Newspaper closures increase as sales slow

The pace of newspaper closures, mergers and bankruptcies appears to be accelerating as both chains and independent newspaper owners face unrelenting economic challenges, and the largest companies shed underperforming assets.

Since publication of the 2018 report, The Expanding News Desert, UNC researchers have uncovered an additional 200 shuttered papers. Almost half of those papers have closed in recent months, according to data compiled by the UNC Center for Innovation and Sustainability in Local Media.  If the trend holds, the U.S. will have lost more than 2,000 newspapers since 2004, bringing the total number of surviving newspapers in the country to less than 7,000.

Most of the shuttered papers this year have been in the Midwest and Northeast. All are weeklies, except four small dailies under 10,000 circulation in Missouri, Arkansas and Louisiana, and the 33,000-circulation Youngstown (Ohio) Vindicator, which announced last week it planned to close at the end of August because the family-owned paper could not find a buyer.

This new information is based on UNC’s annual survey of state press associations – with more than three-quarters of the organizations reporting – as well as extensive tracking of news accounts and investment reports on sales, mergers and sales.  

While closures appear to be accelerating, the pace of acquisitions has slowed in recent months as sales prices have dropped to historic lows.  Many newspapers in small and mid-sized markets are being valued at only two times trailing annual earnings, according to investment bankers, who predict that the pace of acquisitions will pick up in the fall, as some large chains, such as such as Community Newspaper Holdings, Inc. (CNHI), begin exiting the market, and others, such as Gannett and GateHouse, contemplate merging operations.

CNHI, backed by the pension fund Retirement Systems of Alabama (RSA), announced in 2018 that it planned to sell or shutter all of its more than 100 papers, located in mostly rural communities. However, CNHI is in no rush, given the depressed market.  "This is not exactly the market you'd want to sell anything in because the prices are too low,” David Bronner, CEO of the RSA, said in an interview earlier this year with the Southern Newspaper Publishers Association. “(Community newspapers) still make money. And you have a wealth of real estate assets there. You wouldn't want to give it away at two times earnings."  CNHI did not return numerous calls, seeking further comment on the status of its papers.

In contrast, GateHouse, the largest newspaper chain with more than 450 papers, is moving ahead with either sales or closures of several dozen of its smallest papers. In a recent earnings call, company executives said they were focusing this year on assimilating the more than 100 acquisitions in recent years, and reshuffling the properties in its portfolio. In late May, GateHouse announced it would be “consolidating” its 50 remaining suburban weeklies in the Boston area, leaving only 18 titles. GateHouse has also continued selling off small individual properties in the Midwest and South, such as the daily Log Cabin Democrat to Paxton Media, while shuttering those it cannot sell, including the 150-year-old Bastrop, Louisiana, Daily Enterprise. According to news reports, GateHouse has also explored merging with Gannett, the second largest chain with more than 200 papers.

While the large chains can afford to hold out for better prices – or simply walk away from underperforming properties – some legacy family-owned newspapers and regional chains, such as Western Communication, which owns seven papers in the Pacific Northwest, are being forced to declare bankruptcy and auction off their properties at rock-bottom prices.  The 151-year-old Reading Eagle in Pennsylvania, with a circulation of 40,000, was recently picked up at auction by Digital First Media, the third largest chain with more than 100 papers in its portfolio.  This came only a couple of months after Digital First, which is owned by the hedge fund Alden Capital, made an unsuccessful hostile bid to takeover Gannett, after reportedly first asking Gannett to buy its newspapers. Meanwhile, according to news accounts, Tribune Publishing is still looking to either sell its 77 papers, including the Chicago Tribune, or merge with another chain.

All this sets up an unpredictable second half of the year.  More precise numbers on closures and sales will be available in fall, when the Center publishes its fourth annual report, tracking the threat of news deserts.

When “Local News” Isn’t Local

The Impact of News Deserts in Research from Pew, Facebook       

Two concerning and contradictory findings about local news attitudes emerged from a Pew Research Center study released today. While half of Americans say local media don’t cover their communities, almost three-quarters don’t realize that the loss of local news has been driven by the demolition of the business model that has historically supported newspapers.

The Pew study, which surveyed 35,000 Americans between October and November 2018, found that more than 70 percent of Americans think their local news outlets are doing very well or somewhat well financially.  As a result, less than 15 percent have paid for subscriptions or donated to local news outlets in the past year.

