Forbes: Hedge Funds And Newspapers: A Bad Mix

by Michael Posner

Two news stories this week captured conflicting forces at play in the struggle to preserve journalism. On the positive side, Facebook announced that it will invest more than $300 million over the next three years to help support local news organizations globally. But while Facebook was promising to help smaller news organizations “grow and thrive,” the same sort of local outlets came under existential threat from another direction.

On Monday it was reported that a hedge-fund-controlled company called Digital First Media has made a hostile takeover bid for the Gannett chain, which owns more than 100 mostly local daily newspapers, and nearly 1,000 weekly publications. Its flagship is USA Today, which circulates nationally. In terms of daily circulation, Gannett’s publications make it the largest news publisher in the country. But today, Gannett’s bottom line is not strong, and as a result, it is “in play” in the commercial markets.

 

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