A coordinated corporate attack on the free press

The Atlantic writes in an article entitled A Secretive Hedge Fund is Gutting Newsrooms about the intentional killing of local newspapers for profit and maybe other things. The article starts with a description of the Chicago Tribune's headquarters, which was completed in 1925. The tribune tower was a magnificent building designed by the best architects of the times. The Atlantic writes:

To find the paper’s current headquarters one afternoon in late June, I took a cab across town to an industrial block west of the river. After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. The scene was somehow even grimmer than I’d imagined. Here was one of America’s most storied newspapers—a publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizes—reduced to a newsroom the size of a Chipotle.

Spend some time around the shell-shocked journalists at the Tribune these days, and you’ll hear the same question over and over: How did it come to this? On the surface, the answer might seem obvious. Craigslist killed the Classified section, Google and Facebook swallowed up the ad market, and a procession of hapless newspaper owners failed to adapt to the digital-media age, making obsolescence inevitable. This is the story we’ve been telling for decades about the dying local-news industry, and it’s not without truth. But what’s happening in Chicago is different.

In May, the Tribune was acquired by Alden Global Capital, a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country. The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. Instead, they gutted the place.  

[Alden's two founders] are also defined by an obsessive secrecy. Alden’s website contains no information beyond the firm’s name, and its list of investors is kept strictly confidential. When lawmakers pressed for details last year on who funds Alden, the company replied that “there may be certain legal entities and organizational structures formed outside of the United States.”

The Atlantic goes to note that two days after Alden took control of the Tribune, it announced a round of employee buyouts that caused an exodus of journalists. Alden's corporate bloodletting got rid of the Metro columnist who reported on the problems that occupants of a messed up public-housing complex faced. The editor who maintained a homicide database that the police couldn’t manipulate was also pushed out. A quarter of the newsroom was eliminated. Major stories were no longer covered, including stories of corrupt politicians trying to sleaze their way out of legal troubles. Employee moral dropped and more professionals at the paper just gave up and resigned. 

For it’s part, Alden refuses to talk about what it had done or why. A former Tribune reporter commented that the Tribune was dying not because it could not stay alive. Instead, Alden was intentionally killing it: “They call Alden a vulture hedge fund, and I think that’s honestly a misnomer. A vulture doesn’t hold a wounded animal’s head underwater. This is predatory.” 

This was not something new for Alden. After the great recession, the hedge fund started buying newspapers and then later quietly gutted them. The point was profit. Alden’s business model was ruthless and directly on point. Gut the staff, sell the real estate, increase subscription prices, and wring out as much cash as possible before allowing the business to collapse. 

The Atlantic notes that in the past 15 years, more than a quarter of American newspapers have gone out of business. The survivors are smaller, weaker, and generally vulnerable to acquisition. Financial firms now control about half of all daily newspapers, according to an analysis by the Financial Times. That is likely to increase.

Randall Smith and Heath Freeman, the co-founders of Alden Global Capital devised and implemented the business model. They have been purely mercenary, with no interest in even pretending to care about their publications’ long-term vitality or service to the public interest. With this model, the newspapers can be profitable for a number of years before the business collapses.

Randall Smith

Heath Freeman -- claims he wants to save 

local news reporting (no one believes him)

The Atlantic comments on the consequences of the demise of local newspapers:

This investment strategy does not come without social consequences. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Misinformation proliferates. City budgets balloon, along with corruption and dysfunction. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news.

For laissez-faire capitalism and corrupt and/or authoritarian politics, it is undeniably important to control public information. It is thus easy to see why targeting and killing newspapers while profiting in the process would appealing to both corporations and politicians. Bad news gets suppressed, the public remains ignorant and plausible deniability for everything gets to run about as free and wild as unregulated markets and corrupt governments can devise.

The article is long and goes into details of how some local newspapers crumbled under the dead weight of Alden and, as one burned out reporter called them, “the lizard people” who control Alden. 

 

Questions: 

1. It is clear that both big corporations and dictatorship governments have things to hide and would thus would have a keen interest in seeing the corruption of US journalism into a gigantic sham. Therefore, is it reasonable to think that foreign enemies such as the Russian and Chinese governments are among the “certain legal entities and organizational structures formed outside of the United States” that invest in Alden? 

2. Is it reasonable to see what Alden is doing as inherently authoritarian, e.g., because the public becomes less informed and plausible deniability for crimes and fascism easier to deny in the absence of contrary information?

3. Would it be legal or illegal for a politician, billionaire, political party or corporation to secretly invest in Alden, and then ask it to kill a troublesome newspaper? After all, it’s just a business investment. [Seems legal to me.]