Factually! with Adam Conover - How Capitalism Murdered Journalism with Margot Susca

Episode Date: May 29, 2024

We’ve been discussing the slow death of journalism for a long time, but what if it didn’t just “die”? This week, Adam speaks with Margot Susca, a professor at American University and author of Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy, about how private equity firms have dismantled journalism and betrayed America. Find Margot's book at at factuallypod.com/booksSUPPORT THE SHOW ON PATREON: https://www.patreon.com/adamconoverSEE ADAM ON TOUR: https://www.adamconover.net/tourdates/SUBSCRIBE to and RATE Factually! on:» Apple Podcasts: https://podcasts.apple.com/us/podcast/factually-with-adam-conover/id1463460577» Spotify: https://open.spotify.com/show/0fK8WJw4ffMc2NWydBlDyJAbout Headgum: Headgum is an LA & NY-based podcast network creating premium podcasts with the funniest, most engaging voices in comedy to achieve one goal: Making our audience and ourselves laugh. Listen to our shows at https://www.headgum.com.» SUBSCRIBE to Headgum: https://www.youtube.com/c/HeadGum?sub_confirmation=1» FOLLOW us on Twitter: http://twitter.com/headgum» FOLLOW us on Instagram: https://instagram.com/headgum/» FOLLOW us on TikTok: https://www.tiktok.com/@headgum» Advertise on Factually! via Gumball.fmSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This is a HeadGum Podcast. Hello and welcome to Factually, I'm Adam Conover. Thank you so much for joining me on the show again. You know, there's a story we tell ourselves about the death of journalism in America. It goes like this. Local newspapers benefited from a multi-decade monopoly over information. They made banks selling classified ads and ads in the funny pages in the sports section, and then they used all that money to support accountability journalism in the public interest.

You know, investigating the Krupp City Council member who was given the local baseball stadium a tax break in exchange for a lifetime of free hot dogs or whatever the fuck. But then, a quarter century ago, comes Craigslist and the internet, and that classified ad business model is shot to shit. Big tech wins, newspapers lose, the revenue dries up, papers don't react quickly enough, and so they die. It's sad, yes, but oh, it's sort of their own fault because that's what happens when new technology rolls through, right?

Well, wrong. That is not the full story. The decline of local news is not just the natural result of increased competition. But as our guest today makes clear, it is the result of deliberate predation by bad actors who are trying to kill the newspaper industry. Over the last few decades, private equity firms

have bought up papers across the country, and they looked at newspapers not as local institutions with important roles to play in the health of democracy, but as bags of hot, wet loot, which they could squeeze every last cent out of. And they have. The percentage of newspapers owned by private equity

rose from 5% in 2001 to 23% in 2019. In just the last 20 years, we have lost one third of all newspapers in this country and two thirds of all newspaper journalists. Imagine that, two thirds less journalists than we had just 20 years ago. Imagine all the stories that you've never heard because of what these private equity assholes did.

So, how did this particularly noxious form of capitalism accomplish such destruction? Well, on the show today, we're going to tell you all about it. But before we get to it, I just want to remind you that if you want to support this show and all the stories we bring you week after week, you can do so on Patreon. Head to patreon.com slash Adam Conover. Five bucks a month gets you every one of these episodes ad free.

You can join our online community. We would love to have you. And of course, if you want wanna come see me do standup comedy on the road near you, head to adamconover.net for tickets and tour dates. And now let's get to this week's episode. My guest today has written an incredible book on how the ultra wealthy institutions of private equity have dismantled journalism and betrayed America

for their own gain. Margot Suska is a professor of journalism at American University and a former journalist herself, and she is the author of Hedged, How Private Investment Funds Help Destroy American Newspapers and Undermine Democracy. Please enjoy this interview with Margo Suska. I know it's gonna make you very angry. Margo, thank you so much for being on the show today.

Thanks for having me. So we've been talking a lot on the show today. Thanks for having me. So we've been talking a lot on this show about the decline, maybe near death of journalism. And this trend is often portrayed as being something that happened because of technology. Oh, you know, Craigslist came in, the newspapers couldn't keep up, et cetera.

You make the argument in your new book that that's not necessarily the case and that journalism was perhaps maliciously murdered, that it was something that was that it was done to the industry by bad actors. Who are they and what exactly happened? Yeah. So I think that the Internet for too long has taken the blame as the boogeyman that's affected U.S. newspapers. And I, in this book, was really interested in looking at, uh, really completing the picture and looking at what was happening in

the Wall Street boardrooms in the early and mid-2000s before the 2008 Great Recession. And so really the real villains of my book are the private equity funds that were owners and investors in major newspaper chains, later held the debt after a series of major mergers and acquisitions, and now are among the largest owners, hedge fund owners of US newspaper chains. So I was really interested in looking at the corporate decision-making and following the money over a 20-year period to examine what was really happening behind closed doors.

