Coronavirus crisis hastens the collapse of local newspapers. Here’s why it matters
Jeff vonKaenel has weathered wildfires, recessions and getting sued by a mayor in his nearly 50 years running weekly newspapers.
But the Sacramento newsman met his gravest challenge yet last month when public health officials urged cancellations of large gatherings to slow the novel coronavirus’ spread.
Four days after the Centers for Disease Control and Prevention’s advisory, the 69-year-old owner of the Sacramento News & Review and sister publications in Chico and Reno made the “brutal” call to stop the presses and lay off 40 staffers.
“This could be the death knell, not only for us but for the dailies that we compete with,” VonKaenel said in an interview.
He hopes the closure is temporary because he doesn’t want to let down employees or readers of his free alternative weeklies, which have fearlessly covered deadly police shootings, casinos’ dark side and Sacramento’s vibrant arts scene. But the advertisers he depends on — restaurants, breweries, small museums and concert venues — were swept up in the economic shutdown, and without their support, VonKaenel can’t cover the $45,000 a week it takes to run his Sacramento paper.
“I think I’m a pretty good salesman, but to convince businesses to buy ads for events they are not having, well, it’s pretty tough,” VonKaenel said.
Even before COVID-19, America’s newspaper industry was on life support.
More than 1,800 newspapers have folded since the internet became a prime source for news. In 2000, at least 55 million American homes subscribed to a daily paper, about double what it is today, according to Pew Research Center.
During the last two decades, newspaper chains, including McClatchy, which owns the Sacramento Bee and Miami Herald, and the former Tribune Co., owner of the Chicago Tribune, have tumbled into bankruptcy. Leveraged buyouts and consolidations have left companies mired in debt. The nation’s largest chain, Gannett Co., which owns USA Today and 250 daily newspapers, including the Arizona Republic in Phoenix and the Desert Sun in Palm Springs, merged with another large company in November. It now reaches 1 in 4 daily newspaper subscribers, but its stock has dropped 85% this year.
“This could be the death knell, not only for us but for the dailies that we compete with.”
Jeff VonKaenel, owner of the Sacramento News & Review
Newsrooms have been hollowed, print pages slashed. The Pittsburgh Post-Gazette, for example, prints just three days a week. Billionaire Warren Buffett, who had owned the Buffalo News since 1977 and was hailed as a savior of local journalism, in January unloaded his chain, which includes the Omaha World-Herald, to Lee Enterprises, which owns the St. Louis Post-Dispatch. Buffett previously conceded that newspapers were “toast.”
Since the Great Recession, nearly half of U.S. newspaper journalism jobs have disappeared, leaving fewer than 38,000 reporters, photographers and editors.
“It’s bad and it’s going to get worse,” news industry analyst Ken Doctor said, predicting the COVID-19 crisis will further strain local news: “It’s going to be the 2009 recession on steroids.”
In response to the pandemic, local governments and institutions — health departments, hospitals, schools and businesses — are making vital decisions that affect lives and livelihoods, highlighting how useful local newspapers can be.
The print industry’s demise has larger implications, Doctor and others say. Without reporters keeping tabs on city halls, state agencies and community organizations, there would be little accountability. Researchers have found that newspapers remain the nation’s most comprehensive, fact-based source of information.
The industry’s collapse has been driven by the exodus of longtime advertisers, who have shifted their money to internet giants Facebook and Google, leading to a precipitous revenue decline. Ad revenue to U.S. newspapers peaked in 2005 at $49.4 billion; it’s now less than a third of that amount, according to Pew Research Center.
Responding to the crisis, Facebook in late March announced $25 million in emergency funding for local news through its Facebook Journalism Project. “The news industry is working under extraordinary conditions to keep people informed during the COVID-19 pandemic. At a time when journalism is needed more than ever, ad revenues are declining,” Facebook said, adding that it would also spend $75 million to buy newspaper ads.
On Wednesday, Google Inc. announced its own $100-million journalism fund “to deliver urgent aid to thousands of small, medium and local news publishers globally.”
The need is great. Small dailies and alternative weeklies are among the most threatened. They rely on local businesses for advertising, rather than big-dollar national advertisers.
In Southern California, the alternative OC Weekly shut down in December and the LA Weekly has absorbed deep cuts and management turmoil. The Orange County Register’s parent, Southern California News Group, furloughed newsroom employees. And the Feather River Bulletin in Quincy, Calif., stopped printing this month — after 153 years.
The Los Angeles Times, which was thrown a lifeline in 2018 when biomedical billionaire Dr. Patrick Soon-Shiong purchased the paper along with the San Diego Union-Tribune, also is feeling financial pain. The paper has spent 18 months rebuilding its newsroom and expanding its online offering only to be walloped by the virus.
“Advertising revenue has nearly been eliminated,” California Times President Chris Argentieri wrote in a memo to the newspaper’s staff this week, outlining initial cost-cutting measures, including furloughs and trimming salaries of high-level managers during the crisis, including the eight top editors.
