Here is the hard truth. The current state of local journalism is dire. The devastating impact of COVID-19 has made advertising dollars plunge and closed more than 50 local newsrooms around America, according to Poynter’s Kristen Hare, who has been tracking the closures since March. In addition, as newsrooms around the country continue to work remotely from home, Tribune Publishing recently announced several of their local newsrooms (including the New York Daily News, Orlando Sentinel, and Capital Gazette in Annapolis, M.D.) would close their physical offices.
But before COVID-19 hit the industry, local journalism was already in need of help.
According to the “News Deserts and Ghost Newspapers: Will Local News Survive?” report published by the University of North Carolina (UNC) Hussman School of Journalism and Media and authored by Knight Chair in Journalism and Digital Media Economics Penelope Muse Abernathy, since 2004, the U.S. has lost one-fourth (2,100) of its newspapers—that includes 70 dailies and more than 2,000 weeklies or non-dailies. The report also shared that at the end of 2019, the nation had 6,700 newspapers, down from nearly 9,000 in 2004, and more than 200 of the nation’s 3,143 counties and equivalents had no newspaper and no alternative source of credible and comprehensive information on critical issues.
When the first news deserts report was published in 2016, Abernathy described it as “a tree falling in the forest and nobody in the industry realized except a few.” But by 2018, the industry was beginning to understand what was happening to the health of the news ecosystem in communities across the nation.
“I think we’re looking already at the potential rise of what I would call ‘Saharas’ across regions in this country,” Abernathy told E&P.
The News Reporter is a family-owned and operated newspaper in Whiteville, N.C. The twice-weekly publication was founded in 1896 and has been owned by the Thompson/High family since 1938. Yet, it exists in one of the poorest counties as well as one of the most impacted regions in the South. Currently, the newspaper has 2,026 print-only subscribers and about 1,700 digital or digital and print subscribers.
Local newspapers, like the News Reporter, are vital in the news ecosystem. Abernathy looks at it as a three-tiered ecosystem with national newspapers at the top, regional newspapers in the middle and community newspapers as the base (which includes ethnic newspapers, small/mid-sized dailies and non-daily newspapers).
Abernathy explains that the 2,100 lost newspapers disproportionately affected the bottom tier of the ecosystem, and “as with any ecosystem if the bottom is wiped out that will have implications all the way up.” Additionally, the loss of 36,000 journalists over the last decade has mostly been at the regional level. Thus, the news ecosystem faces a double loss.
In recent years, the News Reporter has worked hard to evolve in many ways to meet industry demands. They focused on innovation, invested in the newsroom and worked toward a business model centered on circulation revenue. They reduced their assortment of 48 subscription plans down to two: digital-only and print and digital with print-only subscriptions grandfathered in. They implemented a 24/7 newsroom, and in 2019, they erected a metered paywall.
After launching a revamped website in 2018, the News Reporter originally planned for the website to be free for three months before putting up the paywall. However, due to tech issues, it took eight months to get the paywall up and running.
“This ended up being a serendipity because we got people hooked on the free content that resulted in a successful launch in February 2019,” said publisher Les High said.
The revenue from the paywall and rise in circulation numbers offset what they lost in advertising in 2018 after Hurricane Florence wiped out many local businesses for several weeks. High said that “while digital hasn’t replaced the print model, nor will it anytime soon, it literally helped (them) weather the storm.
To keep up with the demands of their readers who want their community news right away, editor Justin Smith said the News Reporter now operates with a digital-first approach with all its news coverage. For example, the newsroom recently had reporters attend four important community meetings with a staff of about five people, and stories went up that night or the following morning.
Even though legacy newsrooms like the News Reporter have adapted to the times, the news desert report suggests that digital is not the savior the industry anticipated it would be several years ago.
“There was the initial hope that digital sites would fill the void, and unfortunately, the digital news sites are experiencing the same revenue problems that newspapers are experiencing,” Abernathy said.
But for those who want to dive headfirst into digital, research should be done on the community first. Abernathy suggests that there are very few communities that could support a digital local news operation. Even in the smallest markets, three quarters of the revenue is siphoned off by the tech giants, leaving very little digital revenue in terms of subscriptions or digital revenue. Abernathy explained that many communities that would be served by these digital sites may not have access to internet needed to see the content, or they may not be able to afford a news subscription or recognize or trust a news brand when it appears online.
Abernathy also noted in her report that “although, 83 new local sites were added to the UNC database in 2019, an equal number disappeared, as sites that were active in 2018 went dormant.” Additionally, non-profit startups face the challenge of funding, especially in economically struggling communities which are most likely to become news deserts.
Abernathy noted that collaboration among news organizations will help in regions like where the News Reporter is located. One such collaboration is the Border Belt project made up of newspapers and news organizations in four counties in North Carolina.
“All four of those counties are some of the poorest in the state,” Abernathy said. “They serve minority populations that are becoming a majority in the counties in which they live. What (the News Reporter) aims to do is bring journalism to adjacent communities that they’ve done so well in by pooling the resources, and coming together to get a proposal that serves a region—not just a community or a county.”
Preserving Local Ownership
Since 2008, hedge funds, private equity firms and other investment entities have aggressively purchased hundreds of newspapers and chains—displacing the media barons of the previous century.
Abernathy said one could argue that through the end of the 20th century there was a few benefits to shareholders. If one market were struggling, it could often be compensated with another market and good journalism could continue to be provided. The ability to bring national and international news down to the local level was another benefit.
But as the newspaper industry’s revenue declined, these hedge funds began to aggressively cut costs by laying off staff, reducing benefits, consolidating editorial functions and more—eventually becoming known as “vultures.”
