How hedge funds took over America’s struggling newspaper industry

When Covid-19 flourished across the United States in 2020, local newsrooms across the country cut back – even though they covered the biggest story in decades.

“As far as readers are concerned, we saw it rise during the pandemic,” Emma Way, editor of Axios Charlotte, told CNBC. “So at the same time as revenue was falling, readers were rising. It was a kind of dilemma that I’m sure many news organizations faced.”

Journalists were fired and fired. Some who stayed were offered buyouts.

It was a catastrophic and uncertain time for American newsrooms.

During the pandemic, more than 70 local newsrooms closed across the country. This includes newspapers that have served their community for decades. These papers are often closed at short notice.

But the problem existed long before the pandemic.

Since 2004, about 1,800 American newspapers have been closed. Newspapers have struggled to make money with the collapse of print ads as the readership moved online. Thereafter, the digital advertising market quickly became dominated by tech companies like Google and Facebook.

Today, some of the largest newspaper groups in the country – such as Tribune, McClatchy and Media News Group – are owned, controlled by or in debt to hedge funds or private equity groups. In fact, hedge funds and other financial firms control half of the newspapers in the United States, according to a recent analysis by the Financial Times.

Watch the video above to find out what it means for the newspaper industry and the steps some newsrooms have taken to survive.

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