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In this specific case the hedge fund already admitted that they were syphoning off profits from their newspapers to finance totally unrelated ventures: https:/

by untog 9y ago

In this specific case the hedge fund already admitted that they were syphoning off profits from their newspapers to finance totally unrelated ventures: https://dfmworkers.org/hedge-fund-alden-siphoned-100s-of-millions-from-newspapers-in-scheme-to-gamble-on-other-investments-suit-says/ https://dfmworkers.org/hedge-fund-alden-siphoned-100s-of-mil... Unrelated, but the execs of Tronc, another multi-newspaper owner, have massive salaries and perks that in no way match the current state of the business: https://latguild.com/news/2017/11/21/private-jets-and-golden-parachutes-the-la-times-guild-asks-where-is-the-money https://latguild.com/news/2017/11/21/private-jets-and-golden... > Which financial decisions will keep high numbers of employees and high quality journalism...with decreasing ad revenue? Pivoting to subscriber revenue. I suspect a lot of companies will be learning this lesson in time. No doubt newspapers needed to shrink compared to their size a decade or two ago, but I really don't think the outlook for many needs to be so dire. I'd much rather see newspapers experiment with becoming a non-profit than be owned by a hedge fund that'll eat them alive.

DrScump 9y ago
syphoning off profits They were allegedly siphoning off assets. Were those papers even making any profit? The concept reminds me of the story arc in "The Sopranos" where the mob looted the sporting goods chain to collect on the gambling debts of its owner.
- cptskippy 9y ago
  Assets are invested profits. In either case it's a revenue stream the paper might have leveraged to sustain it while it pivoted into a new model. Instead the Headgefund raiders have done to it what they've done with so many other businesses. They undervalued it, bought it at a discount, disassembled and sold off the profitable bits, left an empty encumbered husk to default on outstanding debts. This behavior should be illegal.
black_puppydog 9y ago
> No doubt newspapers needed to shrink compared to their size a decade or two ago Interesting statement... Do you mean this in the sense that "it is/was obvious that they'd be hit hard by social media etc" or do you believe there was somehow too much news being produced?
- untog 9y ago
  I was more thinking that it was inevitable that the internet would disrupt the classified ads market, which IIRC gave newspapers a ton of revenue and made them into bigger companies than they probably needed to be. Many of them were undeniably badly run.
- JamesLeonis 9y ago
  The other commenter mentioned classifieds, but newspaper's main business changed with Online. Before they were natural land monopolies with only one (or a few) outlets. Most people in the region received their news this way. In the last 20 years, both cable TV and online news have replaced many people's sources, which turned into declining paper revenues. When the newspaper tried moving online, it's land monopoly was gone and people had far more choice in news. This decimated their advertising department. FB and others added fuel to this fire. So the trifecta is as follows: * Declining physical paper subscriptions * Loss of classified ads * Diminished revenues from loss of advertising and land monopoly By these powers combined most newspapers are being decimated.

by untog 9y ago

DrScump 9y ago

syphoning off profits They were allegedly siphoning off assets. Were those papers even making any profit? The concept reminds me of the story arc in "The Sopranos" where the mob looted the sporting goods chain to collect on the gambling debts of its owner.

cptskippy 9y ago
Assets are invested profits. In either case it's a revenue stream the paper might have leveraged to sustain it while it pivoted into a new model. Instead the Headgefund raiders have done to it what they've done with so many other businesses. They undervalued it, bought it at a discount, disassembled and sold off the profitable bits, left an empty encumbered husk to default on outstanding debts. This behavior should be illegal.

black_puppydog 9y ago

> No doubt newspapers needed to shrink compared to their size a decade or two ago Interesting statement... Do you mean this in the sense that "it is/was obvious that they'd be hit hard by social media etc" or do you believe there was somehow too much news being produced?

untog 9y ago
I was more thinking that it was inevitable that the internet would disrupt the classified ads market, which IIRC gave newspapers a ton of revenue and made them into bigger companies than they probably needed to be. Many of them were undeniably badly run.
JamesLeonis 9y ago
The other commenter mentioned classifieds, but newspaper's main business changed with Online. Before they were natural land monopolies with only one (or a few) outlets. Most people in the region received their news this way. In the last 20 years, both cable TV and online news have replaced many people's sources, which turned into declining paper revenues. When the newspaper tried moving online, it's land monopoly was gone and people had far more choice in news. This decimated their advertising department. FB and others added fuel to this fire. So the trifecta is as follows: * Declining physical paper subscriptions * Loss of classified ads * Diminished revenues from loss of advertising and land monopoly By these powers combined most newspapers are being decimated.