Changing Media Ownership and New News Barons: Implications for News Investment?

• In Event: I Will Follow: Local News Engagement

Abstract

Recent years have seen the rise of a new form of media ownership as venture capital firms have purchased distressed newspaper chains. How has this new class of ownership shaped the political reporting resources of the newspaper industry? On one hand, this shift in ownership may accelerate the decline of these newspapers, as they are now operated by owners with less intrinsic commitment to their civic missions. On the other, the tremendous economic pressure on the newspaper industry as a whole may limit the influence of ownership type, as even public-minded owners struggle to maintain a commitment to robust public affairs coverage. We explore this question using data on media staffing between 2000 and the present, drawn from digitized newspaper directories and an industry survey, and media ownership data. As part of our empirical strategy we leverage the rapid expansion of Alden Capital's newspaper ownership as an exemplar case to understand the influence of hedge fund ownership on newspaper staffing. Using a difference-in-difference design, we provide valuable insight into how the changing face of newspaper ownership shapes the resources available for newspapers to cover politics and inform public opinion.

Authors

• Erik Peterson, Texas A&M University

• Johanna Dunaway, Texas A&M University