Wall Street is destroying newspapers, not technology.

The great American newspaper ain’t what it used to be. At practically every newspaper in the country except for a fortunate few, hard times have reduced page count, eliminated news beats and resulted in the layoffs of thousands of journalists. The hardest hit, Margot Susca reports in her new book, Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy, have been the chain newspapers — Gannett, GateHouse, Lee Enterprises, et al. — purchased and squeezed by private equity firms like Alden Global Capital. Nationwide, the percentage of newspapers owned by private equity rose from 5 percent in 2001 to 23 percent in 2019; they include such storied titles as the Chicago Tribune, the Orange County Register and USA Today, as well as scores of smaller papers. Some papers have been reduced to zombie versions of their former selves as the new owners have shaved them down to minimize costs, depriving readers of the comprehensive coverage they enjoyed in the golden age of newspapers. Susca, an American University professor of journalism and a former newspaper journalist, writes that these new owners have turned their backs on what she thinks is the true purpose of newspapers — to serve democracy — in their pursuit of greed. For a taste of the book, see this excerpt in Neiman Reports. As someone who’s covered the industry’s growing travails for some time, you can detect a bit of skepticism from my questions. Is Wall Street really to blame for the fall of newspapers? By the end of our conversation, she was asking me, “Did you just brush up on your Milton Friedman?” This interview was conducted in person and via email and has been edited for length and clarity. Without using the dust jacket, give us the dust jacket pitch for Hedged. The book investigates the last 20 years of ownership and investment in the American chain newspaper industry. 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 our democracy. I ultimately reveal 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. How and why did newspapers become distressed properties? Newspaper executives pressured by private equity investors chose mergers and acquisitions as the strategy to face the digital future. It stacked debt as advertising losses also mounted. But before and after the recession, investment firms and the private equity divisions of Wall Street banks created conditions that left newspaper chains hamstrung and in debt for billions of dollars after a wave of acquisitions and consolidations. Different private firms then profited off newspaper bankruptcies or debt financing.