The financiers, new barons of the local American press

The financiers, new barons of the local American press

The "Trump Bump" that brought a
second youth to major American dailies

   , seems to have no effect on the regional press, whose decline has accelerated in alarming proportions over the past decade. "The most dramatic crisis for American journalism is the death of local newspapers, recently lamented Dean Baquet, managing editor of the New York Times. Most US regional newspapers will die in the next five years, except for those bought by a local billionaire.

according to
data from the University of North Carolina

   more than 1,800 local newspapers and weeklies have disappeared in 15 years, and the number of newsrooms has been halved. In 2017, the number of television journalists for the first time exceeded that of print editors. " Facebook, which wants to invest 300 million in the press with a focus on local information, complains about not finding local projects to finance, notes Penelope Abernathy, professor at the School of Journalism at the University of North Carolina. A decline caused by the collapse of advertising revenues, much of which is now captured by Google and Facebook, and by the emergence of social networks that erode the newspaper audience.

Concentration

These upheavals caused a wave of concentration, but especially the appearance of a new type of media barons, unexpected profile: the financiers. Nearly half of the newspapers (47%) belonging to the 25 largest shareholders in the industry
are today the property of pension funds, private equity funds or hedge funds, against 20% 10 years ago.

Among the most emblematic, the private equity fund Fortress, which created in 2005 Gatehouse Media, where are housed securities redeemed since, 156 daily and 328 weekly, most of which cover very small areas. And the hedge fund Alden, which in 2011 founded Digital First Media, owner of just over 200 titles (Denver Post, Boston Herald …). These two titans are currently clashing for control of Gannett, an independent press group that owns the USA Today newspaper and a hundred regional titles (Arizona Republic, Detroit Free Press, Indianapolis Star …), causing a wave of panic in the newsrooms.

"Deserts of the info"

"These investors have a financial approach, they drastically reduce costs by cutting editorial offices, consolidate administrative services in regional hubs, and increase advertising revenues by blurring the border between editorial content and advertising to sell them more expensive Says Penelope Abernathy. The goal is to sell the asset quickly: " in 2008, a security sold for about 13 times its net profit, which justified keeping it for 14 yearsshe continues. Today, the multiples have fallen to three times the profits ". More than 300 securities owned by investment firms have been sold or closed since 2004, according to data from the University of North Carolina.

Faced with the decline of the local press, and the emergence of what the specialists call "the deserts of the info", generally disadvantaged areas that are no longer covered by any media, some local information sites, often with a purpose nonprofit, have emerged with the ambition to fill part of the gap. But "90% of these sites cover urban areas, because that's where the advertising revenues are," Temper Penelope Abernathy.

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