New Media Barons and the Emerging Threat of News Deserts

Date/Time
Date(s) - 11/10/2017
12:30 pm - 1:45 pm

Private equity funds, hedge funds and other large investment groups have been aggressively buying and managing local newspapers in recent years, raising questions about the vitality of community journalism and the future of democracy at the grassroots levels, according to a recent report issued by the UNC School of Media and Journalism’s Center for Innovation and Sustainability in Local Media.

On  Friday, Nov. 10, the  UNC  Center for Media Law and Policy will host an interdisciplinary lunch open to faculty and graduate students from across the  UNC  system. The lunch will be led by Professor Penelope Muse Abernathy, author of the report and Knight Chair of Journalism and Digital Media Economics in the School of Media and Journalism. Abernathy, a former executive at The Wall Street Journal and The New York Times, is a journalism professional with more than 30 years of experience as a reporter, editor and senior media business executive. She specializes in preserving quality journalism by helping the news business succeed economically in the digital environment.

“The Rise of a New Media Baron and the Emerging Threat of News Deserts” reveals previously undocumented ownership and financial trends over the past decade, a period of immense disruption and distress for the entire newspaper industry.
Because the primary mission of the new newspaper publishers is to make money for their investors and shareholders, the report explores the possibility that many communities may soon lose their primary source of local news, leaving behind news deserts across entire regions of the country.

“For more than 200 years, newspapers have been an indispensable auditor of democracy at all levels,” said Professor Abernathy. “By documenting the seismic changes in newspaper ownership, this report seeks to raise awareness about the multiple challenges confronting local news organizations, and the impact the loss of newspapers can have on the health and vitality of communities throughout the country.”

The report is based on analysis of data from 2004 to 2016, collected on more than 9,500 local newspapers. Here are some of the findings:

• Since 2004, more than a third of the country’s newspapers have changed ownership, some sold two or more times.
• The largest newspaper companies are larger than ever, and still growing. Some of the largest chains have been assembled by investment fund managers, with newspapers representing only a fraction of their vast business portfolios.
• The largest investment groups tend to employ a standard formula in managing their newspapers – aggressive cost cutting paired with financial restructuring.
• Most newspapers owned and operated by investment groups are located in economically struggling small and mid-sized communities where the newspaper is the primary source of local news.
• Newspapers must adapt to the digital age to remain viable community builders. This will require a significant investment by newspaper owners and a long-term commitment to struggling communities, not a short-term earnings focus.
• Without significant fresh investments by the new owners, the bond between newspapers and their communities will erode, with numerous small cities and towns facing the real threat of becoming news deserts.
• Actions can be taken now by interested parties to address the issues and ensure that community news organizations continue to provide the news that feeds democracy.

Abernathy’s upcoming book, The Strategic Digital Media Entrepreneur, co-authored with the Knight Chair in Digital Advertising JoAnn Sciarrino, will be published by Wiley Blackwell in Summer 2018. The book builds on the findings in her report and previous book, Saving Community Journalism: The Path to Profitability (UNC Press: 2014). Through extensive research, the authors seeks to thwart the potential rise of news deserts by developing business models and strategies for all types of local news organizations – from smallest to largest – serving affluent communities, as well as those that are economically struggling.

The Center will provide lunch to those who register below by Wednesday, Nov. 8.

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