Newspaper subscriptions have spiked since Donald Trump’s election as people like John Oliver plead for support for newspaper journalism. But if Wall Street vulture capitalists starve our newspapers to death, what’s the point?
See if you can follow me on this: My local New Bedford Standard-Times is owned by GateHouse Media (formerly Liberty Group Publishing), which after bankruptcy was reorganized under New Media Investment Group, Inc., which is owned by private equity giant Fortress Investment Group LLC with $70.2 billion in assets. The Standard-Times has lost several key reporters recently, including Kathleen McKiernan to the Boston Herald, Auditi Guha to Rewire News, and Mike Lawrence and Sandy Bowles to public relations jobs. That’s on top of several other recent editor layoffs.
It’s part of a long trend shrinkage at the hands of its Wall Street owners, and that’s not a metaphor – the newspaper has physically gotten smaller and much of the newspaper building is now leased to a bank. I can’t even tell you how bad it’s gotten because they stopped listing the reporters on the website:
OK, I can tell you: It’s bad.
You’d think with all those cutbacks that the newspaper business wasn’t profitable. You’d be wrong:
Kirk Davis, New Media’s 54-year-old chief operating officer, reported total compensation of $2.1 million in 2015, which included $500,000 in base pay, a $600,000 bonus and $1 million in stock awards, according to a recent regulatory filing. Davis is the only executive in New Media that reported total pay in the company’s annual proxy statement.
In 2014, Davis earned a little more than $917,000 in total pay, including a $400,000 bonus.
New Media said in the filing that the firm gave Davis the bonus because of New Media’s strong financial performance in 2015.
The company, one of the largest publishers in the country with 490 publications across 31 states, reported $1.2 billion in revenue and $67.6 million in profit last year — compared with $652 million in revenue and a loss of $3.2 million in 2014.
Meanwhile, the company keeps buying more newspapers. And in fact the company is hiring … but not reporters or editors. Instead, they’re loading up on digital ad sales reps to sell ads on their glorious new website, which auto-plays random news videos whether you want it to or not.
To recap: Wall Street investors think hiring reporters to keep its $5/week subscribers happy is bad business, but hiring digital ad sales reps to sell ads at $0.01/visitor is good business. I don’t need to turn the page to A5 to know how this story ends.
Oh, and at the end of that article is this nugget:
Earlier this year the company was in the news when it sold the Las Vegas Review Journal for a hefty profit to casino magnate Sheldon Adelson, after only recently acquiring the property themselves. The now Adelson-owned Review Journal endorsed Donald Trump on October 22, the largest newspaper in the US to do so.
I’ve shifted my Standard-Times subscription to Sunday-only and am now getting the Boston Globe four days a week. The Globe’s ownership is no less profit-driven, but at least I get an actual newspaper for my money.