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Opinion: Local news: A victim of financial giants?

Are “local” U.S. newspapers going the way of the dodo? The dodo was a flightless bird, native to the island of Mauritius, last seen in the late 16th and early 17th centuries when it was hunted by Dutch sailors. In more recent times, it has become the symbol of extinction and obsolescence.

As people who have read this column since 1999 know, I have been a champion of print news ever since I got on my bicycle to deliver the Brooklyn Eagle, at age 12. I firmly believe that both giant nationally-distributed papers like the New York Times or the Washington Post and those that are locally owned, like the Madera Tribune, are necessary not only for the edification of the public, but also for the maintenance of our democracy.

Newspapers and the republic

During colonial times, newspapers were originally a “sideline” for printers, but they became a major political force, advocating America’s independence from Great Britain. After the formation of the United States, newspapers were “subsidized” by the U.S. Postal Service Act of 1792, and papers were delivered by mail locally (within 100 miles) for a penny and elsewhere for 1.5 cents.

During the 19th century, many newspapers became advocates for political parties and/or vehicles for the betterment of society. Horace Greeley, editor of the New York Tribune and its guiding force from 1841 until his death in 1872, wrote, “We cannot afford to reject unexamined any idea which proposes to improve the moral, intellectual, or social condition of mankind.”

But, newspapers had to go through a process of evolution to become the unbiased sources of information that was expected during the 20th and 21st centuries. There was a period of “yellow journalism,” during which certain papers sensationalized the news in order to increase circulation. Toward the end of the 19th century, Joseph Pulitzer and William Randolph Hearst used the power of the press to convince national leaders to declare war against Spain.

During the first half of the 20th century, many papers availed themselves of “chains,” or newspaper services like the United Press (UP) or Associated Press International (API). And, by 1970, television news began to cut into print circulation for newspapers at every level of publication.

News, financial corporations

In recent times, however, many local newspapers have been taken over by financial corporations. People here in the Central Valley of California may be aware that some local papers have been owned by large entities, like The McClatchy Company. But, that particular organization was founded by people who came from a rich newspaper history and tradition.

C.K. and V.S. McClatchy, sons of an early editor of the Sacramento Bee, founded the company in the 1920s. A century later, the organization owned 30 daily newspapers in 15 states, including the Sacramento Bee, Modesto Bee, and Fresno Bee. Then a week ago, The McClatchy Company was sold to Chatham Asset Management, a New Jersey hedge-fund operation.

When I read about this transaction, my first thought was that local management of the papers would be consolidated, and staff, including reporters, would be reduced. This opinion was based on the fact that when Chatham acquired control of Postmedia, which publishes The Vancouver Sun, The National Post, and several other Canadian papers, it cut the total workforce, shut down papers across Canada, reduced salaries and benefits, and centralized editorial operations so that its 106 newspapers became clones of each other.

The problem, as I see it, is that hedge funds do not exist “to improve the moral, intellectual, or social condition of mankind,” as Horace Greeley put it, but rather to generate profit and bolster the economic bottom line. For example, after its acquisition by Chatham, Postmedia has cut more than 1,600 employees in Canada, including one-third of the staff of The National Post and half the staff at The Vancouver Post and The Province.

The question in my minds now is: Will this happen in the Central Valley? My guess is that it will. Hedge funds and other corporations have become a force in the news industry. Alden Global Capital, another hedge fund, controls about 200 outlets through MediaNews Group, one of which is the Bakersfield Californian. It has cut expenses by reducing the number of reporters and editors, and diminishing local news coverage.

In at least one case, the ultimate ownership of a newspaper may be so far removed from the region of publication that local news may be seen as being inconsequential. Gannett Company, Inc., headquartered in McLean, Virginia, is the largest U.S. newspaper publisher as measured by total daily circulation. It publishes USA Today, the Arizona Republic, and 250 other newspapers.

However, Gannett is controlled by Fortress investment Group, a private equity fund. And, in 2017, Fortress was acquired by SoftBank Group Corporation, a Japanese multinational conglomerate holding company headquartered in Tokyo. SoftBank has operations in broadband, e-commerce, the Internet, fixed-line communications, technology services, media and marketing, finance, semiconductor design, and other areas.

With hedge funds and gigantic organizations owning newspapers, I worry about the future of journalism and the vision of the founders of our local newspapers.

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Jim Glynn is a retired professor of sociology. He may be contacted at

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