Journalism advocates are distraught that hedge fund Alden Global Capital is making a bid to acquire the Lee Enterprises newspaper chain. Unfortunately there aren’t many options for blocking the merger because limits on media consolidation have been whittled away by conglomerates and willing regulators.
Perhaps the best outcome would be if the deal convinces Congress and competition regulators to restore limits on consolidation and prevent what’s left of America’s independent, local press system from falling into the hands of a few extractive investment firms.
Regulators are limited because there’s no special review process for newspaper mergers, Charlotte Slaiman, competition policy director at Public Knowledge, explained via email.
Under a standard analysis, regulators would compare localities where the firms have competing newspapers and require the merged firm to divest them, she said. But there’s little overlap as few communities have two local newspapers; many now have zero.
There isn’t a “public interest” standard in antitrust law, John Kirkwood, a Seattle University law professor who formerly worked with mergers at the Federal Trade Commission, told me via email.
There are public interest standards for broadcasters using public airwaves. But the Federal Communications Commission gutted its limits on media ownership, including cross-ownership of newspapers and broadcasters in a particular market.
That FCC decision was upheld by the Supreme Court in April, in a ruling based partly on a mistaken belief that “technological advances led to a massive increase in alternative media options.”
While there may be more “media” options, the public has far fewer options for local news. Mergers, layoffs, market disruption and unfair competition by digital ad giants led to a 60 percent reduction of newspaper newsrooms, which provide most local reporting, since 2008.
Investors prioritizing returns over journalism have left much of the country with “ghost newspapers” providing little to no coverage of important information.
Alden is the second-largest owner of newspapers in the U.S. and Lee is the third largest.
As of 2019, they had a combined 377 papers, trailing only Gannett, another chain swallowed by an investor group, which had 613 papers, according to a University of North Carolina tally.
Although it employs many dedicated journalists and claims to be trying to sustain newspapers, Alden is known for deeply slashing spending.
Hartford Courant reporter Alex Putterman recently provided details in a tweet. Connecticut’s largest paper had around 400 people in its newsroom in the 1990s. As of October the newsroom employed 36, he wrote.
Lee’s leadership burdened the Iowa-based chain with massive debt from acquisitions. An activist shareholder pressing the company to improve performance recently warned that Lee could be a takeover target if the stock doesn’t improve.
In a statement on Alden’s “unsolicited” takeover bid, Lee said nothing about what it means for journalism or public service. “Lee’s Board of Directors and management team are committed to acting in the best interests of all shareholders,” it said.
I periodically read Lee papers in the Willamette Valley of Oregon, which appear to be running on fumes.
Lee also owns the Longview Daily News. It currently has no editor, due to a departure, and the newsroom is managed by a regional circulation manager with an Oregon phone number.
If nothing else, this sad situation should invigorate efforts to save what’s left of local journalism in the U.S. and revive policymakers’ interest in limiting further media consolidation.
Brier Dudley is editor of The Seattle Times Save the Free Press Initiative.
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