Twenty years ago, you could go onto a CTA train and see a forest of newspapers—the suits reading the Chicago Tribune and The Wall Street Journal, blue-collar workers with the Sun-Times, young adults holding Red Eyes and Readers.
Now everyone’s on their phones—looking at TikTok and streaming Netflix dramas and headlines of varying reliability from all over. There’s little possibility of a conversation over a local column. There are fewer sources of good, shared information, and a disturbingly large portion of the voting public has decided that facts are what you want them to be.
What happened? The conventional wisdom is that the rise of the internet led to the fall of advertising dollars for newspapers, which led to their decline.
But in “Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy,” Margot Susca argues that the story is more nuanced, and conventional wisdom is wrong. While the rise of the internet did hurt ad revenue, papers can still be profitable. U.S. newspapers were still making $20.9 billion in revenue in 2021, despite the ravages of eBay and Amazon.
What really is killing journalism is private-equity greed, Susca writes. Private-equity firms and vampiric hedge funds like Alden Global Capital, which has its fangs in the Tribune, are the villains in this tale. They are killing newspapers through complete indifference to the purpose of journalism, laying off staff, running profitable businesses into bankruptcy, and paying themselves enormous fees for their slaughter, Susca argues. As a result, society’s watchdogs are being silenced.
“What we have is not a crisis of profit,” writes Susca, an assistant professor in journalism at American University. “What we have is a crisis of greed and growing inequality.”
Susca reviewed thousands of pages of financial documents and conducted more than one-hundred interviews with former and current journalists and newspaper subscribers to examine what happened.
The carnage is incredible—the Tribune alone spent $400 million in fees related to its bankruptcy, instead of investing it in journalism, Susca notes. Management fees and bonuses for executives gobble up revenue. Somebody’s profiting from newspapers, just not the reporters and readers. Susca makes the important point that companies have been so busy swapping around money that they did not adequately invest in digitalization and adapt to the internet—which could have made the news business better and more profitable in the long term.
It’s a weird story—normal people dutifully paying off their car loans will have a hard time comprehending how private-equity buccaneers can profit by destroying the businesses they buy. And Susca doesn’t make it easy—while her research is thorough, the writing is often ponderous and overly stuffed with quotes from financial documents and other authors, along with too many “show your work” statements about her research. It would have been great to have some clearer explanations of how all this financialization works—the way Margot Robbie explained mortgage-backed securities from a bubble bath in the 2015 movie “The Big Short.” More anecdotes and color would also have helped.
Despite the sometimes awkward presentation, the book makes a good case that the combination of bad mergers, bankruptcies, inadequate government regulation, and the drive for excessive profit has created a crisis for democracy. It’s a tale to make your blood boil. Charles Lewis, founder of the nonprofit Center for Public Integrity and Investigative Reporting Workshop, said that a journalist’s job is to “investigate the bastards”—and because of the hedge funds, there are fewer and fewer reporters left to do this.
A Northwestern University study last year found that an average of 2.5 newspapers closed each week in 2023, and 43,000 journalists lost jobs over the past two decades—either through layoffs or the simple inability to take the continuing stress of lost benefits and increased workload. As former reporter and editor Kristen Doerschner told Susca, “It was one indignity after the next. We never hit bottom. It was why I ultimately left. I couldn’t keep falling anymore.” (Personal disclosure: I left the Tribune in 2020 after Alden started increasing its stake.)
Books about modern disasters like climate change tend to end with a note of hope, looking for green shoots in the arid soil, and Susca’s is no exception. She views with optimism the growth of nonprofit news organizations like The Salt Lake Tribune or independent for-profit news outlets like Defector. (Locally, Block Club Chicago, the Reader, and the Chicago Sun-Times are nonprofits.) She also praises the good journalism still being done at papers weakened by private equity. She concludes that a return to media operating in the public interest is possible and in demand, and that “all eras must end.” For the sake of democracy, the era of private investment fund control of newspapers can’t end too soon.
“Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy”
By Margot Susca
University of Illinois Press, 232 pages
Mary Wisniewski is a Chicago writer and author of “Algren: A Life.”