4 ms·

The Hard Truth at Newspapers Across America: Hedge Funds Are in Charge

37 points by petethomas 8y ago

vinceguidry 8y ago
It almost seems as if the natural pathway for any industry is to wind up under the control of money people almost the second unit economics are even perceived to be turning unfavorable. But this group of people is almost uniquely unmotivated to be responsive to public need. Almost every day you hear stories in the news about the depredations of the financial industry ruining people's lives, half of the time completely unnecessarily. The LBO failures of Toys'R'Us and Clear Channel come to mind. My intuition tells me that once they're perceived to be doomed, internal politics wrecks these businesses far more quickly than the market does. Nobody wants to even bother to save them, and so they go looking for a financial wizard (necromancer?) for salvation. The lack of vision in corporate leadership these days is just really sad. Almost makes me long for the days of robber barons. At least they seemed motivated to save companies and actually work towards the future rather than just siphon off profits for yet another yacht.
dm8 8y ago
Internet disrupted the newspaper industry. Decentralization of information happened with Internet and need for centralized information sources (newspapers, TV networks etc.) has lost it's value. Secondly, newspapers didn't transform themselves (especially their biz models) for new medium. I work in monetization tools and trust me how frustrating it is to work with media companies (especially newspapers). They need strong CTOs/technical leaders to take right technical decisions and even if we suggest some right way of doing something technically we get ignored since they are all ignoring long terms gains for short term revenues. Invariably, they will sacrifice user experience for short term revenue. I have sympathy for them and I genuinely believe we need strong journalism especially on local level where we need more accountability and oversight. However, I believe missed the boat on digital transformation and now PE/hedge funds are their to extract whatever they can get.
- dragonwriter 8y ago
  > Internet disrupted the newspaper industry. It gets way to much credit for this; the terminal decline of that industry began a couple decades before widespread public use of the internet.
  - Analemma_ 8y ago
    That's... exactly the opposite of true. Newspaper industry profits peaked in 2004.
    - danso 8y ago
      Depends how you look at it. Newspaper profits were at their highest in that period, but only because the industry had been ravished by radio and TV in the past decades. By 2004, it was extremely rare for a city (other than the very biggest) to have more than one newspaper. In past decades, most cities had multiple newspapers, including morning and afternoon papers. The newspapers that survived to be the only dog in town effectively had a monopoly in classified and print ads. That's why profit margins were so huge -- but there were far fewer players in the game.
    - dragonwriter 8y ago
      A number of other measures of the health of the industry has been in decline since at least the mid-1980s and the subject of much media commentary; 2004 is just when the trend of consolidation and cost cutting (usually involving destroying local newsrooms as chains for bigger) that had been going on since, IIRC, the 1970s abd was the main thing blamed for that decline was no longer able to keep profit growth positive.

37 points by petethomas 8y ago

It almost seems as if the natural pathway for any industry is to wind up under the control of money people almost the second unit economics are even perceived to be turning unfavorable. But this group of people is almost uniquely unmotivated to be responsive to public need. Almost every day you hear stories in the news about the depredations of the financial industry ruining people's lives, half of the time completely unnecessarily. The LBO failures of Toys'R'Us and Clear Channel come to mind. My intuition tells me that once they're perceived to be doomed, internal politics wrecks these businesses far more quickly than the market does. Nobody wants to even bother to save them, and so they go looking for a financial wizard (necromancer?) for salvation. The lack of vision in corporate leadership these days is just really sad. Almost makes me long for the days of robber barons. At least they seemed motivated to save companies and actually work towards the future rather than just siphon off profits for yet another yacht.

dm8 8y ago

Internet disrupted the newspaper industry. Decentralization of information happened with Internet and need for centralized information sources (newspapers, TV networks etc.) has lost it's value. Secondly, newspapers didn't transform themselves (especially their biz models) for new medium. I work in monetization tools and trust me how frustrating it is to work with media companies (especially newspapers). They need strong CTOs/technical leaders to take right technical decisions and even if we suggest some right way of doing something technically we get ignored since they are all ignoring long terms gains for short term revenues. Invariably, they will sacrifice user experience for short term revenue. I have sympathy for them and I genuinely believe we need strong journalism especially on local level where we need more accountability and oversight. However, I believe missed the boat on digital transformation and now PE/hedge funds are their to extract whatever they can get.

dragonwriter 8y ago
> Internet disrupted the newspaper industry. It gets way to much credit for this; the terminal decline of that industry began a couple decades before widespread public use of the internet.
- Analemma_ 8y ago
  That's... exactly the opposite of true. Newspaper industry profits peaked in 2004.
  - danso 8y ago
    Depends how you look at it. Newspaper profits were at their highest in that period, but only because the industry had been ravished by radio and TV in the past decades. By 2004, it was extremely rare for a city (other than the very biggest) to have more than one newspaper. In past decades, most cities had multiple newspapers, including morning and afternoon papers. The newspapers that survived to be the only dog in town effectively had a monopoly in classified and print ads. That's why profit margins were so huge -- but there were far fewer players in the game.
  - dragonwriter 8y ago
    A number of other measures of the health of the industry has been in decline since at least the mid-1980s and the subject of much media commentary; 2004 is just when the trend of consolidation and cost cutting (usually involving destroying local newsrooms as chains for bigger) that had been going on since, IIRC, the 1970s abd was the main thing blamed for that decline was no longer able to keep profit growth positive.