As the pandemic recedes in the United States, few businesses may emerge so transformed as local and regional newspapers. More than 70 local newsrooms have closed over the past 15 months, with hundreds of media jobs lost, as the already difficult financial conditions in the industry intensified during the crisis. By some estimates, a staggering 2,100 local newspapers, or one in four, have closed in the US since 2005. But into the carnage a new breed of owner has emerged: one that has industry veterans and media observers deeply worried about the future of journalism in America and its ability to act as part of a functioning democracy. According to a recent analysis, hedge funds or private equity firms now control half of US daily newspapers, including some of the largest newspaper groups in the country: Tribune, McClatchy and MediaNews Group.
When Jon Mitchell, the mayor of New Bedford, Mass., delivered his state of the city address in 2019, he made an unusual plea. “Support your local paper,” he said, referring to The Standard-Times, New Bedford’s daily newspaper. “Your city needs it to function effectively.” Owned by Gannett, the parent company of USA Today and more than 250 other dailies, The Standard-Times was getting thin. Like thousands of newspapers across the country, it was taking on the characteristics of a “ghost” paper — a diminished publication that had lost much of its staff, curtailing its reach and its journalistic ambitions. Now, two years later, the mayor’s assessment is more blunt.
Already, steps to strip cash from the business and lay off staff have begun. The Associated Press reports that Alden “wasted little time installing new leadership and saddling the newspaper chain with $278 million in debt it took on for the acquisition.” The new owners also are seeking to reduce staff levels by encouraging employees to accept a voluntary buyout. According to Keith Kelly of the New York Post, the buyout “provides eight weeks’ severance for all staffers with three years or less of service. It provides 12 weeks for staffers with four or more years and then one additional week’s pay for each year of service.”
With Alden Global Capital’s recent acquisition of the Tribune Publishing newspaper chain, the country has reached a troubling milestone: Half of the daily newspaper circulation in America is now owned by hedge funds. This is a real threat to democracy, because hedge funds and private equity firms have a track record of cutting the reporting staff of local newsrooms to increase profits. We must stop viewing this trend as inevitable. We need to confront it head on, including with public policies.
“One of the concerns and one of the realities for us probably is that however compensation is going to be directed, the media with the larger audiences will get a larger share of the compensation,” Rush said. The NewsGuild, a union representing more than 25,000 journalists, also is watching the bill. But the union refuses to support it until language is added to ensure that at least 60% of any additional revenue earned is tied to jobs, NewsGuild president Jon Schleuss said. The issue, Schleuss said, is that the journalism industry is seeing increasing consolidation, and many financial actors do not care about investing in local news. If the bill passes as is, news companies would not have a legal obligation to use money they earn to keep local journalists employed. “Whatever added revenue needs to be tied to jobs,” Schleuss said. “It can’t go to executive compensation. We can’t have stock buybacks, we can’t have dividends. It needs to go to jobs.”
NINE OF THE TEN newspapers that won Pulitzer Prizes for local reporting over the last decade experienced some form of cutbacks over the past year, according to data collected by the Tow Center and CJR. Three prize-winning outlets implemented layoffs, and four had their print runs affected, with pay cuts and furloughs scattered throughout. Some cuts have been restored; others haven’t. In many ways, these statistics are unsurprising; staggering numbers of local publications were shaken by the destabilizing effect of the pandemic, and few were left untouched. Still, it’s telling that even those papers that have won national recognition and acclaim for the importance and excellence of their journalism also found—and find—themselves on unstable ground.
In our research we found that less local news meant more polarization. Then, with a little luck, we were also able to study the other side of the coin — whether more local news could actually bring people together.

Our new research shows that the US government is notable among democratic nations for how little it funds its public media. This lack of investment is particularly troubling considering the connections we and other researchers have found between robustly funded public broadcasting systems and well-informed political cultures with high levels of support for and engagement with democratic processes. In short, this long-standing neglect has undermined potential benefits that other democratic countries take for granted.