CBS’ 60 Minutes Investigates Private Equity’s Impact on Democracy: “Local newsrooms strained by budget-slashing financial firms”

60 Minutes reported how hedge funds and other financial firms – including private equity – now own nearly a third of the daily newspapers in the US. These new owners “are often committed not to headlines and deadlines, but to bottom lines”:

One fund in particular has been called by some in the industry a “vulture,” bleeding newspapers dry. It all prompts the question: as local newsrooms and local news coverage shrivel up, to what extent does democracy shrink with it?”

60 Minutes, February 27, 2022: “Local newsrooms strained by budget-slashing financial firms”

60 Minutes’ host Jon Wertheim interviewed a local reporter in a small Pennsylvania town who identified Alden Global Capital as “the worst culprit.” Alden bought that reporter’s local paper in 2011 “and has since sold the paper’s building and slashed newsroom staff by about 70%. Severe even by the standards of the newspaper sector that has seen an astounding 57% job loss since 2008.”

Alden now owns more than 200 newspapers, making it the country’s second largest newspaper owner behind Gannett, prompting 21 senators in 2019 to ask Alden president Heath Freeman to abandon his “newspaper-killing business model.”

Former Chicago Tribune journalist David Jackson told 60 Minutes, “Alden has sort of a playbook of going into a distressed newsroom and selling off the real estate and property, equipment, things like that. And second of all, diminishing the resources that the reporters have. These are executives from a hedge fund who live a very wealthy lifestyle. They’re not taking the profits and using them to build the Tribune.”

Despite journalists and staff standing up to Alden, last May the firm bought Tribune Publishing “for more than $600 million and two days later started offering buyouts to Tribune Employees. More than 40 have since left the Chicago Tribune, including one-fourth of the newsroom.”

60 Minutes shared results of a 2018 UNC study that found some Alden-owned newspapers had cut staff at twice the rate of their competitors.

The journalists observed that “when you have power that isn’t watched, it tends to get abused” and gave examples of how “in the absence of local reporting, there’s evidence of increased corruption by local officials.” Still worse, “The vacuum was filled by national cable news, and social media, and very opinionated, polarizing material.” 

In order to preserve American democracy, journalists told 60 Minutes that there needed to be “a dramatic increase in the commitment of foundations, and philanthropists, and donors… to actually supporting local news.”