In 2019, I walked away from my dream job, as editor-in-chief of Deadspin, three months after a private equity firm bought our parent company. Our new CEO seemed categorically uninterested in the work we did, what made us successful, or even what we could improve; he just wanted to issue often nonsensical directives. Three months after I left, the rest of the staff followed me out the door. Our loyal readership evaporated overnight. Deadspin is now run by a Maltese gambling company that uses the site to drive traffic to online casinos.
The experience made me obsessed with how private equity works, and why their deals so often go wrong. My book Bad Company: Private Equity and the Death of the American Dream (out June 10) follows four protagonists whose lives were upended by private equity involvement in the retail, housing, local media, and heath care industries.
BEFORE SHE MOVED HOME TO SOUTH TEXAS, NATALIA CONTRERAS kept two sticky notes tacked to the bathroom mirror of her rental apartment in Austin. Written in her own neat script in thick black marker, the three-by-three squares drew her attention every time she washed her hands or applied her makeup. “You have more power than you realize!” announced a fluorescent green note. Just below and to the right, a neon pink one carried a more specific message: “News organizations need people like you!”
As a kid, Natalia didn’t dream of being a journalist, but looking back, she can see how it happened. She’s thrilled to talk to new people for as long as they’ll let her, the type of person who answers a question with a twenty-minute story peppered with expletives and colorful descriptions. She’s endlessly curious about the world, about why everything from America’s voting system to her favorite local Mexican restaurant works the way it does. With long straight black hair parted to the side, a Cindy Crawford– esque birthmark just beneath her mouth, and perfect eye makeup, she exudes glamour, but her wide smile makes her easy to talk to.
Natalia was born in 1989 in Tampico, a midsize city three hundred miles from the U.S. in the Mexican state of Tamaulipas. Her parents divorced before she was out of diapers, and she never had any siblings. As far back as she can remember, it was always just her and her mom, Luz, at home. Luz was a teacher, and to make ends meet, she worked multiple shifts: she would drop Natalia off at private school early in the morning, then continue on to her first job of the day. In the afternoon, Luz would teach at a second school, while Natalia would take a school van to her grandparents’ house and stay there during her mom’s afternoon and evening classes.
Every day, Natalia’s grandfather read the afternoon newspaper as soon as it was delivered, and both grandparents watched the news on TV. Natalia wasn’t especially interested in the coverage; it was always something “terrible, terrible, terrible,” she remembered. Her cousins, who lived nearby, sometimes came over to play, but mostly she was on her own for hours, watching cartoons in the bedroom or talking to her friends on the phone until her mom picked her up at 8 or 9 p.m.
Natalia didn’t like school much — she thinks in part because she had undiagnosed attention-deficit hyperactivity disorder. She realized later that she actually liked reading, but her school didn’t assign novels, just boring textbooks. And she constantly got in trouble in class for talking. In elementary school, she remembered, a teacher said, “Natalia, I never see your face; I only see the back of your head.” “And it was true!” Natalia said, laughing.
Saturday brought time with her mom. Natalia and Luz would pick a restaurant for breakfast. On the way, they would stop at a newsstand, where Luz— ever the teacher— would instruct Natalia to pick out something, anything, to read. As they ate, Luz would read the newspaper while Natalia flipped through a magazine about beauty or celebrity gossip. Then they’d go hang out at the beach or see a Julia Roberts romcom dubbed into Spanish. When possible, they’d sneak into a second movie afterward; for years, Natalia had only seen the last scene of Bridget Jones’s Diary, the one where Renée Zellweger sprints through the snow in her tiger-print underwear to find Colin Firth, then makes out with him in the street.
When Natalia was in middle school, her life flipped upside down. Through a friend, her mom met a man from Corpus Christi, a Gulf town in Texas. Within a few months Luz was making plans to move with Natalia to the U.S., a country Natalia had never even visited. She was in seventh grade, with a close-knit group of friends and crushes on boys. Moving 450 miles away, to a country whose primary language she didn’t speak, felt unfathomable. But she was excited too. Her wealthier cousins had passports, and they frequently crossed the border to shop, go to Six Flags, and eat at Mr Gatti’s— a place Natalia describes as “like Chuck E. Cheese, but better.” She figured her school would look just like the one in Saved by the Bell, a show she loved. Plus, Selena was her favorite singer, and Corpus Christi was Selena’s hometown.
