HOT PURSUIT

It doesn’t work to trade headlines and deadlines for bottom lines.
That was certainly revealed Sunday night during an in-depth story on “60 Minutes” about how local newsrooms across the country are being strained by budget-slashing financial firms.
From the outside, it was a story revealing the grim state of affairs of local newspapers, largely in part because of how hedge funds have bought them up and gutted them down to almost nothing.
From an insider in the industry, it’s something I have noticed for quite some time. I refer to it as corporate greed.
“It’s not stop-the-presses news that the newspaper industry is in decline,” said Jon Wertheim, “60 Minutes” correspondent who produced the piece. “60 Minutes,” the most successful broadcast in TV history, is now in its 53rd year.
While readers’ habits have changed thanks to the internet, that is only perhaps a small part of the story of what’s going on in the newspaper industry. Wertheim’s goal with the story was to let people know about the damage being done by these hedge funds.
And we’re seeing it right here in Minnesota.
At the center of the story was a large ownership group called Alden Global Capital. Of particular interest to Minnesota, the hedge fund owns among other newspapers the St. Paul Pioneer Press and the Hutchinson Leader, a once thriving twice a week newspaper in the county where I grew up.
When hedge funds come in and slash resources and staff, the impact stretches far beyond the newspaper. It impacts communities, which often lose the watchdogs who hold those in power accountable.Wertheim maintains that “someone has got to solve this riddle” of the decline of newspapers.
The issue is hedge funds such as Alden don’t seem interested in solving the riddle. As the “60 Minutes” piece pointed out, there’s nothing wrong with making money. But Alden is making lots of money while at the same time slashing resources and staff at many of its papers.
For those regular readers of my column, I have touched on this very issue in the past. Just a few months ago I shared how Gannett, a large corporate media giant, has applied the same concept in running newspapers. Gut them out and squeeze as much profit as possible. This has happened to about seven weekly newspapers in south central Minnesota. Some of them include: Granite Falls, Montevideo and St. James. Gannett recently sold them to another company, which will hopefully breathe some life back into those community newspapers.
I still read the Hutchinson Leader, though it only comes out once a week now, and can’t believe what has happened to it over the past couple years since Alden took over. My former boss, Chuck Warner, used to own the Leader, and I think he would roll over in his grave if he knew what has happened to it.
Interestingly, the president of Alden refused to be interviewed by “60 Minutes” about his operation. However, it was pointed out that he has recently acquired a $19 million mansion. Somebody who is in essence the boss of thousands of journalists across the country should be ashamed of himself for not defending the operation. Or could it be that he is hiding something? There is certainly no hiding the fact that Alden has stripped communities like St. Paul and Hutchinson of their local news operations.
I am fortunate that I grew up working for somebody like Warner who cared deeply about local community newspapers. I have applied many of the principles he used in owning and publishing at least eight different newspapers over the years.
You might say Warner rubbed off on me.
“Your communities are very fortunate having such an outstanding product leading them,” Warner wrote in one of his last letters to me before he died a few years ago at the age of 93. And yes, he crafted his letters on a typewriter until the end.
Since I took over the Steele County Times 12 years ago, I have always reinvested any profits in the community and maintained a solid local newspaper. We have expanded our operation to two offices, added staff and increased the overall size of the paper. In fact, this week we are adding another veteran journalist to our staff.
To go along with our expansion, readers have responded. We have added hundreds of new subscribers over the past year and a half. If there is one thing I have learned with the recent growth, it’s that people want local news and they’re not afraid to support it.
I don’t understand why corporations like Alden can’t understand that.
Sadly, many of the communities being served by Alden and big conglomerates are coming out on the losing end as the hedge funds seem to be in hot pursuit of corporate greed.