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**JULY 12, 2023**
Kuttner on TAP
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**** As Goes Maine?
A hopeful story about the survival of independent local newspapers
A nonprofit group dedicated to rescuing local newspapers from either
collapse or private equity pillaging is buying 22 local papers in Maine.
The National Trust for Local News
<[link removed]>,
founded just two years ago, will purchase five of the state's six
dailies
<[link removed]>
and 17 weeklies from a private company called Masthead Maine owned by
Reade Brower, who made his money in direct mail. (How one guy managed to
get control of all the important newspapers in a state is a story for
another day.)
The
**Prospect** has long been interested in the takeover of local papers by
private equity companies. In 2017, I wrote an investigative piece with
Ed Miller titled "Saving the Free Press From Private Equity
<[link removed]>." We
were reporting on a sickening trend with immense implications for
democracy and civic life.
As daily newspapers became less profitable with the rise of online
competitors for both news and ad revenue, private equity operators were
swooping in and buying up papers by the thousands, and making profits by
paring staff and news coverage to the bone. Since then, the venerable
Gannett chain was bought by GateHouse, one of the most predatory of the
private equity outfits, which took over the Gannett name.
But there was a silver lining to our story that had not yet come to
fruition: Local dailies and weeklies could actually turn a profit with
well-staffed newsrooms if owners could be satisfied by returns in the 5
to 10 percent range rather than the 15 to 20 percent that was typical in
the pre-internet era and that is demanded by private equity players.
Despite the internet, local merchants still rely heavily on display ads,
which are profit centers. And well-run local papers attract more display
ads.
Since then, there has been a slowly growing movement to save the local
press by returning it to community or nonprofit ownership. My friend and
co-author Ed Miller has gone on to found an exemplary weekly, The
Provincetown Independent <[link removed]>, which
has thrived at the expense of the GateHouse-owned
**Provincetown Banner**, which has lost most of its staff and
circulation. Between 2017 and July 2022, over 135 nonprofit newsrooms
were launched, according to the Institute for Nonprofit News
<[link removed]>.
Another hopeful sign is that even by laying off staff and reducing
coverage, private equity companies are not making the money they hoped
for, so some of these papers are on the auction block and can be saved.
Maine is not a typical case, since Reade Brower is a relatively benign
monopolist
<[link removed]>
and was willing to work with the National Trust for Local News.
The trust, still in its infancy, has an operating budget of only about
$1 million, which means it does not have its own money to finance
community buyouts. The terms of the deal were not disclosed, so it's
not clear whether the trust found a benefactor or whether Brower is
selling the Maine papers for a nominal sum.
The Trust uses a variety of ownership models. Its first major deal was
in Colorado, where it now owns 24 local newspapers
<[link removed]> in that state in collaboration
with The Colorado Sun. It has funders that include the Gates Family
Foundation, the Google News Initiative, and the Knight Foundation. The
MacArthur Foundation also recently announced a major initiative to save
local news.
This is the beginning of a very hopeful trend to save priceless civic
assets from predatory capitalism at its worst.
~ ROBERT KUTTNER
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An upcoming House Judiciary Committee hearing is an attempt to force her
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Why Gorsuch's Opinion in '303 Creative' Is So Dangerous
<[link removed]>
The Court could have framed the decision more narrowly. It didn't. BY
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The Truth About the Los Angeles Hotel Workers' Strike
<[link removed]>
Despite recent wins, union members still can't afford to live anywhere
near where they work. BY MARK KREIDLER
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