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interviews

What State Takeover Looks Like

by Senator Scott Wiener
© Frank

interviews

Cutting Without Conscience

by Dan Kennedy
June 17, 2021

This interview with Dan Kennedyprofessor of journalism at Northeastern University, was conducted and condensed by franknews. 

Dan | I'm a professor of journalism at Northeastern University and a part-time contributor to GBH News, which is one of two big public broadcasters in Boston. I write a weekly column on media and politics for their website and I am a regular on their Friday media program called Beat The Press. I’ve also been writing a blog on media and politics, Media Nation, since 2005.

Now, since we're talking about local news, I'll tell you about the beginning years of my career. I not only teach at Northeastern, but I'm also a graduate of Northeastern. Northeastern has something called the co-op program where students work in their field for about half of their education. My co-op job was at the Woonsocket Call in Rhode Island. This gave me an immersion into local news when I was just 19 years old. It was a terrific and formative experience. When I graduated, I worked for 10 years for a newspaper in Woburn called The Daily Times Chronicle — which continues to today and continues to be owned by the same family that owned them when I was there in the 1980s. And then probably for the greater part of my career, for 14 or 15 years, I was at the Boston Phoenix, one of the great alternative weeklies in the country. It was really a terrific place to work and I was their media columnist for most of that time.

So, I've been covering these issues since the mid-nineties. I have written a couple of books about the future of news, one called The Wired City. My more recent book, The Return of the Moguls, takes a close look at the very rich people who were buying newspapers: Jeff Bezos, John Henry, and Aaron Kushner. My current project, very much related to what we're talking about today, is called, What Works: The Future of Local News. My coauthor Ellen Clegg and I are going to be looking at 10 or 12 successful independent news projects around the country to determine what lessons can be drawn from those.

frank | I want to start by talking about the billionaires and the hedge funds that have started to take over local news outlets. When do you see this trend start and why are people like Jeff Bezos getting involved in what seems to not BE a very profitable business? 

That's a great question. I think that when we started seeing people of means buying into the newspaper business, a lot of us were hoping that it would be a real trend. Even though the idea of billionaires buying newspapers is problematic in some respects, it certainly was a better fate for them than being squeezed to death by corporate chain ownership.

But, almost eight years out, we can see that it is not really a trend. Jeff Bezos and John Henry are almost alone. Aaron Kushner failed. Patrick Soon-Shiong joined them a few years later when he bought the LA Times, but, for the most part, we haven't seen very many other people join them. 

That brings about the question of why people like Bezos and Henry and Soon-Shiong got into the business.

I think it's partly ego. I think, in part, they saw it as a chance to make a real civic contribution. And I think they really, truly believed that the only thing the newspaper business was lacking was them.

This goes to their ego — they believe that what made them successful can be applied to the newspaper business.

Well, what we saw, most obviously with Aaron Kushner at the Orange County Register, is that the newspaper business is every bit as difficult as people were saying. At the Boston Globe, John Henry made all kinds of mistakes and continued to lose money. Only in the past couple of years, have they been able to settle on a strategy of really pushing digital subscriptions to stabilize The Globe. John Henry says it's profitable, but it is a privately held company, so who knows. In Bezos's case, absolutely nothing has happened to make him question his own genius, I guess. The Post has been a success almost from day one, growing and profitable for five to six years now. Bezos has proven that he was able to bring The Post back to a sustainable enterprise.

So do you think that Bezos’ success came down to technique or to infinite resources?

Well, he certainly had to put a lot of resources into it. He sensed that there was an opportunity for another big, national news organization. The Washington Post is traditionally more of a regional paper than a national paper, but he decided that they were going to go national and that they were going to go digital.

Then, of course, although Bezos owns The Post individually, it is not part of Amazon, he has leveraged it with Amazon.

A subscription is included with Amazon Prime at a steep discount. If you buy an Amazon Kindle Fire, The Post app is pre-installed on it. So, of course, he has had some unique advantages that have made it easier for him than it would for someone else. 

I think some of the immediate concerns that come up in this model are concerns over him or other billionaires using newspapers for propaganda. Do you see any evidence of that either from people you talked to at The Post or from specific stories?

No. I think both Jeff Bezos and John Henry have been good billionaires in the sense that they have not interfered with the news coverage of their papers. Bezos doesn't even interfere in the opinion pages and as the owner, it would not be unethical for him to do so. In fact, he kept the editorial page editor who he inherited, Fred Hiatt, and has left it alone. The Post has featured plenty of tough coverage of Amazon. Maybe not as much as The Times has had, but they certainly haven't shied away from it.

Now, of course, there are bad billionaires. As I was reporting for The Return of the Moguls, Sheldon Adelson, the casino mogul, acquired the Las Vegas Review-Journal. I talk about it in the book, but it was a wild, wild story in which he originally came in as the secret owner. It was the staff of the Review-Journal who was able to expose the fact that he was the new owner. And this is so complicated that I don't even know how to explain it, except that he ordered up a hit piece on a judge who was aggravating him, but it never appeared in the Review-Journal. Instead, it appeared in a couple of newspapers in Connecticut owned by a businessman Adelson had hired to help run the Review-Journal. That’s a case of a billionaire buying a legacy newspaper, putting resources into it, and using it to serve his own business interests.

