Why would you buy a newspaper if all you want to do is dismantle it?


Lee Enterprises bought a small town newspaper, the Floyd Press, for $140 million dollars. You’d think for that sum that they’d want to invest and maintain it, but no — they started firing the people right away. Did they think a newspaper was a collection of printing machines and nothing more? They kept paring away until the staff was reduced to one person, Ashley Spinks, who was the sole reporter, editor, and publisher, and someone whose job was selling ads. They were only paying her $36,000 per year, so it’s unclear what they thought they were buying for that $140 million.

An article discusses Spinks and Lee Enterprises cutting staff on newspapers all over the place, and it’s clear that they also don’t understand what they’re selling. They’ve got a fleet of small town newspapers that don’t have reporters writing about local news. The subscribers notice, too, but they’re a captive audience. These little newspapers don’t have to worry much about competition, and don’t do much investigative work. The one time in our lives that we subscribed to the Morris newspaper was when we had kids, and they’d regularly put up photos of local children doing local children activities. Right now I’d say that most of the interesting reading in our paper is on the op-ed page, where residents are providing all the content.

After that article, though, Lee Enterprises immediately fired Ashley Spinks.

Now the Floyd Press has no reporters at all. I presume they’ve still got the person selling ads.

I’ve always thought of a newspaper as a collection of journalists at heart, with the thing on paper just being the medium. What is a newspaper without reporters and editors? Is art just a bunch of nicely framed canvases? Who needs a poem when you can just buy a rhyming dictionary? Would you pay to visit an empty zoo with a nice array of cages? Is science a lab with some fancy glassware and machines that go ping? Somebody is missing the whole point.

I suspect there’s some greedy capitalist motive driving Lee Enterprises that has nothing to do with informing the public about the news.

Comments

  1. hemidactylus says

    Isn’t this a breakdown (double entendre) of the culture industry really? Information devolves into infotainment then pure ads devoid of informative pretense. Commodification laid bare. Ads that served as news distorters because the revenue stream prevents independent thought or dissension replace actual news content.

    Or is this a case of vulture capitalism as local papers death spiral the drain? What was Romney’s old company named? Bain?

    I know of a local Gannett paper who itself acquired a very local community paper that preceded it by over 50 years. The latter puttered along before eventually rebranded and becoming nothing more than ads and puff pieces for local eateries. Sad.

  2. birgerjohansson says

    För Rupert Murdoch and some of his ilk, controlling newspapers means controlling people’s minds, including how they vote, and they are willing to plow down money in newspapers that barely break even to active that goal.
    -Then we have the get-rich-quick assholes, who don’t care about journalism and buy newspapers the way they buy whatever they think will be profitable while lacking any deeper understanding.
    They will of course cut corners regardless of the consequences for quality, because quality is an irrelevant factor as long as money keeps coming in. This is capitalism by sociopaths. And when money stops coming in they will try to sell the wrecked newspapers to even worse new owners.

  3. Ridana says

    I don’t understand. If Spinks was their only remaining employee and they fired her, who is laying out the paper and sending it to press and distributing it, even if it is nothing more than ads now (which she was also selling – or was that another person?)?

  4. stroppy says

    Those free bundles of paper ads that keep arriving at my house go straight to recycling. I certainly wouldn’t pay for that crap.

  5. raven says

    In a filing with Delaware bankruptcy court, Lee Enterprises listed liabilities of $994.5 million and assets of $1.15 billion. The bankruptcy filing plan comes two months after the company had reached an agreement with most its lenders to refinance $769.5 million of its distressed loans.Dec 12, 2011

    Newspaper group Lee Enterprises files for bankruptcy | Reuters
    http://www.reuters.com › article › newspaper-group-lee-enterprises-files-for-bankr…

    Lee Enterprises has already filed for Chapter 11 bankruptcy once before.

    It’s not just Lee Enterprises either.
    There are other chains buying up newspapers and doing the exact same thing.
    I doubt they are making a whole lot of money even with their salvage capitalism.

  6. Allison says

    I don’t know about newspapers, but I worked for a company that bought a number of companies that were doing similar things (often better than mine), and then phased out their operations, forcing those companies’ clients to switch over to my company’s products. Companies as such don’t have “motives,” since their actions are a composite of decisions by many people (and I don’t want to be hauled in as a witness in an anti-trust suit, since I don’t actually know anything), but I can see two possible motives:

    Acquire more customers.
    Eliminate competition.