When Natalia arrived in Texas at the beginning of eighth grade, her mom and new stepdad wanted her to go to Baker, a highly regarded middle school that also happened to be just down the street from their house. But Baker offered no resources for students who didn’t speak English, and the counselor pointed out, correctly, that Natalia didn’t. The counselor suggested she go to Martin, which was all the way across town, in a building that seemed dark and scary. She and Luz said no, she’d pick up English on her own as a Baker student.
School had never come easily to Natalia, even in her first language, but her new English teacher, Ms. Guerra, refused to let her skate by. One day, the teacher kept her after school to rework an assignment. They sat side by side in the library, the teacher explaining the work over and over until Natalia understood. Ms. Guerra also always made sure to tell people “Natalia is bilingual,” never “she doesn’t speak English.” That made Natalia feel special, like speaking another language was a superpower instead of a disability.
There were a lot of Latino students at Baker, but Natalia learned the hard way that few of them spoke anything close to fluent Spanish. She’d try to talk to them and they’d look at her blankly; they’d try to talk to her and she’d do the same. But she was an extrovert, so she had no choice but to figure it out. One day, a girl asked to borrow Natalia’s pencil. That taught her how to ask to borrow something, and it gave her an opening to befriend the girl. Another girl never seemed to say anything, which struck Natalia as strange because she literally always had something to say. She decided to find out why. It turned out the girl was just shy, but Natalia’s investigation made them friends too. “At the time, all I could do was observe and try to figure out what was going on,” Natalia said. She didn’t realize it at the time, but later, it seemed obvious: she was teaching herself how to be a journalist.
Natalia realized as an adult that there was another reason she was destined for a life as a reporter: before she was born, both her parents had been journalists. They met in the newsroom of a newspaper called El Heraldo— Luz was a reporter for the society pages, Natalia’s dad a cartoonist and illustrator. There were three newspapers in Tampico at the time, but El Heraldo was the most important, a progressive trailblazer with a storied history of advocating for workers and peasants and providing much of the best coverage of the Mexican Revolution.
In July 1981, eight years before Natalia was born, El Heraldo’s staff went on strike, demanding better wages and benefits. Low pay was a chronic problem for newspaper reporters in Mexico, and the journalists’ union believed El Heraldo was making plenty of money that it should be sharing with its reporters, so they occupied the building, blocking its owners from entering. The owners refused to negotiate, and the workers were locked out of their jobs permanently. The newspaper never published again. So Luz became a teacher.
Back in Mexico, when Luz would drive by the abandoned, graffiti-covered El Heraldo building, she would tell her daughter stories about the strike. Natalia took note of a key detail: years later, long after Luz had left journalism behind, a judge ruled that the newspaper’s owners owed every member of the union back pay. Luz won a decently sized payout. Natalia never forgot that story.
NATALIA HAD ALWAYS ENJOYED DRAWING and painting, so she thought she might try to become an artist like her biological father. During her senior year in high school, she joined the yearbook staff and developed an interest in photography. But she also discovered that she loved interviewing members of student clubs; after years of getting in trouble in school for talking instead of doing her work, she almost couldn’t believe that now teachers wanted her to go ask her classmates questions.
After graduation, Natalia enrolled at Del Mar, the local community college in Corpus Christi. She knew she needed to sign up for intro English and math classes to be able to transfer to a four-year school, but she wasn’t prepared when the registrar asked her what kind of degree she wanted to earn. She said she liked art and photography, but Luz, who had accompanied her to the appointment, pointed out that she also loved to write. The registrar offered a suggestion: “There’s a newspaper here if you want to do that.” Suddenly, that idea seemed perfect. She was directed to the journalism department, where she signed up for the intro-level class in news writing as well as the staff of the student newspaper, the Foghorn News.