That's crazy. What ended up happening, did he remain an owner once staff found out?

He continued to own the paper up until his death. I believe his family is going to continue to run the paper. I have read anecdotally that the result of his ownership has been kind of a mixed bag. I mean, he did put resources into the paper. It is probably doing a much better job of serving the community than it would have if it had been acquired by a chain or a hedge fund.

Why do you say that? What happens when a chain or a hedge fund comes in?

Well, when a chain or a hedge fund comes in, and basically we're talking about Alden Global Capital and Gannett since they are the two biggest players, they walk into newsrooms that have already had budgets cut over the years and just take a chainsaw to them. They cut in order to pay down debt that they've taken on to build the chain and they cut to enrich their owners; there's very little interest in journalism.

Does the difference between hedge funds and billionaires or philanthropists come down to a difference in profit incentives? 

Yeah. I mean, the billionaire owners who come in, generally consider themselves to be business geniuses. They don't want to run their newspapers at a loss, even though they could afford to, but they're not looking to do much more than break even. The chains and the hedge fund are looking for big profits. That's the only reason that they're in the newspaper business. And you might think, well, how can you make a big profit from the newspaper business, given all the problems that it has? Well, it turns out that if you are willing to cut without conscience, you can cut expenses faster than the revenues are falling and run up a fairly healthy profit margin. Alden’s Media NewsGroup, which owns about a hundred papers around the country, runs up a profit margin of about 17 percent.

Do you think that looking to philanthropists and billionaires is the most sustainable model of local journalism going forward?

Well, as I said when we opened, we haven't seen a rush of billionaires coming to save America's newspapers, so I don’t think so. There have been precious few. Not to say that there aren't some very good ownership models out there, but in terms of billionaires buying up newspapers, that's about the extent of it.

What models do you find most sustainable?

Well, there is a difference between the medium to large size newspapers that these billionaires are acquiring and the small, local papers that we will be looking at in our next book.

In the medium to large range, The Salt Lake Tribune is now a completely non-profit news organization, the first good size legacy paper to have taken that road. Now non-profit ownership is not all that novel in news, there are public TV stations, public radio stations, and a lot of the small hyper-local news websites that are out there, but for a big daily newspaper, that's very unusual. The Philadelphia Inquirer is a for-profit newspaper owned by a nonprofit organization, and they have done okay. They've had to make some cuts here and there, but they're still doing really good work and they don't have to answer to a corporate chain. Pretty much everything else is owned by chains at this point. 

Now to get down to the next level of real community journalism, the type of journalism that keeps tabs on the city council, the school committee, zoning, all those kinds of things, there are different models and more experiments going on. One we are looking at is the Mendocino Voice. It started about five years ago by two journalists and they are experimenting with the cooperative model. 

Why do you think it is important that we seek out these models to save local news?

Well, we live in communities, but it feels like everything has been nationalized today, and we are incredibly polarized at the national level. At the community level, people still have the skills they need to get along with each other, but they need news and information that's reliable to help them in that process.

I really think that reliable local news can help us overcome the polarization that we're dealing with these days.

In addition to that, it's just really important that we know what's going on at the local level. There have been studies that show that in communities without reliable news, there's more government corruption. You get people forming Facebook groups out of desperation to try to keep up on what's going on and it becomes rumormongering and scaremongering. I don't really believe that we have a true democracy unless we have participatory democracy at the local level. And it is impossible to have that participatory democracy unless we have reliable sources of local news.

Why do you think local news is more effective in dealing with polarization?

The old cliche is that there are no Republican and Democratic ways to pick up the trash. I think that everybody is concerned about the vacant lot in their neighborhood, and what's going to be built there, or is anything going to be built there. That is an issue that unites people. Zoning unites people. People want good schools and effective but humane policing. These are areas of common interest. I think that if people find that they can talk to one another, and work together on local issues, it may have some sort of a spillover effect to the intense feelings of alienation and polarization they feel on a national level. I think good local news can move us away from the problem of some of these incredibly divisive national issues by coming down to the local level. You start with Trumpers worried about certain things being taught in the school system, for instance. If school systems are well covered by reliable local news organizations, that could stave off some of those rumors about what is being taught.

Are you hopeful about the local infrastructure finding its footing and being built back up?

We are really in deep, deep trouble with so many of these news organizations being bought by chains and hedge funds. The projects that Ellen and I are highlighting and that we're optimistic about are very much an exception to the rule. I think all of us were devastated when Alden Global Capital was able to acquire Tribune Publishing recently. These continue to be very dark times for local and regional news. So no, I'm not hugely optimistic, but I do think that by showing places and projects where local news continues to be healthy, it can point the way toward a better future. Maybe we'll figure out some way of getting there in more and more communities.