Private equity is buying up America’s newspapers

AMERICA’S LOCAL newspapers have been struggling to stay afloat for years. Since 2005 roughly 2,200 of them have folded. Private-equity firms, which often swoop on businesses in distress, have descended on the industry. The share of American newspapers owned by private-equity groups increased from 5% to 23% between 2001 and 2019 (see chart). The covid-19 pandemic has presented new opportunities for buy-outs of troubled media companies. That has led many of those who read the papers, or write for them, to fear that buy-out barons’ readiness to slash costs and seek out new sources of revenue will be bad for newsrooms. New evidence suggests that things are not quite that simple.In a new working paper, researchers at the California Institute of Technology and New York University compare how newspapers that were purchased by private-equity firms have fared relative to those that were not. Some of the findings seem to confirm the fear of those newspaper readers and writers who see private-equity types as heartless vulture capitalists unconcerned about democracy.