Another Cold, Hard Look at the Pillaging of Newspapers

You're missing the point. Did you read the article?

THE PRESS IS NOT THE ONLY victim of private equity, one of the most predatory and poorly understood parts of contemporary American capitalism. The idea that managers can make a fortune by bleeding an enterprise dry seems to defy gravity, but that is increasingly the pattern, not just in media but in other sectors where private equity has made major inroads, including retailing, fast food, airlines, hospitals and nursing homes, private prisons, private universities, and a great deal more. Today, private equity firms control some $4.3 trillion of operating companies that employ at least 11 million workers.

The basic model is the same whatever the sector. Borrow heavily against the assets of the operating company, extract income in the form of excessive dividends and management fees, sell off real estate and other assets, cut wages, pensions, and other operating costs. And then, as an exit strategy, either find a buyer for part or all of the business, or take it into bankruptcy. Though private equity owners are hailed in some quarters as turnaround artists, for the most part the model is inconsistent with reinvesting in the long-term health of the enterprise.

 

It's not about that they're not thriving, it's that these companies are hastening these papers' demise by stripping them bare in order to pocket more bonuses, then declare bankruptcy and move on to the next company to strip bare.

They're like the aliens in Independence Day. They want to just strip every resource for their own gain, then move on.

 

I get it. I was a publisher working for owners trying to run papers at the same profit margin and the same manner it did 30-40 years ago when they were cash cows. They stripped our staff, watched every penny even when we needed new or better, or updated equipment.

I just merely mentioned print products. They're are people out there still trying to make a living by selling phone book ads.

 

Speaking from personal experience, this is a paper that had eight full-time staff on the news side back in the early 90s. It also had a regular part-timer for the weekend papers, three ace photographers and a local ownership that wasn't shy about filing FOI lawsuits. Plus, the lucky bastards who came after me apparently got their own gym, complete with basketball court.

Now, according to the website, they're down to three, But with what looks to be the same emphasis on filling the paper with local copy. Man, nostalgia is wonderful but I'd never want to go back there now.

 

Work smarter, not harder might've been the slogan of every newspaper from 2007 to 2014 or so. Then everyone realized we're all fucked.

 

"We all know we're not here for the money, right?"

Our executive editor, whose salary was well into six figures, rallying the troops again.

 

A lot of papers did fold even in the "cash cow" days (Dallas Times-Herald, Baltimore News-American, Los Angeles Herald-Examiner, Knoxville Journal, Birmingham Post-Herald, Philadelphia Evening Bulletin, etc.).

In somewhat of an oddity, the tiny town of Crawfordsville, Ind. (pop. 16,000), still publishes two newspapers (one Tuesday through Saturday, the other Monday through Saturday with a Sunday digital edition).

 

This. Basically what's destroyed Sears

 

Sears has been on the slow road to irrelevancy for 30 years. Fast Eddie hasn't helped and has pocketed a ton of cash from this, but all he did was speed up the eventual demise.

 

Most newspapers on the market are being acquired by either Gannett, GateHouse or private-equity firms. Sort of like a choice between hanging, the electric chair or a firing squad.

 

Eh, sort of. Their capital expenditure is a joke. They could've been Target if they had a retailer in charge instead of a deranged equity/hedge fund dipshit. (Bitter bc I worked there paying off college).

 

10 years and no raises. It's almost criminal. Again, newspapers are a total disgrace. This Gatehouse company may now be the worst of all. Newspapers, fake news, you ain't seen nothing yet as more and more non journalism people run the staffs of 1-2 reporters. And yet CEOs of these companies make billions. Very strange. Again the only reason a person would work and not get a raise for 10 years is this journalism thing is in the blood of many and it'll remain there until the person loses his/her job.