Nearly half of those surveyed by Pew say the local news they receive isn’t about the community in which they live. More than 1,800 local newspapers in the U.S. – or one in five – have closed or merged since 2004, according to a report by the UNC Center for Innovation and Sustainability in Local Media, The Expanding News Desert. Many of the country’s remaining local and regional papers have pulled back circulation and coverage from outlying areas as both daily circulation and newsroom employment dropped by nearly 50 percent since 2008, leaving Americans in thousands of communities without a credible and comprehensive source of local news.

More than one-third of Americans think local journalists are out of touch with the community, and a vast majority of those surveyed by Pew think it is at least somewhat important for these journalists to be personally engaged with their local area. “These figures stand out in part because Americans overwhelmingly believe local journalists should have a strong connection to the communities they report on,” said Amy Mitchell, director of journalism research at Pew. “Vast majorities, for instance, put importance on local journalists being personally engaged and knowing the history of the community.”

Facebook has also recently released data that shows that one in three of its users live in places where the company cannot find enough local news to launch its “Today In” feature.  According to Facebook’s metrics, there has not been a single day in a four-week span where the company has been able to find five or more recent news articles directly related to these towns. And while the supply isn’t there, the demand is. Facebook says when it surveys users about what types of news they would like to see more of, local news tops the list “by far."

Similarly, Phil Napoli at Duke University found that were no articles on local issues and events in 20 percent of 100 communities sampled during a seven-day period in 2016.

Local TV stations top the list of outlets where Americans often get local news, according to the Pew survey. Some 38 percent of U.S. adults say they often get news from TV, while 20 percent primarily turn to local radio and 17 often use local daily newspapers. But nearly a third – 28 percent of those surveyed – said they turn to less traditional types of providers for local news, such as online forums and community newsletters. While nearly 80 percent of Americans who get local news from television and radio access it through the television set or the airwaves, nearly half – 43 percent – of the daily newspaper readers access that news digitally rather than in print.

For much more on ghost newspapers and the loss of newspapers and readers in the Expanding News Desert, visit our report page.

The Impact of News Deserts in Research from Pew, Facebook       

Two concerning and contradictory findings about local news attitudes emerged from a Pew Research Center study released today. While half of Americans say local media don’t cover their communities, almost three-quarters don’t realize that the loss of... -->

More Loss of Local News: Questions with April Lindgren

April Lindgren, Velma Rogers Research Chair at Ryerson University and principal investigator for the Local News Research Project.

The widespread loss of local news isn’t just a U.S. problem. It’s an international one, affecting our neighbors to the north at nearly the same rapid rate. In Canada, 260 news outlets – including more than 200 newspapers, two dozen broadcast outlets and a dozen online news sites – have closed or merged within the past 10 years. And much like the United States, the closure of local news outlets is rapidly outpacing the launch of digital news sites to fill the void. More than one-fifth (225) of Canadian newspapers have closed since 2008. This includes the closure of 189 community weeklies and 36 daily papers. April Lindgren, the Velma Rogers Research Chair at Ryerson University’s School of Journalism in Toronto, quantifies this disappearance as the head of the Local News Research Project.

The Local News Research Project’s investigation into the loss of local news includes the creation of the Local News Map, which tracks changes to news outlets across Canada. The crowd-sourced map, created by Lindgren and collaborator Jon Corbett from the University of British Columbia, documents the launch of new local news outlets, the closing of local news operations and service increases/decreases dating back to 2008. As of Oct. 1, 2018, there were more than 350 markers on the map indicating a loss or diminishment in news—such as closures, mergers, dailies shifting to weekly publication and decreases in TV stations and radio service. In contrast, there are only 93 markers on the map indicating new media outlets that have been created.

Lindgren coined the phrase “local news poverty” to describe the condition when the critical information needs of residents in a community are not being met. These critical information needs are related to issues traditionally covered by local newspapers, from health and transportation to education. Lindgren has also documented how local news is available unevenly across the country. Along with Jaigris Hodson from Royal Roads University, she analyzed how local news media in Canadian municipalities covered local races during Canada’s 2015 federal election. The results showed that the amount of news coverage and access to diverse sources of news varied significantly according to where people lived.

Read about the local news map’s strengths and weaknesses as a research tool here. A summary of the election study results is available here.

How did you become interested in this topic and research?

I was fascinated by the fact that Brampton, a large suburban municipality near Toronto with nearly 700,000 people, until recently had no local radio station, no local television station, no daily newspaper and no serious online news outlets. A new investigative online site launched recently, but until it came along, the city’s residents had only one local news source, a community newspaper that publishes once per week and its companion website. The extent to which this suburban center and others are underserved in terms of local news, combined with a steady stream of headlines about newsroom shutdowns and cutbacks across the country, raised a whole bunch of questions. Are local online sites springing up to replace the loss of traditional news sources? To what extent are the critical local information needs of citizens being met? It turned out there were no good answers to these questions in Canada, so I decided to try to fill in some of these gaps.