Both the class and the newspaper were overseen by a professor named Robert Muilenburg, who taught Natalia how to report and how to structure a news article. But he also preached a more fundamental lesson: being a journalist, Muilenburg explained, is not just about talking to people, but about closely following current events. Natalia had never picked up on her family’s habit of reading and watching the news every day, but now she wanted to know everything that was happening in the world. “If I didn’t know it, I was like, ‘Fuck, I feel stupid that I don’t know.’ ” That’s how she started reading the Corpus Christi Caller-Times. That’s how she started to think, for the first time, about a career as a reporter.
IN 2008, THE YEAR NATALIA started at Del Mar, there was plenty of news to follow. The world was mired in the second year of the worst economic crisis since the Great Depression. Congress passed the historic bank bailout during her first semester. A month later, Barack Obama was elected president.
The newspaper industry was also in the midst of upheaval. Advertising revenue plummeted during the recession, nearly 30 percent across the industry in the first quarter of 2009. That led to layoffs in newsrooms across the country. In 2009, the Baltimore Sun laid off 61 employees, nearly a third of its newsroom; the parent company of Time, Fortune, and Sports Illustrated cut around 540, a year after cutting around 600. The Los Angeles Times laid off 300 and folded its state news section. In a single week in June 2008, roughly 900 people at nine newspapers were informed their jobs would disappear. Even the vaunted New York Times announced it would “trim” 100 jobs in 2008 and another 100 in 2009. Swaths of journalists a few years older than Natalia, the ones just starting their media careers, were driven out of the industry for good.
But the Great Recession didn’t create newspapers’ financial crisis. Media industry leaders had done that to themselves.
Long before the internet glimmered to life, even medium-sized towns were home to as many as half a dozen newspapers. Each charged as little as possible so they could boast they had the most readers— even if the low price of those subscriptions didn’t cover the cost of getting the paper to people. The real money came from advertisers, and advertisers liked lots of subscribers.
Many economists and other experts, including those affiliated with the United Nations, consider journalism a “public good.” In technical terms, that means it is both “nonexcludable” and “nonrivalrous”: many people can access it at once, and consumers don’t need to pay in order to benefit from it. In other words, news spreads. Even if you don’t pay for the New York Times, for example, information from its biggest stories will be aggregated and reprinted in numerous free outlets, and discussed in coffee shops and around the dinner table, not kept secret from everyone who fails to subscribe.
Because public goods are expected to serve the public interest, they are often funded by taxes. In the United States and many other democracies that guarantee an independent press, journalism is a striking exception. While public television and radio are partially taxpayer-funded, the vast majority of American publications and broadcast outlets are owned by for-profit companies. Media is almost singular among public goods for how it must grapple with competing notions of value: worth to the community versus worth to profit-minded executives.
That anomaly has always made journalists vulnerable to owners looking to maximize shareholder value. But for most of U.S. history, their goals were more or less aligned. As Warren Buffett, who once owned more than two dozen newspapers, put it, they were the “ultimate bulletproof franchise”: everybody read their local newspaper in part because it had ads for every local business, and it had every ad because everybody read it. For much of the 20th Century, running a profitable newspaper barely required any strategy, Buffett said— the perfect place to stash an “idiot nephew” in need of a cushy job.
In the early 1900s, there were newspapers for every type of person: morning versus evening delivery, conservative versus liberal editorial pages, sensationalist versus straight-down-the-middle sensibilities, stories and ads targeting factory workers versus bankers and lawyers. In the first decade of her journalism career, Natalia would work at three papers— the Caller-Times, the Indianapolis Star, and the Austin American-Statesman— all of which once had competition in their hometowns. By 1999, when the evening Indianapolis News stopped publishing, none of them did. That made those three newsrooms typical. By the start of the 21st century, just 1.4 percent of U.S. cities had multiple local newspapers.
That shift proved lucrative for newspaper owners in the short term. Suddenly each surviving newsroom had sole control over its market. Between 1975 and 1990, ad rates jumped 253 percent, nearly twice as much as inflation. As recently as the early 2000s, this rapid growth created fears that newspapers could grow too powerful. When the Denver Post and Rocky Mountain News agreed to centralize their printing and commercial operations in 2001—while continuing to operate separate newsrooms, preserving Denver’s status as the rare two-newspaper town for another eight years — then– attorney general Janet Reno had to approve an exemption to antimonopoly regulations.
