Private equity firms have increased numbers of American newsrooms shares from 5% to 23% in eighteen years since 2001. Apparently, due to pandemic troubled media companies has been subject to private market buyouts. The fear is real. Those involving in media start to worry about their slashed revenue. It’s been a bad weather for newsrooms.
There’s also been debate going around. Researchers from Califoria Institute of Technology and New York University argued that newspapers bought by private equity firms receive higher fares than the otherwise. So, people start to believe that private equity is a vulture capitalist ignoring democracy.
Based on the data, after private equity buyouts, there were shortages in editors and reporters. Payrolls were 7% lower after involving in private equity. Then there’s also decline in total articles written as much as 16.7% in five years after the buyouts.
Besides of quantity, there’s also decline in quality. Coverage focus shifted from local to national news. So, articles related to local politics decreased. Study from U.S. prestigious universities showed that the content decrease would affect the readers. Their views will be polarized.
There are basically many factors that create the disruptions. Lower voter turnout led to staff shortages. Less competitive mayoral elections also become the reason. Downgrade over daily and weekly contents also follow. Daily contents suffer 60% shortages almost the same with weekly contents.
Private equity do not randomly bought newsrooms. They are targeting the fragile one, attempting to turn around. Papers with low contents but high advertisements are likely the target of private equity. But some studies are also certain that private equity buyouts lead to newsrooms’ survival.
