Billionaire Owners and Hedge Funds: A Devastating Combination
The news business is in a tailspin. Firings and closures are decimating its ranks. Publications and websites are folding. Revenue is plunging. Credibility is at an all-time low. And AI is starting to gobble up jobs. Worst of all, after the pandemic, economic anxiety and political gridlock, interest in news is declining.
In Los Angeles, the earthquake has already struck. The billionaire owner of the once-mighty Los Angeles Times, Patrick Soon-Shiong, has fired the editor and more than 20 percent of its staff, devastating the Washington bureau and several key units. The billionaire owner of the Washington Post, Jeff Bezos, has given buyouts to 240 staffers, decimating the metro staff and losing many of the paper’s biggest names.
If newspapers aren’t owned by these wealthy moguls, they’re increasingly controlled by hedge funds whose strip-mining tactics have reduced them to a skeleton of their former selves. From Time (15 percent laid off) to Business Insider (8 percent), from Sports Illustrated (blown up) to BuzzFeed News (shuttered), the carnage is everywhere.
And just yesterday, the Messenger, a news and aggregation site launched by Jimmy Finkelstein, former owner of the Hill, shut down after less than a year, having lost $38 million and some staffers lured from top publications. CNN just had a major round of layoffs. Cable news audiences are aging, and cord-cutting is growing in popularity.
The Impact on Local Reporting
The impact is greatest on local reporting, with far fewer folks to check up on their elected officials, especially in smaller markets. Nonprofit newsrooms and independent creators are emerging, but they can’t deny the decline of the journalism business.
The Role of Political Bias
Many articles about the decline of the news business overlook the importance of political bias. Complaints about a liberal tilt have been present for years, but now, in the Trump era, half the country believes the media have become the opposition party. During the Biden presidency, a growing percentage of those on the left have also lost trust in the business.
With Red and Blue America filled with anger, each side views the other as evil and dangerous, with the press having forfeited its standing as a neutral arbiter of facts.
A Meltdown Amidst a Booming Economy
“What makes this so unnerving,” writes Paul Farhi in Politico, “is the fact that the meltdown has come amid—and in seeming defiance of—a generally booming economy.” The ranks of professional journalists keep declining even as overall unemployment stays low, incomes rise, and the stock market reaches new heights.
Beyond news fatigue, social media platforms like Facebook have reduced the amount of news that users see in their feed, wiping out a major source of traffic. Google has also taken a fair share of advertising revenue.
The Search for Solutions
The decline of the news business raises the question of whether journalism will become a hobby done on the cheap or for donations, without much of a career path. Some suggest government subsidies, but that raises serious conflict questions.
Just as television didn’t wipe out radio, journalism will have to morph into new and more compelling forms to survive. The rise of podcasts in recent years is a testament to this. However, news outlets must convince the public that their product is worth buying if they want to thrive.
