Tag Archives: Alden Global Capital

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Could Sale of the Pamplin Media Group Threaten Local News?

The word is Pamplin Media Group, publisher of the Portland Tribune and 23 other local community papers in Oregon, is being shopped around for sale. 

Simultaneously, the Group is closing its Gresham Outlook printing facility and laying off its approximately 20 employees, an indicator of financial stress.

A Portland Tribune story noted earlier this year that the Pamplin Media Group “…has weathered numerous upheavals in the journalism business, three recessions that reduced advertising revenues and the COVID-19 pandemic that reduced revenues even more than the previous recessions.”

With all the bruising changes affecting the local newspaper industry, sale of the group may well lead to another upheaval. 

In early 2023, when Mark Garber handed off the position of president of the Pamplin Media Group to become president emeritus, he commented that when he’d started his newspaper career as a reporter in 1979, “We used manual typewriters and handed our copy to an editor, who marked it up, literally cut and pasted it, and then sent it to a human typesetter.”

The changes in the local newspaper business since those days have been massive, butchering a once robust news ecosystem in the United States.

The loss of local news has had far reaching implications. “As everyone knows, the internet knocked the industry off its foundations, ” James Bennet,  former editorial page editor at The New York Times, wrote in The Economist in mid-December. “Local newspapers were the proving ground between college campuses and national newsrooms. As they disintegrated, the national news media lost a source of seasoned reporters and many Americans lost a journalism whose truth they could verify with their own eyes.”

Just since 2005, the country has lost one-third of its newspapers and two-thirds of its newspaper journalists. So far in 2023, an average of 2.5 newspapers have closed each week according to a State of Local News Report by Tim Franklin, Senior Associate Dean and John M. Mutz Chair in Local News and Director of the Medill Local News Initiative at Northwestern University.  Most were weekly publications, in areas with few or no other sources for news.

“The underlying infrastructure for producing local news has been weakened by two decades of losses of newsrooms and reporting jobs,” noted an October 2022 report from the Agora Journalism Center at the University of Oregon’s School of Journalism and Communication. “And news organizations today…often sense they are swimming against the tide of economic, technological, political, and cultural changes that threaten the long-term viability of local news production.”

In Oregon’s current troubling time, when misinformation is on the rise, the civic damage from a decline in trusted, quality local newspaper coverage can be particularly severe. Even more so when local papers rip more of their content from national news outlets or run stories to satisfy distant corporate owners. “Communities that lack robust local news also tend to experience lower rates of civic engagement, higher rates of polarization and corruption, and a diminished sense of community connection,” the report said.

The recent acquisition of many legendary local newspapers by hedge funds and private equity groups shows what could await the Pamplin Media Group. 

The Register-Guard in Eugene was locally owned until 2018 when it was sold to GateHouse Media Inc.  In 2019, GateHouse Media’s parent company, New Media Investment Group, acquired Gannett, the parent company of USA Today and more than 100 other dailies, creating the largest newspaper company in the country, with the combined company adopting the Gannett name. 

Management of the new company was left to Fortress Investment Group, a private equity firm in New York City. Fortress, which controlled New Media Investment Group, the parent of GateHouse, was owned by SoftBank, a Japanese conglomerate. 

There were about 21,255 employees at Gatehouse and Gannett at the time of the merger; Gatehouse had 10,617, Gannett 10,638. Gannett has since dramatically cut costs, reducing its headcount to 11,200 at the start of 2023.

Over the years, the Register-Guard has suffered right along with Gannett. At the time of its sale to Gatehouse in 2018 the Register-Guard had over 40 employees. Its website currently lists just 3 News reporters, 3 Sports reporters and 1 Multimedia Photo Journalist. Hardly enough for robust local coverage.

The Alden Global Capital hedge fund is another company eviscerating local newspapers. Alden, which owns about 200 publications, including the Chicago Tribune, is the second-largest newspaper publisher in the country, behind Gannett. Alden is perhaps best known for acquiring and then gutting the Denver Post.

In July 2023, Los Angeles billionaire Dr. Patrick Soon-Shiong sold The San Diego Union-Tribune to an affiliate of the MediaNews Group, which is owned by Alden, for an undisclosed amount. The Voice of San Diego called Alden “the most terrifying owner in American journalism” and said the sale put the Union-Tribune “back in the American newspaper doom loop.” 

Word of cutbacks was swift. The same day as the sale announcement, the MediaNews Group sent an email to the paper’s employees saying cutbacks would be needed to “offset the slowdown in revenues as economic headwinds continue to impact the media industry” and informing staff that the new owner would be offering buyouts. If enough employees didn’t take buyouts, the company said it would lay off additional employees. 

As of the end of October 2023, employees estimated that somewhere between 60 and 80 people were left from the 108-person newsroom under Soon-Shiong.

The Voice of San Diego said the sale of the Union-Tribune to Alden put it “back in the American newspaper doom loop.” Let’s hope the sale of Pamplin Media Group doesn’t put its community newspapers in the same place.

