The Atlantic’s McKay Coppins took to NPR this week to bolster his contention that the decline of the newspaper in America is the work of a shady venture fund that few people have heard of — although in actuality, the decline is due to what normally kills business in America: the inability to make money.
Calling the venture firm Alden Capital, which recently bought the Chicago Tribune and owns 200 papers nationwide, a “vulture hedge fund,” NPR repeats the central contention of Coppins’ argument that, despite profitability, Alden slashed the Tribune’s newsroom, just as they have in other newspapers they have bought.
“The Tribune Company (which owns the newspapers mentioned above) was still turning a profit when Alden bought it,” says NPR. “But the hedge fund immediately offered aggressive rounds of buyouts and shrunk its newsrooms in the name of increasing profit margins.”
This is not true.
In fact, shortly after Alden completed the acquisition, the Tribune reported losses from continuing operations of $46.8 million in 2020 versus a loss of $7.1 million in 2019. Total revenue was down $46.7 million for the fourth quarter (nearly 20%), with losses in advertising, circulation, home delivery and single-copy sales. Only in digital subscriptions did the company report a gain for the quarter, this time of $5.4 million.
“Loss from continuing operations increased to $46.8 million from $7.1 million in 2019 as a result of non-cash impairment charges of $78.7 million,” said the company’s earnings release.
As late as 2016, the Tribune stock traded as high as $80 per share. In May, the company accepted a buyout from Alden of $17.25, a 40% increase over its closing price of around $12 per share.
The Tribune has suffered from the same declining readership and circulation that is killing newspapers across the country, and the fault is largely with the newspapers themselves. One can hardly blame a new investor for taking steps to make sure they don’t continue to bleed money.
The truth is that most readers don’t find much value in being pushed the same liberal slant at local papers that they are subjected to in the national press. From presidential elections to mask and vaccine mandates, newspapers are asking readers to purchase content that doesn’t consider their views; in fact, it has contempt for their views.
It’s no wonder people don’t want to pay for it.
Part of the problem is that newspapers have decided that they are indispensable to the running of the country, when in fact, their job should be to report on news, and public wrongdoing, as a watchdog rather than take sides in politics.
What other type of company believes that people will pay it to help run the country, especially when the company advocates policies that their consumers don’t agree with?
A 2019 report from the Knight Foundation and Gallup warned against this, saying that when local news gets political, it risks becoming irrelevant.
“The study findings present a dilemma for local news. The data suggest that moving into more aggressive coverage of social and political issues could further polarize views — and possibly lead to an erosion of trust. However, these are not issues that local news organizations can abandon without abdicating some of their mandate to help democracy flourish,” the report states according to the Nieman Lab, a journalism advocacy group.
And therein lies the problem.
Newspapers – and the journalist that run them– think they are paid to help “democracy flourish” whereas readers just want to read the news.
And as long as they continue to think they have a “mandate to help democracy flourish,” companies like Alden Capital will buy them out and gut the newsrooms, because newspapers don’t really have an unfunded mandate to do anything, no matter how many articles McKay Coppins writes.