  7. says

    We live in times where control over our minds is the end game of the rich and powerful, to put us on that treadmill of mass consumption in order that we become slaves of their system to create a world of wealth and toys just for them. This is exactly why we must invest in institutions that are inherently free from the greedy manipulators of our time. This behavior should inform those of us still capable of independent thought the importance of supporting things like credit unions, co-ops, and open source in order to free ourselves from the tyranny of whatever the heck you want to call the messed up system we find ourselves living in.

  8. robro says

    Lee Enterprises seems so obscure, yet a quick scan at the Wikipedia article gives a perspective on its business and it’s a lot more than printing advertising fliers. Number one: it’s “the fourth largest newspaper group in the United States of America.” It’s assets include Pulitzer Inc. The head of the company, Mary Junck, is also chairman of the Associated Press. It bought Berkshire Hathaway’s BH Media Group’s publications earlier this year, and Warren Buffet owns $85 million in the company’s debt.

    If one thing Trumptilla’s taxes have shown us, “debt recapitalization” is a lucrative business. Junck, the board, and key investors are making plenty of money…and probably tax write-offs…all while killing small town papers. That activity probably drives readers to other outlets which Lee has a stake in such as online news and mid-size newspapers.

  9. says

    Reminds me of the German joke about the town and the tollbridge.
    Once upon a time, there was a small town at the side of a river, as such towns happen. And because the good people of that town were tired of getting wet feet every time they needed to cross the river, they decided to build a bridge. Now, bridges are expensive , and since also people not from our little town were using the bridge, they decided to make it a tollbridge and hire a guard. For a while, everything worked out fine. Then some people got suspicious: they hired an accountant to check on the guard and his collection. Yet, who was making sure the guard and the accountant weren’t joining forces, defrauding the town? So they hired an overseer. With now three public servants they decided they needed an administration and a council to check on all three of them. Soon the council noticed a huge problem: Expenses had been increasing, while turnover stagnated, and with a heavy heart they decided to fire the guard.

  10. billseymour says

    Giliell @10: I’d never heard that one before. I love it!

    robro @9: Yeah, this is personal for me. Lee bought the St. Louis Post-Dispatch (Pulitzer) several years ago. Most of the “news” stories now come from wire services.

  11. hemidactylus says

    @7- Allison

    Hmmm… per Searle (yeah I know…problematic) there is the notion of collective intentionality resulting in institutional facthood and hence as I interpret the formality and actual history on the ground corporations under charter achieving an institutional personhood.

    As “people” the overriding goal was set in stone by Milton Friedman, the fiduciary responsibility of profiting shareholders. So “Acquire more customers. Eliminate competition.” are hardwired into the framework and if application of the DSM per The Corporation is to be taken seriously, these institutional superorganisms are psychopathic.

    Real people, as inefficient and interchangeable elements of the superorganism, are expendable.

  12. MHiggo says

    That’s just it, though, PZ. The dismantling is the point. The only reason anyone buys news organizations these days is to strip them down and milk them for every last cent possible before declaring bankruptcy and congratulating themselves on doing as well as they did with a doomed asset (see Mary Junck, Sam Zell, Bain Capital, Gatehouse, etc). Not that the increasingly threadbare state of the US newspaper industry stops them from lining their pockets, of course.

    https://twitter.com/SethKlamann/status/1306280984317313024
    https://twitter.com/__matt_______/status/1216761592135725056

    As to questions on how newspapers can continue to put out content with no actual staffers, that’s easy. Lee and other chains have started regional hubs that handle content and page design for dozens of newspapers. From this article (https://www.stltoday.com/business/local/lee-design-center-will-do-layout-and-design-work-for-post-dispatch-beginning-in-may/article_2369cadc-81c4-579a-8cbe-e939f8bb1f7a.html) on the St. Louis Post-Dispatch having its design outsourced to a hub in Munster, Indiana: “The Lee Design Center provides this service for nearly 50 Lee Enterprises-owned daily newspapers and 300 weekly and specialty publications.” Have a few email accounts for people to send in letters to the editor and community news that hub workers will repurpose as “staff reports” and fill the rest of the paper with stale wire copy. As long as those at the top of the pyramid keep pulling down six figures a year, who cares if the product is garbage?

  13. PaulBC says

    I suppose you would buy it to dismantle it, just like you said.

    The motive might not be financial (how much did Peter Thiel spend to destroy Gawker out of pure spite?). It might not be immediate, and the most likely reason has nothing to do with news but with advertising. There’s a fixed amount of attention the local population can pay to anything. They won’t necessarily pay as much attention to a crappy paper with wire stories as one with in-depth local reporting. However, just getting their eyes off the local paper has got to be worth something.

    It’s unclear to me if this strategy would work, but it’s not obviously irrational. On the other hand, $140 million may look like chump change in this context, and it may be a really poor decision. Time will tell I guess.

