Thread by @doctorow

Last May, the profitable @chicagotribune was acquired by the notorious vulture firm Alden Global Capital. They suffered waves of downsizing, including a sell-off of the iconic Tribute Building. Today, a skeleton crew puts out the Trib from "a newsroom the size of a Chipotle."

1/

If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2021/10/16/soc…

2/

In a long, deeply reported article about Alden for @TheAtlantic, @mckaycoppins catalogs the civic losses that Chicago suffered when its major daily newspaper was bought and strangled by Alden and its secretive, far-right owners.

theatlantic.com/magazine/archi…

3/

"After a powerful Illinois state legislator resigned amid bribery allegations, the paper didn’t have a reporter in Springfield to follow the scandal. And when Chicago suffered a brutal summer crime wave, the paper had no one on night shift to listen to the police scanner."

4/

Remember, the Tribune was profitable. So were many of the 200+ other newspapers that Alden now controls, and which it is slowly strangling.

5/

If you learned about business from Econ 101 high school civics, this is baffling. How is it good business to buy a profitable business and render it UNprofitable?

6/

The short answer is #financialization - the end state of capitalism, in which the productive economy is destroyed by the socially useless finance sector.

7/

Here's Alden's playbook: "Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds."

8/

This is a formula that "can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers it’s alienating," or, @kdoctor put it, "It’s the meanness and the elegance of the capitalist marketplace brought to newspapers."

9/

Who is Alden? The details are shrouded in secrecy. They won't say who their investors are, though, when Congress forced them to put SOMETHING on the record, they admitted, "there may be certain legal entities and organizational structures formed outside of the US."

10/

That doesn't (necessarily) mean they're destroying American businesses for the benefit of offshore oligarchs - my guess is it means they're part of the "onshore-offshore" world revealed by the #PandoraPapers:

pluralistic.net/2021/10/04/avo…

11/

Ultrawealthy Americans send their money to finance-blighted treasure islands to disguise its ownership, and then it's fired back across the ocean, resting briefly in an opaque South Dakota LLC, before it lands right in the middle of your city, destroying your businesses.

12/

Apart from "certain entities formed outside the US," who are Alden? It was founded by Randall "Randy" Duncan Smith, a pioneering corporate raider and secrecy freak who invented "vulture investing," buying and wringing out aerospace, drilling and other companies in the 80s.

13/

By 1991, he was being celebrated and condemned for "profiting from other people’s misery," with a reputation for sociopathic selfishness he embraced, reportedly putting a stuffed vulture in his lobby.

nytimes.com/1991/03/29/bus…

14/

Despite the gallows humor, it seems Smith was aware that destroying peoples' livelihood for his personal gain would make him unpopular. He ceased talking to the press and began divesting every could years "to avoid ending up on lists of the world’s richest people."

15/

As with the Sackler crime family, Smith went to great lengths to kill public photos of him - the shooter who took the only photo of Smith online told Coppins the photo was "no longer available" and wouldn't say if Smith had bought the rights.

nypost.com/2012/07/26/vul…

16/

Smith - a major Trump donor - hates the press. The only one of his publications he ever seems to have ever been happy about was the New York Press, his brother Russ Smith's vanity project, a freesheet that primarily exists to heap scorn upon journalists.

17/

Hating the press is a weird look for a guy who owns 200 newspapers, but Smith isn't a newspaper-owner, he's a finance ghoul. The reason he's bought up all these newspapers is that he knows that YOU are sentimental about the role they play in promoting democracy.

18/

He knows that he can make the product worse, abuse his employees, and charge more, and you'll keep paying for the paper as part of your civic duty. He owns 16 walled mansions in Palm Beach alone. He's not a big civic duty guy - but he knows you are.

19/

Alden is a machine for destroying newspapers. In Montgomery, PA, the Alden paper's coverage of "more than a dozen elections" was done by "a single reporter working out of his attic."

20/

The East Bay Times went Alden and laid off 20 people, a week after winning a Pulitzer. The Monterey Herald pulled investigators off long-term reporting projects to churn out multiple stories a day.

21/

The Denver Post saw 2/3 layoffs and relocation to a toxic building that sent many of them to the hospital. The Vallejo Times-Herald laid off all but one of its reporters, covering "police, courts, hospitals and business."

22/

After cutting the Times-Herald's bullpen to one, Alden switched to a printer more than 100 miles from town, resulting in newspaper delivery delays of up to 24 hours. The newsroom shuttered and relocated to a single rented room in the Chamber of Commerce.

23/

Smith's co-founder at Alden is Heath Freeman, a man who oozes contempt on the rare occasions when he visits newsrooms he owns ("What do all these people do?").

24/

Freeman and Smith treat newsrooms like oil wells: They "hope the well never runs dry, but he’s going to keep pumping until it does. And everyone knows it’s going to run dry."

