Paper Cuts

Local newspapers in south-central Indiana have seen steep circulation and staffing declines since being purchased by companies with strong private equity ties. What have the ownership changes meant for the communities being served by these Hoosier newspapers?

Paper Cuts: When private equity firms control local newspapers is a project on the influence private equity has had on local news.

The Paper Cuts team includes editor Bob Zaltsberg, reporter Sarah Vaughan, data analyst Jainish Shingala, researcher Cathy Knapp, digital editor Katy Szpak, digital producer Eoban Binder, and reporter George Hale.

Chapter 1: Ownership changes accelerate declines in area newspapers>>

Listen to the Radio Version of This Series:

The disintegration of local newspapers in South-Central Indiana shows up in staffing, circulation and local news content. Bob Zaltsberg walks through the history of Schurz Communications and the sale of its newspapers.

Paper Cuts: Part 1

Transcript

00:00:00 [Bob Saltzberg]: The disintegration of local newspapers in South Central Indiana shows up in staffing, circulation, and local news content.

00:00:07 [Bob Saltzberg]: Some declines began under family-owned Shares Communications Incorporated, but the freefall began early in 2019 after SCI sold its publishing division to Gatehouse Media and its private investment firm owner, New Media Investment Group. The newspaper's relationship with local communities changed too.

00:00:27 [Bob Saltzberg]: Todd Scherz was president and CEO of the Indiana-based company then. He says, of course, the company wanted to make money, but its core mission was tied to journalism and serving communities.

00:00:38 [Todd Scherz]: It was very journalism-based in terms of presenting facts, helping people get to the truth, and then how people can use that to make a better community, a better society, a better nation. So very idealistic was what the mission was, but it was very core and it was very journalism oriented.

00:01:04 [Bob Saltzberg]: Private equity owners have one primary goal, to maximize profits.

00:01:09 [Bob Saltzberg]: Tim Franklin grew up in Mooresville, Indiana and graduated from Indiana University. Now he leads the local news initiative at Northwestern University's Medill School of Journalism.

00:01:19 [Bob Saltzberg]: He notes that private equity firms argue that they're saving some local newspapers by buying them when the family owners want out of the newspaper industry and might otherwise shut them down. But there's another more damaging side to that argument.

00:01:33 [Tim Franklin]: Private equity is there for a return for their investors and that they are going to harvest the assets of these local news organizations for as long as they can and that they're not really invested in the communities in which they own these publications. And I think that we're seeing this effect kind of all over the country.

00:02:00 [Bob Saltzberg]: Ryan Gunterman is a former Bloomington High School North teacher who has worked in journalism education for 20 years. He says ownership matters.

00:02:09 [Ryan Gunterman]: I think it matters when it comes to their true commitment to the organization and the mission. And when your mission is profit and when your mission is for your stockholders to be happy, that doesn't always necessarily lead to great things.

00:02:31 [Bob Saltzberg: Academic and industry groups have studied the ownership issue and cite various effects when the profit goal dwarfs community leadership.

00:02:31 [Bob Saltzberg]: Government operates unchecked, important issues go uncovered, corruption can increase, taxpayer spending can become reckless, and voter participation can diminish.

00:02:49 [Bob Saltzberg]: Gatehouse went on to take over Gannett, the largest newspaper chain in the United States. It even took its name. Former Schurz owned weeklies in Ellettsville and Clay City have closed. Gannett sold newspapers in Orange County, laid off dozens of area journalists, shut down printing presses in Bloomington and Bedford, and sold the newspaper buildings.

00:03:09 [Bob Saltzberg]: Photojournalist Chris Howell worked for the Herald Times in the last days of family ownership and for a short period after private equity took over. He feels a loss of community.

00:03:20 [Chris Howell]: The sense of community, the sense of knowing your neighbor without really knowing your neighbor, but you understand what's going on in the community and you have that sense of belonging. I really feel like that is what's missing.

00:03:33 [Bob Saltzberg]: Gannett's leaders declined to be interviewed for this report.

00:03:37 [Bob Saltzberg]: For WFIU News, I'm Bob Saltzberg

What does a community lose when it loses its reporters? Sarah Vaughan spoke with a former Bedford Times-Mail journalist to find out.

Paper Cuts: Part 2

Transcript

00:00:00 [Sarah Vaughan]: The Bedford Times-Mail in Lawrence County, Indiana, exemplifies the decline in local news coverage.