    On a vaguely related note, I remember when CVS bought out Longs drugs in California and changed the branding and signage. Longs was a very well-known name. Why would they do that? I am still not sure it was the optimal choice, but I have to admit it doesn’t make any difference to me and probably just keeps everything simpler for them: consistent advertising and branding.

  14. PaulBC says

    @14

    to strip them down and milk them for every last cent possible before declaring bankruptcy and congratulating themselves on doing as well as they did with a doomed asset

    Agreed, and the person making this decision may get a lot of mileage out of claiming to be the “Chainsaw Al” for the 21st century. Why not spend $140 million dollars of other people’s money if I can leverage it to go from a $10 million salary to a $20 million salary with my next “host” (in the sense of parasitism).

  15. robro says

    MHiggo @ #14 — This “fill the rest of the paper with stale wire copy” is particularly pertinent to Lee Enterprises given their association through Junck to AP.

    “Local newspaper” is almost a joke these days. Our local newspaper is the Marin Independent Journal, a terrible little paper. The IJ is owned by MediaNewsCorp, which also owns the San Jose Mercury News among many other papers in the Bay Area and around the country. I knew this because I get the same “subscribe” pitch when I try to open stories on both papers’ websites.

    MediaNewsCrop is part of company legally known as MNG Enterprises, Inc, which also does business as Digital First Media…and that’s not the end of the shell game. MNG is owned by Alden Global Capital. Alden is a “hedge fund” based in Manhattan. It has been described by a Washington Post media critic as “one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism.” The founder, Randall Smith, puts the “vulture” in “vulture capitalism”. He specializes in investing in “distressed assets”, milking them dry, firing everyone, and declaring bankruptcy. I would guess that Smith is another very rich person who never pays taxes. He is also known for using offshore companies…a great way to hide real profits.

    In addition to leveraging losses and debt to make lots of money (a la Trump), I suspect that destroying local journalism is very much part of their plan. What better way to control public opinion than driving most people to a handful of news sources.

  16. unclefrogy says

    sounds to me like this case is another example if anyone needed one of the result of making money the purpose and goal of life and its expression as business. Where else was it ever going to end up but “the vast waste land”. I sounds very self-destructive as well.
    uncle frogy

  17. PaulBC says

    robro@17

    “Local newspaper” is almost a joke these days.

    The reporting I see in my “local” papers for Mountain View, Los Altos, and Palo Alto seems kind of bush league compared to when my “local paper” was the Baltimore Sun or Philadelphia Inquirer. On the other hand, they really do carry stories of local interest, and my entire impression of what goes on in Mountain View City Council meetings comes from Mountain View Voice. It would be disastrous to have that replaced by AP wire reporting. On the other hand, I have no idea how they manage to pay the reporters they have.

  18. Rich Woods says

    The one time in our lives that we subscribed to the Morris newspaper was when we had kids, and they’d regularly put up photos of local children doing local children activities.

    When I was eight I had my picture published in the local paper (B&W, naturally, for it was that long ago) for winning my primary school’s annual summer fancy dress competition. I’d woken up that morning with absolutely no idea whether or not I even wanted to enter the competition, let alone what as. But my mum was a nurse and had just got home from the night shift, so she wrapped my head in bandages, splinted one leg, hung one of my arms from a sling, etc etc, and sent me into school. Not one limb, barely one joint, was spared. It was so overkill that I must have looked like the training dummy that she, well, that she had trained on back in the 1950s. It was a bloody wonder that I managed to lurch back home with my £1 prize at lunchtime, across all those roads, without getting hit by a car, because I was wrapped up tighter than Tutankhamun’s anus.

    Anyway. I just came here to say, “Thanks, Mum.”

  19. jrkrideau says

    I just scanned other responses so so one may have made my points but: Pension funds to loot and real-estate to flog?

  20. PaulBC says

    @22 Real estate would be a motive in the SF Bay Area. I’m not sure if any local newspaper has a pension fund though.

  21. seachange says

    Fox doesn’t produce any news and makes money. Your question makes no sense as to what they’d do without a reporter.

  22. Nancy New, Queen of your Regulatory Nightmare says

    My husband used to work at one of Lee Enterprises’ small town papers. Office went from 5 people to 2 people–the editor/publisher and the ad/circulation person. The editor/publisher rebelled when Lee said he had to fire the ad person, and Lee replaced them with one person, stranger to the community, right out of J-school. That went as well as you might imagine.

    In the meantime, that editor/publisher and ad circulation person got together with another small town weekly in the same county, boosted THAT paper up, and ended up, two years later, buying the paper that they left from Lee and combining them into one paper NOT controlled by Lee.

Leave a Reply