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Build Back Better’s Subsidy of Local Newspapers: a big Mistake

Print Your Custom Newspaper | PRINTNEWSPAPER

Once upon a time, printed newspapers serving local audiences were in high demand.

But over 2200 newspapers in the United States have closed in the past 15 years and the carnage continues. 

Circulation has declined drastically. Pay has been cut. Advertising revenue has plunged. Newsroom employment has plummeted. The vast majority of remaining print newspapers have a circulation of less than 15,000, according to a review by the University of North Carolina’s journalism school.

It’s a grim picture, made worse by the fact that, as Harvard’s Shorenstein Center has pointed out, “Printed newspapers are a manufacturing business. For some, the non-newsgathering cost structure can be the majority of total operating expense. This means that in a world of declining demand for print editions of local newspapers, legacy costs become an increasing share of declining revenue. Much of the underlying reality of the current market failure for local news coverage can be traced to this simple fact.”

But the newspaper industry and some members of Congress think they have found a solution — a federal taxpayer bailout.

This is the wrong solution. And, frankly, it’s embarrassing.

America’s journalism industry, which until now has prided itself on its independence, got a tax break in the Build Back Better bill passed by the House on Nov. 19.

The bill would provide a payroll tax credit for companies that employ eligible local journalists. The measure would allow newspapers, digital news outlets, and radio and television stations to claim a tax credit of $25,000 the first year and $15,000 the next four years for each of up to 1,500 journalists. 

The theory is this would incentivize some publishers to hire or retain local reporters. The Democrats project the cost of putting journalism outlets on the public dole will be $1.7 billion over the next five years, with an estimated $38 million of that injected into approximately 113 newsrooms in Oregon.

Supporters say there will be guardrails to prevent the tax breaks from going to partisan or fake-news sites. Good luck.  The battles over eligibility will be never-ending.

I’m a former newspaper reporter and the struggles of local print news in our Internet-juiced landscape are undeniable, but why print journalism enterprises, or other journalism forms, deserve taxpayer bailouts like this is beyond me. And, unfortunately, you are not likely to read about criticisms of the bailout in your local paper. No surprise there.

Some tax credit supporters argue that government support for media goes back a long way, that the two have always been joined at the hip, so this new idea just continues long-established practices. The latest help is the pandemic-related small business loan program, for example, provided millions to news organizations.

Fundamentally, this argument is that print media already get some subsidies so they should get more. A dubious assertion that too many are willingly embracing.

Media figures also argue that the Build Back Better subsidies will only be temporary anyway. But let’s be honest. When was the last time you saw a government subsidy discontinued?[1]

It’s a given that when the subsidy ends in five years, newspaper publishers and others raking in the subsidies will be back in Congress hat in hand seeking an extension. The Congressional Budget Office estimates that if the subsidies continue for ten years, the cost will be $3 billion, far from small change. 

It’s also defies logic that taxpayers should subsidize already well-off newspapers. 

One of the vocal tax-break supporters, for example, is The Washington Post, owned by tech billionaire Jeff Bezos since 2013. According to Americans for Tax Reform,  if the tax break becomes law, Gannett, one of the nation’s largest remaining newspaper chains, could gain as much as $127.5 million in tax benefits over five years.

And why should the government give breaks to papers owned by super-rich hedge funds? 

Hedge fund Alden Global Capital, for example, is one of the country’s largest newspaper owners. It has been buying up newspapers, imposing draconian cost cuts, and implementing widespread layoffs. Its current target is the local newspaper chain Lee Enterprises, whose Oregon titles include the Albany Democrat-Herald, the Corvallis Gazette-Times and the Lebanon Express. 

Local print newspapers have been a key element of our civic life for generations, but Build Back Better’s tax breaks are not the solution to the challenges they face. And despite the special show of neediness among many newspaper people these days, we won’t be doing them a favor if we succumb to their pleading.

Maybe a little creative destruction is in order, instead.

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[1] The situation with the federal child tax credit (CTC) is a classic example of the never-ending subsidy.  The CTC is not new, but it was expanded in the March 2001 American Rescue Plan (ARP). Before the ARP, parents were eligible to receive up to $2,000 in tax credits every year for each child under 17 they claim as a dependent. The benefit began to phase out at $200,000 of annual income for single filers and $400,000 for married couples filing jointly. Families had to earn just $2,500 a year to qualify. Parents claiming the credit would receive it as one single refund at tax time, and the credit was partially refundable, meaning families with a tax burden smaller than the size of their credit could still receive up to $1,400 per child.

The ARP increased the program’s benefits, raising the maximum credit to $3,000 for every child aged six to 17, and $3,600 for children under 6. The new credit was fully refundable. In 2021, half was paid out in monthly installments, with the rest to be meted out in families’ annual tax return. 

The ARP expanded the CTC only through 2021. Democrats figured it would prove to be so popular they could extend it indefinitely. So far, they haven’t been able to secure enough votes to do so, but efforts to do so were still underway at the end of 2001.