In Milwaukee, as in most major American cities these days, the real crisis in journalism has nothing to do with all those dishonest political attacks on the press for printing “fake news.” It’s whether daily newspapers will survive to print any news at all.
Many Milwaukeeans may not realize it, but the Milwaukee Journal Sentinel, which was already evaporating before their eyes, is facing the most serious threat yet to its survival. It could become collateral damage in a hostile corporate takeover of Gannett Co., the nation’s largest newspaper publisher with USA Today and 109 other newspapers around the country, which acquired the Journal Sentinel three years ago.
When local ownership of the Journal Sentinel ended in 2016, many of us feared Gannett’s notorious reputation for cost-cutting. We’ve seen local coverage deteriorate ever since from repeated staff reductions. But the new threat to Gannett’s entire nationwide news empire makes previous fears look like worrying about a mosquito attack while blood-sucking swarms of vampires are circling overhead.
The continuing threat to Gannett is from Digital First Media, owned by Alden Global Capital, a New York City hedge fund known for stripping down newspapers to skeleton operations and selling off all their parts, especially downtown real estate, for enormous profits.
Digital First has already gutted the news operations of the Pulitzer-Prize-winning San Jose Mercury News and Denver Post and about 100 other newspapers. In the San Francisco Bay area, it bought 16 regional newspapers including the Mercury News and reduced a combined 1,000 editorial employees to about 100.
When Digital First bought the Boston Herald a year ago, Boston Globe columnist Joshua Benton wrote sympathetically about losing a competitor: “Just short of setting the place on fire, being bought by Digital First is about the worst outcome possible.”
Last month, Gannett’s board rejected Digital First’s unsolicited bid of more than $1.3 billion to buy Gannett’s entire chain of newspapers. But that hasn’t stopped the threatened takeover. Digital First, a minority owner in Gannett, nominated six people to Gannett’s board, accusing current “unfocused leadership” of losing 41 percent of the company’s value in 2.5 years. Digital First argues it would minimize expense and “maximize value right now.”
That’s a pretty accurate description of Digital First’s newspaper-destroying tactics. Critics describe Digital First as the grim reapers of journalism, vulture capitalists who reduce employees to a minimum and strip-mine newspaper real estate for cash without making any investments to continue the existence of local newspapers.
Gannett itself has sold at least six of its newspapers’ buildings to Digital First in recent years. Last April, Gannett sold the headquarters of the Asheville Citizen-Times in North Carolina to a Digital First subsidiary for $3.2 million. In a transaction recorded the same day, Digital First flipped the property to a local developer for $5.3 million.
When Digital First bought the Orange County Register and the Riverside Press-Enterprise in California out of bankruptcy in 2016 for $49.8 million, it made back tens of millions within weeks by selling 14 acres including the Register’s printing press for $34 million.
Since Digital First’s primary business is commercial real estate, you can imagine its interest in the Journal Sentinel building at 4th and State and the entire block near the Milwaukee Bucks’ new Fiserv Forum. Gannett has a pending purchase agreement on the property that’s not yet completed. Digital First specializes in bleeding every dollar out of prime downtown real estate.
Gannett is looking at other sites for its Milwaukee newspaper operations. How quaint. When Digital First sells off newspaper offices, it doesn’t care much about finding space for its few remaining employees. After selling the building housing the Delaware County Daily Times outside Philadelphia for $2 million, Digital First reduced the staff of 125 to 25. They work in an abandoned CVS drugstore and bicycle repair shop. A union official said the company now is considering an alternative used at other Digital First newspapers: “They’re thinking about having everyone work from home or from Starbucks.”
It’s time for that disclaimer. Many people know that along with many of the best journalists I’d ever known, I lost a great job as a columnist for The Milwaukee Journal in its first major corporate downsizing when it merged with the Milwaukee Sentinel in 1995. I still have friends there doing outstanding work and admire others who came later. I criticize the paper when it fails to live up to its long history as one of the nation’s best newspapers.
It will be an American tragedy for democracy if the corporate blood-suckers of Digital First send the Journal Sentinel into its final death spiral along with Gannett’s nationwide network of local journalists. It’s never been more important for independent journalists to provide factual information about the positive and negative personalities and forces shaping the lives of our communities, our states and our nation.
Joel McNally writes a regular column for The Capital Times.
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