To tell the recent story of print journalism, you could do worse than to consider the Austin American-Statesman.
Owned by the Cox Media Group since the mid-1970s, the Statesman was sold in 2018 as its parent conglomerate sought to spin off dozens of newspapers, along with radio and television stations.
In 2018, GateHouse Media bought the Austin paper. GateHouse was a nationwide publisher with a reputation for cost-cutting. Now, barely a year later, GateHouse and its 144 daily newspapers have merged with Gannett, creating the largest newspaper publishing company in the United States, and sparking fear about future cuts to reporting budgets driven by the holding company’s bottom line.
While the internet-driven disruption of the news industry is well documented, the role of private equity in the hollowing out of journalism is just now beginning to draw as much attention. Is quality journalism compatible with a profit motive?
The Standard’s Laura Rice spoke with Kathleen McElroy, director of the University of Texas at Austin’s School of Journalism, and industry analyst Ken Doctor, who tracks the intersection of news and business at Nieman Lab and at newsonomics.com.
Doctor says quality journalism can exist in environments where corporations need to make money.
“We have decades of proof in the Western world, including the U.S., that for-profit newspapers used to make really handsome profits – 20%, 25%, 30% a year – and were able to serve their communities very well,” Doctor says.
And news consumers received better coverage 20 years ago than they do today, Doctor says.
McElroy says journalism has always been a business, and objectivity and quality journalism have even been selling points for news companies.
“You don’t have to be for-profit and anti-quality news,” McElroy says.
What’s changed is the “free fall” of advertising revenue, much of which has moved online to organizations like Facebook and Craigslist.
Newspaper readership, which drives advertising, has been on the decline for a decade.
“There hasn’t been any growth in the newspaper industry since 2008,” Doctor says.
Investor-driven companies that own newspapers have not reinvested in the journalistic product, Doctor says, exacerbating the decline.
McElroy says journalism has had other problems in recent years, too, including issues with diversity and tolerance of sexual harassment.
“Because journalism saw itself as special, it looked at its journalistic product without looking at itself as a business that needs to be managed,” she says.
Doctor is skeptical of the nonprofit news model as a way to salvage quality local journalism.
“Texas Tribune is an outstanding model,” he says. “But clearly, The Texas Tribune model is a statewide model, not a local model, and it is doing one of the richest states. And they’ve been extremely good at fundraising.”
Doctor says there is a way to deliver local journalism if it’s delivered in a digital-only format. McElroy says the time and work required to obtain the money needed to fund journalism on a nonprofit basis is beyond the means of local news organizations.
“Every town doesn’t have a ballet company,” McElroy says. “And if you see journalism as being a nonprofit model, it’s like funding the local ballet.”
Doctor says news organizations with local owners with a long-term commitment to the news business are in the best position to succeed and continue providing quality journalism.
Written by Shelly Brisbin.