Looking back, the idea that two newspapers sharing a printing press could violate antitrust laws is laughably quaint. The following decade showed that the concept of a newspaper holding a monopoly was a castle in the sky. In rapid succession, Craigslist took over the classified ads market; print advertising revenue fell off a cliff; readers became accustomed to getting journalism free online and stopped paying for print subscriptions; local TV news stations expanded their web coverage to go head-to-head with daily papers; Google and Facebook gained control over outlets’ readership and local ad markets; owners began cutting back on true local news in favor of cheaper syndicated coverage; and the advent of ad-targeting technology undercut the prices publications could charge. The vast majority of American newspapers might have been the only one in their respective towns, but they didn’t hold monopolies either as news purveyors or places to buy ads.
Traditional journalism business models were becoming difficult to sustain, in large part because executives were unable to catch up to, or keep up with, the changing world. Publishers failed to anticipate the downturn in the ad market, failed to adapt to the rise of the internet, failed to protect themselves against social media devouring their market, failed to develop a strategy for online subscriptions. They failed to take advantage of their status as one of the few types of court-endorsed monopolies. Long before Natalia dreamed of a career in journalism— long before she was born— newspaper executives’ blind spots were creating the conditions that would usher private equity firms through the doors.
BY THE TIME SHE BEGAN reporting stories for the Foghorn News in late 2008, Natalia knew the media industry was in trouble. Her professors talked about the financial challenges newspapers were experiencing, and the dwindling number of jobs. But Natalia had discovered she loved reporting more than anything she had ever done, and she couldn’t imagine doing anything else. She wasn’t going to be talked out of a career in journalism.
She was also committed to improving her skills, no matter how much hard work it took. Muilenburg, the newspaper advisor, was legendarily tough on his student journalists. He rarely doled out compliments, only criticism. But she thrived on the feedback: “He didn’t just say ‘this is terrible,’ ” she remembered later, “always ‘this is terrible, because . . .’ ” She would write down what he said, resolving to do better next time. She never forgot what happened when she filed one of her first stories, for which she had taken her own photos. “Did you get their names?” Muilenburg asked of the people in the picture. Sheepishly, she admitted she didn’t. “We’re not going to be able to use it now!” he told her. “Next time get everyone’s names!” She never made that mistake again.
By her second semester on campus, Natalia was promoted to managing editor, which came with a small stipend. That spring, the staff went to the annual conference of the Texas Community College Journalism Association, which would crown one student its Journalist of the Year. The title was prestigious in its own right, but more importantly, it came with a guaranteed summer internship. Natalia was nominated for the award in the spring of 2009. She desperately wanted that spot in a professional newsroom.
A girl from Amarillo, in the extreme north of the state, won the title. But something surprising happened: the judges had been impressed by Natalia, so impressed that they awarded her an internship too. The summer after her first year at Del Mar, Natalia went to work for the Corpus Christi Caller-Times, her hometown paper.
She knew the pressure was on. She had one more year of community college, during which she would have to apply to four-year schools. So when she got to the newsroom, she resolved to outwork everyone. “I was always fucking on time. If they told me, ‘Go here, go there, do this,’ I was like, ‘Yes, yes, yes.’ ” She wrote breaking news, obituaries, crime stories, event previews, profiles of local residents. When she filed a bad draft, she memorized what the editor told her about how to make it better, and she fixed it the next time.
One day, Natalia was assigned to cover a Bob Dylan concert, for an article and for the paper’s fledgling social media presence. Just tweet what songs he’s playing, an editor instructed. The problem was, she had barely heard of Bob Dylan — even a decade and a half later, telling the story, she struggled to come up with his name — and didn’t know a single one of his songs. So she found a guy in the crowd, clearly a Dylan superfan, and stood next to him all night. Every time a new song started, he told her what it was, and she would put it on the paper’s Twitter account from her BlackBerry Pearl. “It was very much an intern moment, but I did the assignment,” she said, laughing. She loved working at a real newspaper.