In 2004, the largest 25 chains owned a fifth of the 8,900 newspapers and less than a third of the 1,472 dailies. At the end of 2019, the 25 largest chains owned just a third of the 6,700 surviving newspapers in the nation.
The most recent hedge fund to acquire a newspaper company is Chatham Asset Management. In July, a federal bankruptcy judge approved the $312 million sale of McClatchy Co., who declared bankruptcy in February. According to a McClatchy DC report, after a 30-day transition period, the new company will cut all ties with the founding McClatchy family, which had been in control for 163 years.
Abernathy wondered how the new company will prioritize getting information to communities that need it the most verses the very real business issues they are going to confront.
“Just (trying to) stay in business is not going to serve the needs of many communities,” she said. “So, the shape that McClatchy’s papers are in three to five years from now will be determined by the strategic decisions that the new owners make.”
High also shared his concerns about non-local ownership. “Hedge funds have seriously damaged the credibility of newspapers. We all know the drill. Despite protestations that there won’t be lay-offs or reductions in the quality of reporting, there almost always is.”
Although many local newspaper owners have been forced to make the decision to sell to these companies for the sake of saving the newspaper, High has no plans to do the same.
“We will do everything in our power to keep the News Reporter under local control and pray that folks from Whiteville to Washington understand and appreciate what a valuable role newspapers play in our communities and in our democracy,” he said.
This is something High’s daughter, Margaret, understands. Margaret works at the paper as a writer and began an MBA program at UNC Kenan-Flagler Business School this fall with the goal of working on models to save local journalism.
“There’s gravity in being the fourth generation at the News Reporter,” she said. “I grew up watching the printing press and helping with inserts, so the staff very much feels like family.”
Most employees at the newspaper have been with the organization their entire careers, so the workers who greeted her when she was five are the same who greet her at 23, she said.
“Saving journalism isn’t just about saving the backbone of democracy, it’s also about honoring the sacrifices my family made before me,” Margaret said.
The media landscape has certainly transformed since the first news desert report was published four years ago. And the report will continue to reflect these changes.
New to the 2020 report was ethnic media and public broadcasting. Two things motivated the addition of ethnic media in this year’s report, Abernathy said. First, it was the notion that areas that had lost newspapers were often minority communities or economically struggling communities, and second was the fact that the census predicts that by 2045, the U.S. will be a majority minority nation.
Public radio was added because recently it has made efforts to help stop news deserts by adding journalists and stepping up their coverage of state and regional issues, such as environment, economic and business, education and health.
More importantly, the report introduced four main concepts: ensuring that no community is excluded because its residents lack access to critical information is the “journalistic challenge of the 21st century;” the industry will need various models going forward and increasingly it appears the industry will need public funding allocated towards local news; technology capabilities will present several issues—such as many Americans do not have access to high speed internet and algorithms are determining what news consumers see—that requires the industry to evaluate what it can do verses what it cannot do; and policies and regulations should be rethought as the polices that drive media governance and regulation today were set up nearly a century ago, when the industry was in a very different situation.
According to Abernathy, all four concepts are interconnected and must be reimagined or reinvented to thwart the rise of news deserts in the nation.
Looking ahead, the COVID-19 pandemic will continue to disrupt our industry. Just about every independent publisher Abernathy has spoken to since the 2020 report was released saw advertising drop as much as 40 to 50 percent in the second quarter. Many were able to employ people with the government assistance that went to small and independent publishers. However, they expect the third and fourth quarters to be sluggish, she said.
She anticipates the industry will have several hundred less weeklies, and the industry will see many publications transition to digital-only, as nearly three dozen have already done. The dailies will have to rethink the daily distribution of a print edition and cut back on the printing schedule. The trouble with both methods is if they are not done in a thoughtful manner, the news organization risks alienating the readers they still have as well as their advertisers.
However, there will be survivors. There will be those that will figure out the best way to provide news and information that feeds democracy to their communities by thinking creatively and in a disciplined manner, Abernathy said.
Abernathy also anticipates that the industry will continue to see publishers look for new business models. The industry will need to rely on the independent owners that have journalistic mission as a top priority to “try to figure out how to craft a business model that serves their community.”
As for the 2021 news desert report, Abernathy hopes to focus on policies on a national and local level. She also wants to examine what kind of benefits partnerships and collaborations offer going forward. Additionally, she wants to keep an eye on public funding, large media chains, the future of independently owned news organizations and other assorted media that has the potential to play an important role going forward.
For Les High, the annual news desert report is sobering but he views it as a solutions piece.
“It sets the stage with an honest assessment,” he said. “There are big hills to climb, but if we can restore local ownership to the extent we can break up the monopolies, innovate, invest in our newsrooms, work to reach an increasingly diverse audience, count on more external support in the form of bills like H.R. 7640 (the bill will provide tax incentives to support local newspapers and other local media), and the non-profit model gains a toehold.”
For Abernathy, the report’s goal is to not cause more pessimism in the industry and the future of news, but to provide a source that conveys the state of local news and raise awareness, not only the media industry, but among politicians and the country as a whole.
But to any publisher reading the report, Abernathy said the best ones are realists as well as optimists.
“You’ve got to believe there’s going to be an answer to the local news crisis. It may come from policy changes. It may come from either the for-profit or non-profit, world. It may come from rethinking who you serve and why you serve them,” she said. “But I hope that in any decision they make, all publishers and owners of newspapers are going to ask—first and foremost—this question: ‘What is my civic journalistic mission and how do I accomplish it?’”