What is some of the major research that preceded and contributed to your findings?

As I began investigating the availability of local news in different communities, it became obvious that some were better served than others. I thought the idea of local news poverty would be a useful concept because it allows for comparisons – some places will suffer more from local news poverty than others. The work of Lewis Friedland, Philip Napoli, Katherine Ognyanova, Carola Weil and Ernest J. Wilson III identifying the critical information needs of communities provided a framework for measuring local news poverty. Relative levels of news poverty are determined based on the extent to which these information needs are being met. For the election study, we borrowed heavily from the methodology Philip Napoli developed for his comparison of local news ecosystems.

What did you learn?

Local News Map has become a go-to source in Canada for up-to-date data on what is happening to local news in large, small, urban and rural communities.  No comprehensive data were available on the disruption underway in local journalism and the map has helped address that need. Visually, and in terms of the data we can download, the map tells a powerful story of news outlet losses that are outpacing the launch of new ventures by a ratio of three to one. We’ve also noticed that only a limited number of online news operations are emerging to replace traditional news sources such as newspapers.

The election study examined eight municipalities—a mix of rural, urban and suburban communities—to determine how much coverage local media produced about their area’s race for members of Parliament during the 2015 federal election. We found major differences in the number of news outlets, the number of stories they produced and how active they were in making their content more widely available via Facebook. Federal election coverage was selected for the study because it was a natural experiment that allowed for direct comparisons, that is, the election happened everywhere at the same time. That meant we didn’t have to control for major local events (a massive fire or city hall political scandal) that would have caused a surge of local coverage in any one community.

What are some of the major implications of your research? What are you focusing on next?

The map and the election study point to local news that is at risk and unevenly available across Canada. The loss of local news operations highlighted by the map has attracted the attention of politicians debating a potential public policy response. The differences in the availability of local news revealed by the election study raises concerns about whether citizens have access to the information they need to cast an informed vote. To the extent that the election coverage can be considered a proxy or indicator of the overall vibrancy of a local news ecosystem, the study results also suggest that some communities are better off overall than others when it comes to the availability of local news.

Detailed content analyses like the one we did for the election study are expensive and time-consuming, so we’re exploring the idea of creating a diagnostic checklist that can be used to identify whether communities are at risk of news poverty. If the CBC, the public broadcaster, has a newsroom in the community, does that mitigate against news poverty? Does proximity to a major media hub like Toronto make it more challenging for local news operations to survive? If we can answer these sorts of questions and identify what makes some communities more vulnerable than others to local news poverty, then we can create a checklist that citizens and others can use to assess whether or not they are at risk. It may be that our eight-municipality election study isn’t large enough for us to draw any conclusions, but I think we will gain some insights.

Local News Deserts Are Expanding. How Could That Affect Civic Engagement?

"Local News Deserts Are Expanding. How Could That Affect Civic Engagement?" by Kojo Nnamdi for WAMU Washington, DC Public Radio, Nov. 6, 2018

National Public Radio talk show host Kojo Nnamdi interviews Professor Penny Abernathy on the deleterious effects of the news industry decline on voter engagement and political life in the nation.

Newsonomics: Newspapers are shells of their former selves. So who’s going to build what comes next in local?

"Newsonomics: Newspapers are shells of their former selves. So who’s going to build what comes next in local?" by Ken Doctor for Nieman Lab, Nov. 6, 2018

As the quality of local news coverage declines, more newspapers become "ghosts" of their former selves. But ghosts can't live forever. Ken Doctor posits that a decade of forced newspaper diminished is now poised to tip off a deluge of newspaper closures, and examines what is most likely to fill the void.

Americans living in “news deserts” with few or no local news outlets may be in a bind now that it’s time to vote in the midterm elections.

"Americans living in 'news deserts' with few or no local news outlets may be in a bind now that it's time to vote in the midterm elections" by CNN Wire for WTHI-TV 10 (IN), Nov. 2, 2018

This article spreads the word about Penelope Abernathy's interview with Brian Stelter on CNN's Reliable Sources, and impact that news deserts may have on the upcoming midterm elections.

The Expanding Costs of Expanding News Deserts

"Upfront Segment - The Expanding Costs of Expanding News Deserts" by Antonia Juhasz for KPFA-Pacifica Radio San Francisco, Nov. 2, 2018

Lost newspapers are just the beginning of the damage. Antonia Juhasz interviews Professor Penny Abernathy on which residents are most likely to be harmed by a lack of local information, and how communities are expected to suffer in the long-term.