In 2009, the Caller-Times still had more than a hundred people on staff between writers, editors, designers, copy editors, and photographers. There was a features department, a bustling sports desk, even a couple of reporters covering local real estate. The paper was owned by the E.W. Scripps Company, which had bought it and four other midsize papers from a San Antonio– based firm in 1997. Scripps wasn’t a big player in newspapers; in 2004, before the worst of the industry’s challenges began, it only served about 1.5 million readers, spread among 22 newsrooms. But it was a highly profitable company. In 2004, its profit margin was 35 percent, compared to 20 percent at the New York Times and around 10 percent at the typical Fortune 500 company. By 2008, the year before Natalia arrived at the Caller-Times, revenue had plummeted at Scripps (and every other newspaper chain), but the company’s profit margin was still a healthy 14 percent.
To many people, 14 percent profits in an industry trying to adapt to seismic change would be a cause for celebration. But to the corporations that owned an ever-growing number of American newspapers, the acolytes of the Milton Friedman gospel, 14 percent was a crisis. Just as Natalia was starting her journalism career, the executives who controlled the industry were working to reinvent how daily newspapers operated — at the expense of an almost unfathomable number of journalists.
DURING HER SECOND YEAR AT Del Mar, Natalia was accepted to the journalism program at the University of Texas at Arlington to complete her bachelor’s degree. The school was just outside of Dallas, more than six hours from Corpus Christi. It would be her first time living away from home.
As soon as she got to campus, she applied to join the staff of the Shorthorn, the university’s award-winning daily student newspaper. The staff of major college dailies skew toward the obsessive and cultish, boasting about pulling all-nighters in the newsroom and treating coverage of picayune scandals as if they’re the Pentagon Papers. Budding student journalists tend to react one of two ways: either they dive headfirst into the depths of the mania, never emerging until graduation day, or they feel totally alienated and quit as soon as they can.
Natalia joined the Shorthorn thinking she was the first kind of person. She quickly realized she had been wrong. The Foghorn News had been a weekly publication; even when she was managing editor, journalism didn’t dominate her entire existence, and hanging out in the newsroom involved as much shooting the shit as actually putting the paper together. At UTA, though, working full-time — or more— on the paper was the norm. “I was living my life for the first time, and these people were acting like they worked at the Washington Post,” she said. “It was like, ‘Come on, y’all, this is not even real life.’ ” Suddenly, the girl who had been known at Del Mar as the most reliable person in the newsroom was blowing deadlines and half- assing stories. During her first semester, she still wrote more articles than anyone else on staff, earning the title “Byline Champ,” but she disappeared after winter break.
She had never been a disciplined student, but back in Corpus Christi, her mom had kept her on track, enforcing curfews and minimum GPAs. Now she was living on her own, drinking heavily, and thrilled by her newfound freedom. She started partying regularly and going to class seldomly. Some mornings, she and her boyfriend would wake up and go immediately to Applebee’s, the only bar they knew of that opened that early. By the time she and the guy broke up at the end of her first year, she was failing so many classes she knew there was no chance of returning to school the next year.
When her mom found out that Natalia wasn’t going to earn a degree, she was furious. Luz told her she had better get a job, because she sure wasn’t going to get any help with living expenses anymore. Natalia, who had come home when the semester ended, yelled at her, calling her overbearing. She wasn’t going to stay in Corpus Christi after that, so she threw all her stuff in her car and drove back to Arlington. She didn’t have a plan for what she would do when she got there. She didn’t even say goodbye. The memory still made her weep more than a decade later. She knew her mom was right. “I fucked up school. I felt really dumb,” she said.
Natalia found an immigration law firm in Dallas that was looking for a bilingual administrative assistant, which allowed her to pay $300 a month in rent for an apartment she shared with a former classmate. Her old editors from the Caller-Times were still kicking her freelance work, mostly writing event previews for the entertainment section. But she worried that with no college degree and few recent clips, she would never be able to get a full-time job in journalism.
Natalia moved back home to Corpus Christi, back into her childhood bedroom. Now 25, she picked up some shifts filing papers for a local oil company and got an interview for a full-time job at a regional office for Subway. She thought her mom would be happy. Instead, Luz was baffled. “You can do better!” she told her daughter. “Why aren’t you calling the Caller-Times?”
