Strip-mining

It’s an ugly piece of business

“Our commitment to ensuring the sustainability of robust local journalism is well established, and this is part of that effort.”

—Alden Global Capital, on buying up another media company this week

AS MARGARET Sullivan of The Washington Post put it upon reading that statement: “well established” is about the only part of that sentence that’s real.

There is a certain breed of newspaper publisher/media company that strip-mines its papers for short-term profit. Not that there’s anything wrong with profit. It keeps newspapers going. Just ask any editor or reporter or photographer or paginator or sales rep if he needs a paycheck every two weeks.

The problem isn’t profit; it’s strip-mining. It’s buying a paper, or many papers, with the intent to slash it to profitability. Until there’s nothing left to slash. And nothing left to read, and nothing left to sustain it.

For examples of the practice, go a bit South or East of here and pick up a copy of a local newspaper. If you can find a copy at a newsstand or convenience store (good luck), it probably contains mostly wire copy. Newspapers all across the land have turned into TV stations— they cover weather events, murder trials and car wrecks. Certain companies have bought these once-great newspapers, squeezed all the money out of them, and left them shells of their former selves. That can happen when the owners of newspapers don’t know they’re owners of newspapers.

How does that happen? Because many media companies are owned by shareholders who may not even live on the same continent as their customers. And if they have their money invested in mutual funds or similar companies, they might not know they own part of a newspaper at all. And you certainly couldn’t complain to them about the devolution of their news columns. It’s a weakened business model since Google and Facebook took most of the advertising that once went to sustain journalism.

Word came down this past week that Tribune Publishing will be sold to Alden Global Capital, a hedge fund known for making money by slashing the costs of local journalism. Tribune Publishing owns the likes of The Chicago Tribune, which we publish regularly on this page, especially its well-written and thoughtful editorials in our “Others Say” section.

Hedge funds running newspapers do have “well-established” records. Just look at what has happened to The Denver Post. It used to boast a staff of 250. Now it’s down to under 100.

When big companies (not necessarily interested in good journalism) take over newspapers, readers can get frustrated, canceling subscriptions, which leads to lower circulation, which leads to more cost-cutting, which leads to lower circulation, which … . You see which way this spiral goes. It can’t go on forever, and surely won’t. But those looking for quarter-to-quarter profits above all, even at the expense of a newspaper’s worth, aren’t concerned about forever, or maybe even next year. And you should see the result. Actually, you shouldn’t.

Talk about killing the goose that lays the golden egg. When the suits get finished milking a paper for all it’s worth, these newspapers—which don’t offer readers much any longer—will get put down, Old Yeller style. From there, news deserts form. Entire counties are left without a source of local news. More than 2,000 newspapers have closed in the last 15 years. Who is going to inform readers of an upcoming millage vote? Who is going to hold government officials accountable for spending of tax dollars?

For an example of how good newsrooms operate, well, we hate to brag, but look to the front page of this paper. We have editors and reporters who don’t call their work The Product, but beat the stuffing out of their beats. Just ask those running homes for juveniles or mentally ill patients or veterans if Arkansas has local news reporters on the job.

A newspaper is a unique enterprise, being both a for-profit business and a public trust. But a hedge fund in charge of a newspaper company focuses only on the profit part and is typically a harbinger of slow doom.

If Alden makes the Tribune a better newspaper for its readers, now that would be news.