00:00:06 [Sarah Vaughan]: Crystal Shetler spent 25 years at the Times-Mail copyediting, designing the pages, and reporting on her own community of Mitchell. She ran the newsroom her last few years there.

00:00:16 [Crystal Shetler]: You know, I've loved for so many years telling the stories of your friends and neighbors. And still to this day, I will see something and I go, oh, I'd love to write a story about that. If I still worked at the newspaper, I would totally grab that story and write about it.

00:00:34 [Sarah Vaughan]: In the newspaper's heyday, Shetler recalls, the Times-Mail had more than 30 journalists and had active features, sports, and photography departments. She described their work as robust. Now the Bedford Times-Mail has no local reporter and the building is up for sale.

00:00:49 [Sarah Vaughan]: Shetler says much of the content is just repeated from Gannett's other papers. She and her husband have canceled their subscription, a decision she described as heart-wrenching. She says it feels like they're in a news desert.

00:01:00 [Sarah Vaughan]: What does a community lose when it loses reporters on the ground?

00:01:04 [Crystal Shetler]: You lose the stories of the semi-state games and the state championships. You lose the stories of the 100th birthdays and the fish fries. You lose the stories of the Persimmon Festival parade and who had the winning persimmon pudding. You lose those pieces that make us a unique community.

00:01:30 [Sarah Vaughan]: Shetler is also concerned about the lack of election coverage. She recalls the Times Mail ran race previews and, for heavily contested races, partnered with area chambers of commerce to host forums to allow voters to hear from candidates directly.

00:01:44 [Sarah Vaughan]: Now, without a single comprehensive source for local news, Shetler says the public turns to social media posts and websites that may not be guided by journalistic standards for fair and balanced reporting.

00:01:56 [Sarah Vaughan]: Finance experts say private equity-backed ventures are not concerned with preserving jobs or quality news content. And they point out that some industries benefit from private equity involvement. The priority is to maximize profits. It's not about being good or bad, one expert said. But researchers of local news declines are finding private equity ownership has consequences on local engagement, as well as voter awareness of local issues and voter participation.

00:02:23 [Sarah Vaughan]: Private equity-backed media organizations often cut their government and political staff first, which can make up as much as 80% of a newsroom, according to Joanna Dunaway of Syracuse University and Eric Peterson of Rice University. The watchdog function local newspapers performed in holding elected officials accountable is decimated. Misinformation rises to fill the gaps.

00:02:45 [Mark Kruzan]: I literally believe it's a threat to democracy. And I think the bigger problem than just the acquisition of local media by equity firms, a bigger problem is people not realizing it's a big problem.

00:02:59 [Sarah Vaughan]: These are the first words out of former Bloomington Mayor Mark Kruzan's mouth when asked about the influence of private equity on local news.

00:03:07 [Mark Kruzan]: The loss of that accountability for people in public office is a blessing and a curse for politicians, nothing but a curse for the general public.

00:03:18 [Sarah Vaughan]: Journalist and educator Cheryl Osley Jackson of the Media School at Indiana University says newspapers are also important for sparking and elevating local conversations about social justice issues, especially in mostly white, mostly middle-class communities.

00:03:33 [Sarah Vaughan]: Jackson is African-American and used to write a diversity column for the Republic newspaper in Columbus, Indiana.

00:03:40 [Cheryl Osley Jackson]: Because if you have a reporter in the community who has their ear to the ground and they understand the community and they understand how the community is, you know, they have similar interests and what they care about, you can take something like a George Floyd case and localize it in a way that includes the community and maybe enlighten some people.

00:04:00 [Sarah Vaughan]: From nonprofit leaders to county council representatives to local historians, residents in South Central Indiana say they often don't know what's happening in their own communities.

00:04:10 [Sarah Vaughan]: In our next episode, we'll look at two former Gatehouse and Gannett employees who aim to change that by creating new startups and even bringing back the community newspaper.

00:04:21 [Sarah Vaughan]: For WFIU News, I'm Sarah Vaughan.

What's being done to preserve local news? Sarah Vaughan spoke with Hoosier journalists who are creating community-driven news to learn more.

Paper Cuts: Part 3

Transcript

00:00:00 [Sarah Vaughan]: Stephen Crane believes in print journalism. Crane is the managing editor of the Morgan County Correspondent. A weekly newspaper he and a diverse group of community members rallied to create. They didn't want to just sit by watching two area newspapers, the Mooresville-Decatur Times and the Reporter Times in Martinsville, be reduced to ghost papers after being bought by Gatehouse, now known as Gannett.

