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.

In her book – Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy (University of Illinois Press, 2024), Margot Susca, an assistant professor of journalism at American University, reveals the little-known history of how private investment took over the newspaper industry. 

Drawing on the 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. 

Susca reveals an industry rocked less by external forces like the internet and 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.

“I was interested in examining the wealth overclass in the U.S. newspaper market,” Susca told Corporate Crime Reporter in an interview last month. “I was particularly interested in trying to undo the myth that the internet and the loss of advertising revenue alone busted American newspapers. I spent three years going through bankruptcy court records, SEC files, and other trade reports, complemented by 106 hours of interviews. I was interested in looking at the ways that private investment funds were involved in the newspaper market over the past 20 years, in how their ownership, investment and bad decision making were as much a nail in the coffin as was the loss of advertising revenue to the internet.”

How was a hedge fund ownership different from a Jeff Bezos type ownership?

“Profit and money making has been a part of the American newspaper system since the days of Benjamin Franklin. Hearst and Pulitzer. Those men got very wealthy off of their newspaper ownerships. One of the core differences between those newspaper owners and hedge fund owned newspaper chains is that under hedge fund ownership, the sense of mission is completely gone.” 

“The other issue is that many of these hedge funds have their financial dealings in so many other areas of the global economy that they are benefitting from a hamstrung press.”

“If you are a billionaire newspaper owner today, you have interests in different parts of the economy – for profit hospitals, real estate, healthcare – which is heavily influenced by the private equity industry. I can’t speak specifically to Bezos as the owner of the Washington Post, but in my view, getting billionaires out of the newspaper business would be a real plus.” 

I saw your interview with Jack Shafer. It seemed like a contentious interview. You said you consider yourself a professor of political economy of the media and that the big investments in newspapers might be more of a political move than a monetary move to control the dissemination of information in a democracy. 

You came to that view since the book was published?

“There are only a small number of hedge funds that operate in the newspaper market. They operate as their own oligarchy – either as owners or as lenders. 

In the book’s conclusion, I trace the political donations from that very small number of private equity firms and hedge funds that have given over the last twenty years to politicians on both sides of the aisle. That came right from the book’s conclusion. These are firms that have given handsomely to politicians to try and win influence. And that includes influence over bankruptcy law.”

Newspapers are not considered a major profit center. Why would the hedge funds seek to gobble them up, if not for political reasons?

“It’s true that newspapers today in 2024 are not as profitable as they were at the end of the 1990s. But advertising revenue and circulation revenue reached $20 billion in the American newspaper industry in 2021. That’s not a small chunk of the pie.” 

“If you are a hedge fund and you have only four or five people on your staff, you don’t have to worry about shareholders. You can cut to the bone and take whatever is left. And that is a lot of money to spread around among a very small number of people.”

“I am concerned about the political realities of ownership. But the idea that newspapers are dead, tired businesses – they still have $20 billion in revenues.”

What are some newspapers that have survived and thrived and stayed independent?

“The Salt Lake Tribune is the primary example. It has bucked the trend. It now operates as a nonprofit. The Philadelphia Inquirer is a for profit newspaper owned by a nonprofit. The Portland Maine newspaper has a fascinating ownership structure. It’s now owned by the National Trust for Local News.”

“In each of these examples, there is a strong commitment from nonprofit and philanthropic organizations to save these news organizations from hedge fund ownership. You are going to see more investment from philanthropies to try and save newspapers. There is something called the Press Forward Initiative – a national movement to strengthen democracy by revitalizing local news.”

You are encouraged by these nonprofit models. But that’s a minority model still, right?

“There are 450 nonprofit newsrooms operating in the United States. And that’s up by 50 percent in the last few years. I don’t know how many independent for profit digital sites there are. That 450 number comes from the Institute for Nonprofit News. There still are more daily newspapers in the United States than there are nonprofit newsrooms. But it’s a growing nonprofit sector. It has me cautiously optimistic.” 

“But is it a sustainable model? Or will these philanthropies move on to another cause in a few years?”

[For the complete q/a format Interview with Margot Susca, see 38 Corporate Crime Reporter 48(12), December 9, 2024, print edition only.]