That question transformed the course of Natalia’s life. It had been five years since her internship; she had no idea whether the editors would even remember her. But she called. A former editor told her the paper needed someone to fill in for the news clerk while she was on leave; the temporary job was hers if she wanted it. She typed up the events calendar and obituaries and took reader calls — which “suuuuuuuuucked,” she said; someone was always mad about something. But she was back in the newsroom, which was all she had wanted.
In the five years she had been gone, the Caller-Times had cut its staff by half. Revenue across E.W. Scripps’s newspapers was dropping, in large part because of the declining ad market. (Employment and classified ads, the two sectors most imperiled by the ubiquity of the internet, declined 17.5 percent and 11.3 percent at Scripps newspapers in the second quarter of 2013 alone.) The conventional wisdom was that newspapers might not survive the digital age, but were persevering in their heroic quest to tell the truth. The fact that many journalists couldn’t survive on the wages they were paid — the median entry- level salary for graduates of undergraduate journalism programs was $32,000 in 2013 — wasn’t their employers’ fault, they were told, but rather the inevitable outcome of choosing such a mission-based career path. We’re all in this together, newspaper owners routinely told their workers. We’re doing the best we can.
The truth was more complicated: those newspaper owners were making out just fine; only the workers were suffering. Overall revenue from Scripps’s fourteen newspapers did drop about 3.5 percent in 2014, the year Natalia returned to the Caller-Times, but profit remained steady: $28 million, the same as in 2013 and 7 percent higher than in 2012. It wasn’t the 30 percent profit margins of a decade earlier, but it hardly indicated a mortally wounded industry either. In Scripps’s 2013 annual report to the Securities and Exchange Commission (SEC), filed three months before Natalia went to work for the company, executives made clear how they were growing profits in the newspaper division: “During the past five years, we have reduced our workforce from 4,100 employees to approximately 2,300.”
For Scripps, though, $28 million in profits wasn’t nearly enough. The company’s fourteen television stations were making almost four times as much profit, and dumping the newspaper assets would allow Scripps to acquire new stations without worrying about federal regulations that prohibit one corporation from controlling multiple major outlets in a given region. So, in the summer of 2014, Scripps announced it would merge with a company called Journal Communications, the publisher of Milwaukee’s daily newspaper, then spin the newspapers off into their own company so as not to weigh down the strong TV division. In a press release, the company’s CEO said the move would create an “industry-leading” local television company and a “financially flexible” newspaper company. When it came down to it, Scripps was first and foremost a corporation focused on shareholder value.
Industry observers viewed the Scripps– Journal Communications spinoff as a worrisome sign for local journalism. “The persistent financial demands of Wall Street have trumped the informational needs of Main Street,” media critic David Carr wrote. Most newspapers “are being cut loose after all the low-hanging fruit, like valuable digital properties, have been plucked.
“More ominous,” Carr wrote, “most of the print and magazine assets have already been cut to the bone in terms of staffing. Reducing costs has been the only reliable source of profits as overall revenue has declined. Not much is left to trim.”
In the short term, though, the turmoil was the reason Natalia was able to restart her journalism career. The news clerk she was filling in for briefly came back from leave but decided to retire, which meant Natalia got to keep the job. Then the editors needed someone to pick up Sunday reporting shifts because they were so short-staffed, so she volunteered. Then, in the fall of 2014, the paper needed to replace a full-time breaking news reporter.
Natalia got the job. At 25, she had become a real newspaper reporter, just as she had dreamed about.
SIX MONTHS INTO NATALIA’S NEW job, a maneuver many, many levels above her pay grade changed the trajectory of her career.
In April 2015, eight months after E.W. Scripps agreed to merge with Journal Communications, the renamed Journal Media Group officially acquired fourteen local newspapers, including the Caller-Times. The move was part of a trend: “In just over a week, three of the biggest players in American newspapers— Gannett, Tribune Company and E.W. Scripps, companies built on print franchises that expanded into television— dumped those properties like yesterday’s news in a series of spinoffs,” Carr wrote.