00:00:23 [Sarah Vaughan]: Crane had witnessed the changes in the two newspapers firsthand, hired in 2017 to run both for Schur's communications, he oversaw a newsroom providing what he refers to as the meat and potatoes coverage locals want. City and county government, schools, businesses, sports, and 4-H clubs.

00:00:42 [Sarah Vaughan]: But once the papers changed hands to Gatehouse on February 1st, 2019, and then Gannett that fall, Crane said it became clear pretty quickly that corporate ownership was going to be detrimental. Staff members were cut and priorities shifted toward coverage that would guarantee clicks online, especially restaurants, arts, and entertainment stories.

00:01:01 [Stephen Crane]: By and large, we got empty platitudes about producing local journalism that matters that never translated at the local level relative to the resources required. If you're wanting to produce local journalism that matters, you'd need people to do that.

00:01:18 [Sarah Vaughan]: Crane and some community investors wanted to buy back their hometown paper, but Gannett was unwilling. Now, Crane is a man on a mission to create a local newspaper of record dedicated to true community journalism. At a soft debut at the county fair in July, 623 subscribers signed up before the 1st edition went to press, Crane said, and another 220 signed on by the time the 2nd edition went out. A little farther south in Owen County, journalist Nicole DiCrisio-Beau has launched the local news website, the Owen News.

00:01:50 [Sarah Vaughan]: It's an effort to fill the news gap left when private equity-controlled news organizations took control of the Spencer Evening World. Until 2019, the Spencer Evening World was owned by local families, its own employees, and most recently, the family-owned newspaper chain, the Hoosier Times.

00:02:06 [Sarah Vaughan]: In addition to local government coverage, the paper offered the kind of local stories and information area residents relied on, including obituaries, community events, business stories, education and school sports coverage. But since 2019, under Gatehouse and later Gannett, the paper has been reduced to a weekly and now much of its content comes from outside Owen County.

00:02:29 [Sarah Vaughan]: Besides the sheer loss of local content, Owen County Community Foundation CEO Janet Rummel has seen unhealthy social media interaction since the local newspaper's decline, including polarization from national politics eroding the area's sense of community.

00:02:44 [Janet Rummel]: It used to be that a lot of us around here with very widely differing political views, maybe on national issues, would still come together and rally around each other around a local issue or a local event. But I've seen that start to fall apart a little bit. And so we really are seeing a divide, a larger divide among our populace here. And a lot of it has to do, again, with where they're getting their news and just really a lack of what to rally around.

00:03:24 [Sarah Vaughan]: Rummel says the need for a trusted news source that creates a shared culture and things to rally around came out of focus groups held as part of the foundation's strategic planning process. The foundation hopes that trusted news source comes from DeCriscio Bowe and the Owen News Project.

00:03:40 [Sarah Vaughan]: Originally from Fort Wayne, DeCriscio Bowe worked for the Spencer Evening World for a little over 2 years, during which she fell in love with Spencer and its close-knit community. Laid off in 2019, DeCriscio Bowe continued as a freelancer, supplementing the work of the paper's 1 remaining reporter.

00:03:56 [Nicole DeCriscio Bowe]: I realized that whatever I was contributing as a freelancer was the only local content. So then the next question was, is this still serving the community?

00:04:09 [Sarah Vaughan]: Community leaders and DeCriscio Bowe worked together to establish the Owen News as a non-profit with, quote, a mission to strengthen Owen County and promote civic engagement, unquote. The Community Foundation provided a large impact grant plus a $10,000 planning grant and has included the Owen News in its 2024 funding priorities.

00:04:29 [Sarah Vaughan]: DeCriscio Bowe is recruiting citizen journalists and training them how to report with the help of an online course called Earn Your Press Pass. Two boards guide the nonprofit's effort, a community board that includes an assistant school principal, an attorney, a local artist and farmer, and a former Evening World editor. A journalism advisory board of working and retired journalists from around the nation will provide additional expertise and resources.

00:04:54 [Sarah Vaughan]: DeCriscio Bowe believes in the future of the Owen News because after surveys and listening sessions, she says its board and its voice reflect the community.

00:05:04 [Nicole DeCriscio Bowe]: It's about having something that the community can be proud of for the community, of the community, about the community, and by the community.

00:05:13 [Sarah Vaughan]: She hopes the online publication will be able to add a print edition in the future. For WFIU News, I'm Sarah Vaughan.