Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy

by Margot Susca

Overview

The untold history of an American catastrophe

The ultrawealthy largely own and guide the newspaper system in the United States. Through entities like hedge funds and private equity firms, this investor class continues to dismantle the one institution meant to give voice to average citizens in a democracy.

Margot Susca reveals the little-known history of how private investment took over the newspaper industry. Drawing on a political economy of media, Susca’s analysis uses in-depth interviews and documentary evidence to examine issues surrounding ownership and power. Susca also traces the scorched-earth policies of layoffs, debt, cash-outs, and wholesale newspaper closings left behind by private investors and the effects of the devastation on the future of news and information. Throughout, Susca reveals an industry rocked less by external forces like lost ad revenue and more by ownership and management obsessed with profit and beholden to private fund interests that feel no responsibility toward journalism or the public it is meant to serve.

Product Details

ISBN-13:	9780252087561
Publisher:	University of Illinois Press
Publication date:	01/23/2024
Series:	The History of Media and Communication
Edition description:	First Edition
Pages:	232
Sales rank:	128,605
Product dimensions:	6.00(w) x 9.00(h) x 0.90(d)

About the Author

Margot Susca is an assistant professor in the School of Communication at American University.

Table of Contents

Acknowledgments

Introduction: What Crisis

1. The Private Investment Era
2. Democracy for Sum
3. Profit Harvesting
4. Mergers and Acquisitions
5. The Debt
6. Layoffs
7. Neglected Audiences

Conclusion: Ending the Era

Notes

Index

Editorial Reviews

11/13/2023

This damning debut from American University communications professor Susca examines how “overharvesting profits, the debt born of mergers and acquisitions, and the greed of private investment funds” has hollowed out newspapers across the country over the past 20 years. She explains that private equity firms and hedge funds’ practice of purchasing companies by taking on exorbitant debt has disastrous consequences for employees; for instance, private equity billionaire Sam Zell’s 2007 purchase the Tribune Company, publisher of the Chicago Tribune, saddled the business with $13 billion in debt that it dealt with by laying off 5% of its publishing employees. Affecting stories detail how such deals harm journalists; for instance, Susca tells how Kristen Doerschner, former managing editor of Pennsylvania’s Beaver County Times, was so stressed “her hair began falling out” after Fortress Investment Group’s 2017 purchase of the paper forced her to reduce staff and coverage. Susca also makes a persuasive case that communities are worse off after the corporatization of local news, arguing that the 2020 case of Daniel Prude’s death at the hands of Rochester, N.Y., police “is one that a well-staffed newspaper... should have caught” before the Prude family’s legal campaign for accountability garnered national attention (Rochester’s Democrat and Chronicle had been severely winnowed by news conglomerate Gannett). Readers will be outraged. (Jan.)

Publishers Weekly

"Susca has written a valuable guide to this world of greed, unbound by any sense of mission beyond lining the pockets of wealthy investors. As we move into the post-newspaper era, it would serve all of us who care about local news and its role in fostering civic life to look back at what happened, and what is happening still." —Arts Fuse

“Hedged shines a light on one of the most underdiscussed and underappreciated parts of the collapse of local news—the role of hedge funds and private equity firms. It’s an important book for anyone who wants to truly understand the decline of local journalism or who wants to craft solutions.”—Steven Waldman, President and cofounder of Report for America

From the Publisher

2023-09-09
A professor of journalism examines the ways in which private money co-opted American journalism in the name of profit.

At the end of 2017, the Federal Communications Commission voted to deregulate the newspaper and TV news system. Susca argues that this action, upheld by the Supreme Court in 2021, allowed for a small group of private equity firms and hedge funds to increase the rate at which they bought newspapers and consolidated them. The author pinpoints 2003 as the year when private investment firm involvement in the newspaper industry began in earnest, citing the 40% stake Blackstone Group and Providence Equity Partners bought in Freedom Communications, Inc., a then–publicly held news corporation. During the next two decades, more such investments followed, all driven by the desire to “squeeze out more profits” for shareholders by “cutting staff, consolidating beats…closing bureaus and selling off landmark buildings” in communities all over the U.S. The result—especially in small towns—has been the creation of print and digital newspapers that ignore the stories most important to readers, such as those focusing on “children’s schools, crime, local commissions and elected boards.” This, in turn, has led to what Susca sees as a diminishing of the informative, watchdogging role media has been entrusted to play in democracy. Another disturbing byproduct of the “quality crisis” in journalism has been lessening of audience engagement with the news process itself. “When newspaper companies treat [readers] as consumers only,” writes the author, “their function as citizens is limited.” Media scholars will appreciate Susca’s careful analysis of evidence derived from such sources as court documents, congressional reports, corporate records, and in-depth personal interviews. As timely and incisive as her conclusions are, however, general readers may find the book to be too academic.

A well-researched study that will have limited appeal outside of the communications field.

Kirkus Reviews