The scale of the Gannett Company breakup, which came seven days after the Scripps– Journal Communications deal, was far larger. Like Scripps, Gannett started as a newspaper company: in the early 1900s, Frank Gannett was the co-owner of the Elmira Gazette in Upstate New York. Then he went on a buying spree, acquiring newspapers across the region— and often merging one-time rivals to ensure control over advertising rates in a given town. Time magazine dubbed him “The Great Hyphenator.” Over the second half of the twentieth century, the Gannett Company added a series of TV stations to its portfolio, just as Scripps was doing. By the beginning of the 21st century, TV revenue at both companies was dramatically outperforming the original newspaper business.
When Gannett announced that it would split its print and broadcast divisions, the newspapers kept the Gannett name. The TV company, which had been renamed Tegna Inc., held on to most everything else of any value. Tegna even got the most profitable digital assets: Cars.com and CareerBuilder.com, two of the sites that had risen from the ashes of newspapers’ once-lucrative classified advertising business.
In interviews with reporters the day the deal was announced, Gannett CEO Gracia Martore sought to assure doubters that the newspaper company was set up for success. The new Gannett would assume no debt, which would leave its leaders free to acquire other papers. In a quote that belongs in a corporate buzzwords hall of fame, she told the New York Times that “we can now do smart, accretive acquisitions of community newspapers in an unlevered company where they can create tremendous synergies.” (Despite the use of “we,” Martore was in fact going to run the TV business, leaving Gannett in the hands of a deputy.)
After the deal closed, at the end of June 2015, Gannett didn’t wait very long before executing its first major accretive acquisition to create tremendous synergies. That October, the company announced plans to buy Journal Media Group, the Scripps spinoff that owned the Caller-Times, for $280 million. None of the Journal Media newspapers were particularly lucrative targets on their own, but the deal created a company with newspapers in 106 cities and towns across the U.S. In a press release announcing the purchase, Gannett’s CEO made the larger plan clear: “This transaction is an excellent first step in the industry consolidation strategy we have communicated to our shareholders.”
Consolidation had been Gannett’s goal for decades, as journalist and critic Ben Bagdikian laid out in his seminal 1983 book, The Media Monopoly. Bagdikian identified 23 corporations that together controlled more than 50 percent of the media business (including newspapers, magazines, television, books, and movies). He took a special interest in Gannett, then the largest newspaper chain in the country: “It is neither the best nor the worst. But Gannett Company, Inc. is an outstanding contemporary performer of the ancient rite of creating self-serving myths, of committing acts of greed and exploitation but describing them through its own machinery as heroic epics.”
Gannett executives boasted about how they stayed out of newsrooms, leaving control over each paper’s journalism to its editor. That seems to have been largely true, but the reasons for that philosophy were arguably less noble than the company claimed: seen through another lens, its deliberate oblivion to what its newsrooms were producing looks more like apathy to journalism writ large.
Increasing profits could mean raising ad rates, boosting subscriber numbers, and launching new products, but that was rarely enough in the eyes of media executives. The real key to growth, financially speaking, was cutting staff. Between 1966 and 1980, Bagdikian found— a time when Gannett newspapers were routinely increasing profits by 30, 50, or even 100 percent every quarter— the average newsroom size dropped from 45 to 26, while average circulation remained steady. Unsurprisingly, the pressure to juice profits resulted in decreased journalistic quality: multiple studies in the 1970s and ’80s concluded that chain-owned papers published fewer news stories than independent ones. Many began relying more on syndicated national news to replace the local stories they no longer had enough staff to cover.
Well before private equity was in the local media game, Gannett was creating firms’ playbooks for them: ruthlessly consolidate, centralize as much as possible, boost shareholder value at all costs— even when the cost was the journalism, the company’s ostensible raison d’être. “The highest levels of world finance have become intertwined with the highest levels of mass media ownership,” Bagdikian wrote, describing the state of affairs but also forecasting the next half century of change in the industry, “with the result of tighter control over the systems on which most of the public depends for its news and information.”
By the time Gannett acquired the Caller-Times and its sister Journal Media née Scripps publications, the evolution from locally owned newspapers to investment firms controlling the entire industry was nearly complete.
From Bad Company: Private Equity and the Death of the American Dream by Megan Greenwell. Copyright © 2025 by Megan Greenwell. Reprinted by permission of Dey Street Books, an imprint of HarperCollins Publishers.