Poynter Institute compiled a list of 50 newspapers that have closed since the epidemic started.

What do we lose when the local newspaper closes? Too much. The press is the only business specifically mentioned in the U.S. Constitution (see Amendment, The First), and that’s because the Founders understood that a vigorous press can hold politicians and institutions accountable to the public. Take McClatchy as an example — look at the impressive journalism their member newspapers produced last year that had profound impacts on the communities they serve. Or take a look at the vital work recognized in this year’s Keystone Media Awards.

There are plenty of smart people thinking about how the local news industry can be saved, supported and reinvigorated, as noted in the links below. But what can you do? For starters, pay for news. Subscribe to your local newspaper. Donate to your local public radio or TV station, or to a local digital media startup. Your willingness to pay for news is as much a civic duty as going to the polls on Election Day.

Finally, longtime Pittsburgh Post-Gazette columnist Brian O’Neil penned his last piece for Sunday’s newspaper. His column is worth your time.

Best of the rest

Russ Walker / PA Post

The basket by this author’s bed with all the unfinished books he’s still trying to get to.

In last Monday’s memo, I asked for your reading recommendations for this summer of coronavirus, when many of us are spending most of our time at home and vacation plans tend toward the lazy and isolating instead of travel-filled.

I didn’t get many responses (c’mon Contexters!). But Anne Gray wrote in with these recommendations:

And my WITF colleague Shelley Hershey said she’s reading these two books

And here are two more from me:

Some additional recommendations gathered by Pa. news organizations:

Trump v. Toomey?

Pat Toomey, Pennsylvania’s Republican U.S. senator, criticized President Trump for his Friday night decision to commute the sentence of Roger Stone. In response, the president used his favorite platform, Twitter, to call Toomey a “RINO,” short for Republican in Name Only.

Coronavirus round-up:

Eye-catching headlines:

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