On Thursday, the company folded three of its community newspapers — the Burbank Leader, the Glendale News-Press and the La Cañada Valley Sun — because they were losing money. The Glendale paper was a pioneer, publishing since 1905. The Valley Sun popped up in 1946 as the postwar building and population boom began to reshape California.
The widespread financial woes come even as traffic to newspaper websites has doubled, Doctor said, and subscriptions to digital sites have dramatically increased as readers rally to support trusted news outlets.
“This [coronavirus] story has been transformational: It has shown the absolute uniqueness and value of local news,” Doctor said.
It’s a grim paradox, said Kevin Cody, who owns the 45,000-circulation Easy Reader News in Hermosa Beach.
“The irony is that interest in the product is skyrocketing,” Cody said. He laid off his staff, and they’re now collecting unemployment checks, but they continue to put the paper out. “There is an urgency to the situation, but the financial basis for the newspaper has just evaporated.”
Last week, 19 Democrats in the U.S. Senate urged their colleagues to provide coronavirus stimulus funding to news organizations.
“Local news plays an indispensable role in American civic life as a trusted source for critical information,” the senators wrote. Since the pandemic was declared, they said, local news outlets have been “providing communities answers to critical questions, including information on where to get locally tested, hospital capacity, road closures, essential business hours of operation, and shelter-in-place orders.”
Sen. Sherrod Brown (D-Ohio), one of the signers, said in an interview that local journalists serve a vital role by uniting communities and serving as government watchdogs.
“People want good coverage out of local and state government, and that’s something that only local media can do,” Brown said. “While the New York Times is a great paper, and you’re a great paper ... you can’t serve Akron, Ohio, very well,” Brown said.
A drama has unfolded in the newsroom where Brown’s wife, columnist Connie Schultz, used to work. The billionaire Newhouse family, through its Advance Local division, has maintained two separate newsrooms in Cleveland since 2013. One is a union shop that has long produced the Plain Dealer. The company established a bigger, nonunion staff for its website, Cleveland.com. The separate staffs contribute to both platforms.
Two weeks ago, the Plain Dealer axed 18 union journalists and four editors. Last week, an additional 10 journalists agreed to go. Now, there are just six Plain Dealer journalists, including four reporters who are union members. That’s a stark contrast from 20 years ago, when Cleveland’s newsroom teemed with more than 300 journalists. Award-winning investigative reporter Rachel Dissell, who started as an intern at the paper 18 years ago, was among those who volunteered for a layoff.
“This wasn’t the way I wanted things to end,” Dissell, 40, said by phone late last week, trying to hold back tears. Dissell said she and her colleagues were stunned by the timing of the cuts.
“Even as everything was happening, we were still working — calling people and telling their stories about how the coronavirus was affecting their lives,” Dissell said. “We’re journalists; we didn’t know what else to do.”
Advance Local declined to comment. But editor Tim Warsinskey, one of the six remaining Plain Dealer newsroom employees, said in an email that the 32 departures were “emblematic of a larger challenge our industry is facing.” He noted that, between the two staffs, Cleveland still has about 70 journalists, on par with other Midwestern cities.
In Northern California, Bradley Zeve, the founder and chief executive of the Monterey County Weekly, recently laid off seven members of his close-knit staff, including the managing editor.
“Worst day in my career,” Zeve said. “We’ve had some difficult times, but nothing has come close to this.”
His remaining staff has kept the paper going, and they branched out by sending daily email newsletters — an effort that has quickly grown to 46,000 subscribers.
“The silver lining is that we’ve done some amazing journalism in the last few weeks,” Zeve said. “But so many businesses that we relied on just closed down, and who knows how many of them will eventually come back. The future is unknown.”
That is what’s distressing VonKaenel, owner of the Sacramento News & Review. In a March 19 letter to readers, he warned: “It could be the end.”
Last year, VonKaenel and his wife had borrowed against their home to keep their operation afloat. Now, he’s waiting to learn whether his application for the federal Paycheck Protection Program will be approved. Concerned readers also have sent more than $40,000 in donations.
“The support has been incredible. We are so connected in all of our communities,” said VonKaenel, whose weeklies top 100,000 in circulation.
Even with the presses idle, VonKaenel has been trying to come up with a new business plan, such as teaming up with a nonprofit or a public radio station.
He worries about the loss of an alternative voice in communities. “It would just be horrible,” he said.
His Chico paper produced more than 300 stories that chronicled the deadly 2018 Camp fire and its aftermath. This month, a couple of weeks after being laid off because of the COVID-19 pandemic, the staff learned their coverage had won several prestigious California Journalism Awards.
His Sacramento paper gained surveillance footage and exposed that a deadly police shooting of a black man in 2016 wasn’t a “justifiable homicide” as the police chief publicly said. That chief later retired, and the press coverage led to increased scrutiny of police conduct and other reforms.
“I don’t think people fully understand the impact of having accurate information and the watchdog function, and the changes that can bring,” VonKaenel said.
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