Before she walked into the meeting room with the rest of her colleagues at the Denver Post two weeks ago, 25-year-old reporter Elizabeth Hernandez knew the axe was going to fall. What she didn’t know was how deep the coming cuts would be.
For the second time in as many years, Lee Ann Colacioppo, the editor in chief, announced layoffs at the Pulitzer Prize-winning newspaper. Thirty jobs will be cut from the staff of just under 100; Hernandez broke into tears at the news.
Over the past decade, newspapers across the country have seen their profit margins, coverage and staff shrink. The marked decline has left many a town and city without a staple of its community: a healthy newspaper.
Denver’s media ecosystem has been declining for years, the largest hit coming with the closure of the Rocky Mountain News in 2009. The final edition of the paper reached an estimated audience of 350,000. The paper’s staff had won four Pulitzer Prizes since 2000.
The death knell has long been ringing for the industry as more and more newsrooms weather layoffs. While reporters and editors suffer the most immediate impact, it’s often the readers who shoulder the most destructive burden. When coverage shrinks, readers are left with a void in their information intake; society, democracy and community are all impacted when newspapers collapse.
Reasons for the industry’s decline are myriad; some blame the rise of digital platforms, others place the onus on declining advertising revenue, while still others look to decreasing subscription and circulation numbers. In truth, it’s probably a combination of those factors and more that have influenced the collapse.
“The advertising end of the business is difficult and getting more difficult all the time,” David Chavern, CEO of the News Media Alliance, said. “I don’t think there’s anybody that’s figured it out completely.”
Chavern fears that if newspapers continue to die out in local communities, fake news will rise to fill the curiosity gap.
“Fake news will become very much a local experience, and very much a destructive one. If we get disappointing journalism, then we lose civil society.”
“Fake news will become very much a local experience, and very much a destructive one,” Chavern said. “If we get disappointing journalism, then we lose civil society.”
Advertising revenue for the industry as a whole has steadily fallen over the past decade. In 2016, the entire industry brought in just over $18 billion in advertising dollars. Compare this to 2006, a high water mark when the industry made nearly $50 billion in advertising. These losses have forced many papers to consolidate under larger and larger ownership umbrellas.
One such umbrella is Alden Global Capital, a hedge fund that became a controlling stakeholder of MNG Enterprises, which owns the Denver Post along with a plethora of other newspapers. In its heyday, the Post employed over 400 journalists to cover the city, state and nation. A decade of layoffs have threatened the paper’s ability to continue the award-winning coverage it has done in the past.
“There’s one less reporter at city council meetings, we’re not watching the suburbs like we used to,” Keilan Nicholson, Post reporter and chairman of the newsroom unit of the Denver Newspaper Guild, said. “We want to be the light that shines on suburban cities. … And it’s just gotten more and more difficult to do that.”
Alden, lambasted by many of the Post’s employees for their divestment, is currently the defendant in a lawsuit brought forward by Solus, a minority shareholder in the company.
In 2017, Alden amended the stockholders’ agreement to “remove the information-rights covenant and eviscerate the Company’s reporting obligations to stockholders,” according to the lawsuit. This restructuring, which the plaintiff alleges allows Alden to obfuscate investments that aren’t related to the success of its newspapers, is at the heart of the lawsuit. Since the agreement was amended, the lawsuit claims that Alden’s financial reporting has been “nearly useless.”
Lawyers for Sola LTD and Ultra Master LTD, collectively known as Solus, did not return requests for comment. Similarly, counsel for MNG Enterprises, Inc. did not return requests for comment.
While the industry is surely struggling, there are bright spots. Chavern said local newspapers have an information monopoly on the towns they operate in, affording a window of opportunity for experimentation.
“We have a period of time where we can figure out how to make a digital business work while we still have a print business that helps support the whole enterprise,” he said.
Some aren’t so optimistic. Amy Webb, a futurist and founder of the Future Today Institute, said the time for newspapers to rethink their sustainability models is overdue. She said newspapers need to find different funding models, which begins at the research and development level.
“You have to look at this enduring problem with a new perspective,” Webb said. “I’m not talking about making small changes to local news businesses, like adding in an events vertical. I’m talking about a radically different business model for news writ large.”
While the industry grapples with the steady drumbeat of layoffs and shrinking margins, reporters like Hernandez are struggling to simply see another day. Working at the Denver Post was her dream job, one that’s now in jeopardy with the latest round of impending cuts.
“Anyone would be lucky to get a job there -- if the vulturous hedge fund wasn’t our owner,” she said. “It’s a pretty grim reality.”