25/

Freeman agreed to talk on background with Coppins, and when he did, he trotted out a familiar talking-point from the news industry: "We must finally require the online tech behemoths, such as Google, Apple, and Facebook to fairly compensate us for our original news content."

26/

This has always been a hollow charge, but coming from Freeman, it's especially empty. Freeman is a man who personally bought over 200 newspapers, and then, profitable or not, began to drive them into the ground.

27/

Freeman and Alden make it clear that we need to save the news, not newspaper proprietors. Newspaper proprietors are not the saviors of democracy or the torch-bearers for civic values.

28/

After all, the Tribune's board of directors voluntarily sold the chain to Alden, despite the fact that it was profitable, knowing that Alden would raid and destroy it. They did that because they valued a one-time payment more than the Trib's ability to serve its community.

29/

They were carrying out a tradition that dates back to the dawn of corporate raiders - the era in which Smith was inventing the vulture capital business, in which lives, communities and productive firms were liquidated to make money for financiers who made nothing but misery.

30/

That was the era in which the seeds of the newspaper industry's failures were planted. After Reagan ended meaningful antitrust enforcement, local papers that had been owned by patrician news-families were scooped up and merged into chains.

31/

The former owners were wildly flawed, using town papers to serve their personal agendas and vendettas, but they were paragons of civic virtue compared to the corporate news-barons of the 80s, who found "efficiencies" by firing competing reporters.

32/

Why have two reporters in the state house, or New York, or Paris, when one reporter could do the job? Eventually, those reporters were shown the door - why pay a single reporter for your chain when a wire service stringer can do the job?

33/

Closer to home, more "efficiencies" came from firing the shoe-leather ad-salesforce who knew every business in town, centralizing sales into a national 800-number boiler room that made cold calls or waited for customers to come to them.

34/

The corporate owners loved outsourcing. Why own a building when you could sell it and rent it back? Why own your presses when you could sell them and then pay for their use?

35/

Any story of the news business's decline that starts with "Craigslist killed classified ads" is starting decades too late. The newspaper business had weathered innumerable technological shocks - telegraphs, radio, TV, cable.

36/

Newspapers endured these storms because they had ballast to stabilize themselves: skilled employees, physical plant, cash reserves and their own offices, where they didn't have to worry about a landord raising the rent.

37/

All that ballast was thrown overboard by the corporate masters in the 80s, so when the 90s arrived, the newspapers were tempest tost - when Craigslist emerged, there was no salesforce with decades of personal relationships with local merchants to offer a unique advantage.

38/

When the news went online, it became glaringly obvious that every newspaper was running the same Reuters and AP copy, floating in a thin gruel of local interest stories written by underpaid interns.

39/

When lost subscription revenues and lost ad revenues crashed over the papers, they had no cash reserves - those had been paid out as special dividends long before - and their landlords wanted paying on the buildings they once owned.

40/

Alden is the latest vulture capitalist in a long line that bought and gutted and sloughed off papers. Warren Buffet LOVES to buy and kill competing newspapers - the reason Alden owns the last paper in town is that Buffet killed the other one.

pluralistic.net/2020/08/10/fol…

41/

The reason these dead-eyed wreckers love the "Big Tech is ripping off the news" story is that it represents a way to effect a pure transfer from tech monopolists to newspapers, without any productive activity taking place.

42/

Let's be clear: directing vast torrents of traffic from the web to newspaper websites is not a form of theft. Links are not copyright infringement.

Which is not to say that Googbook isn't robbing the papers. They are robbing them blind.

pluralistic.net/2021/03/18/new…

43/

They're robbing them by monopolistically rigging ads so advertisers pay more, publishers get less, and Big Tech scoops up the difference. Googbook illegally colluded to fix rates. Google rigged marketplaces to punish publishers who used rival auction services to place ads.

44/

They lie to advertisers about how many times they've shown their ads, and to whom. They lie to publishers about how much ad revenue they've collected on their behalf.

pluralistic.net/2020/10/05/flo…

45/

Big Tech doesn't "steal content." They steal MONEY. The thing is, if we unrigged the ad markets, then the finance bros who own most of the newspapers would have to run their businesses, rather than wringing them dry and discarding them.

46/

That's why they keep shoveling the "stolen content" horseshit. Debt-leveraged, financialized papers "owe" their proprietors vast sums. If they can force Googbook to send them 10% of their ad rev, they can use it to "pay the debts."

47/

They absolutely, positively will NOT use that money to make their newspapers stronger. If that was the case, then Alden would have used the millions from the selloff of the Tribune building to hire more Tribune reporters - not line its pockets.

48/

Big Tech and Alden aren't really enemies. They're on the same team: the no-corporate-taxes, no-unions, no-regulation, no-antitrust team. Fixing Big Tech - with breakups, merger scrutiny and regulation - would be terrible for Alden.

49/

Alden doesn't want to fix Big Tech, they just want to we their beaks. Alden doesn't want to save the newspapers, they just want to bleed them out and find another profitable, productive industry to stripmine.

eof/