What is a private equity fund for those who don't know? So private equity funds and hedge funds are types of what are known as institutional investors. And the best way that I can describe it is I came across one description from a business writer when I was doing research for the book who described hedge funds as upmarket prostitutes. And that was really one of, I think,

the more glowing descriptions of hedge funds and private equity. So these are, I mean, that's actually a pretty nice compliment, depending on your opinion of sex workers, which I do not have a negative one. So I'm like, all right, that could be a compliment. Yeah, right. Well, exactly. I guess that it depends on what, you know, what, what your viewpoint is.

But I think that, you know, one of the better ways maybe to describe hedge funds and private equity firms are they're a very lightly regulated type of firm, Wall Street firm. And after the destruction caused by the Great Depression when the federal government said, hey, we'd better create new rules to try to avoid this kind of destruction from happening, there were all sorts of new policies that were created, something called the Investment Company Act of 1940. The problem is that that never created definitions of what these private investment funds are.

That now today, those funds use that lack of definition to be able to skirt really any type of financial regulation. Really there are almost no guardrails up on what these types of funds will do. Now we're talking about some of the wealthiest funds in the world. I mean, they manage assets anywhere between 55, you know, 55 billion to up to $10 trillion in assets under management. I mean, you're talking about, so we're not talking about just wealth influencing the newspaper market.

We're talking about extreme top fraction of top 1% firms that have had a hand in the destruction of the US newspaper market. Remembering that the US newspaper market is constitutionally designed, you know, to protect average citizens in a democracy. Yeah. So why would these companies, these hedge funds, why would they want to destroy the newspaper industry? I mean, if they have an investment in the industry, surely they would

want that industry to grow and prosper, not to lay workers off, shut down as so many newspapers like my home paper in Los Angeles has done in recent years. Yeah. So I think that's a really excellent question. So I think that what hedge funds tend to get into markets with a very short-term strategy, oftentimes looking with a window of between three to five years to get out. Although we've seen some hedge funds now in the newspaper market that have been there for as long as a decade, which is kind of a very surprising amount of time. But there is something that you have to remember about the newspaper market.

When some of these private equity firms got into the market, newspaper stocks were making 20 to 30% returns. That's beating S&P 500 averages. I mean, flabbering what other stocks were making. So at the time, newspaper stocks were very, very good investments. Now today, obviously the stock prices are much, much lower, but there's other money to be made and there other money to be made, and there's money to be made in financing the debt. There's money to be made in selling off the assets, and there still is money to be made. Even in that shell of its former self,

whether that's the LA Times or my hometown paper, the Hartford Current, people are still buying advertising. As weak and small as those newspapers might be, there is still some money left in them, but that money has basically the strategy of these firms is to liquidate assets, is to basically just extract anything that's left. And what will be left is virtually nothing. This reminds me of the death of Toys R Us a little bit, because I believe that was also private equity that killed Toys R Us. And that's the strategy of, hey, there was a business here,

but it's not as big as we'd like it to be. So let's just strip it for parts. Let's sell the light fixtures. Let's sell the shelving units. Is that basically what it is? Yeah, well, I think, you I think that is a very good example, but I think something to remember and something that I do in the book, it's very important to me is,

if you're a real Housewives fan, is to have the receipts, right? Is to look at all the financial documents, right? So what I did was I spent more than a year looking at just US Securities and Exchange Commission documents. So there are private equity firms and hedge funds that are making lots of money off of what's left of the newspaper market.

It's just been buried in documents that quite frankly, no one has taken the time to really dig through. Quite frankly, no one has taken the time to really dig through. And as an example, their fortress investment group, which is a New York city, a wall street, New York city, uh, private equity fund was for years, the, the owner, and then the majority shareholder of the gate house newspaper chain, which is now good net America's largest chain, which is now Gannett, America's largest newspaper chain. Fortress Investment Group in the year that Gatehouse declared bankruptcy in 2013, Fortress paid itself $149 million dividend. That's a huge amount of money. So what you're saying is, you know, selling off the light fixtures and selling off the assets. Absolutely. That's a strategy. But there's also a strategy to

just extract money every single year. They then declare bankruptcy. They reorganize six weeks later into a new holding company and they start doing it right over again. Wow. holding company and they start doing it right over again. You know, so it's in there all along the way, paying themselves millions of dollars in what's called incentive fees or management fees, all of it laid out in publicly available U.S. Securities and Exchange Commission documents. Now all of it also completely legal, right?

But you've got to wonder what happened in that 10 year period? What happened in terms of innovation? What happened in terms of audience development? I'll give them credit. I'll give them credit if there was something that happened the way I read USA Today or the way I read a newspaper changed dramatically. Take the money. That's great. You've transformed journalism, but all you've done is taken that money and driven those newspapers deeper and deeper and deeper into a hole. It's a shame, it's a shame, but it's also totally legal.

I see, so in addition to the strategy of stripping them for parts, even if they're not doing that, well, they're just extracting money out of the newspaper while letting it atrophy or shrink or, you know, at the very least not keep up with the times, as opposed to, you know, there are a couple examples, if you look at the New York Times, which has plenty of problems as an organization,

but it is the newspaper that has done the best job of modernizing, of becoming a modern media brand, creating a digital product that is sustainable and is a successful business. Well, hey, more papers could have done that, except that they were being owned by these private equity companies that just were extracting money out of them rather than growing them into healthy media products

that could continue to report on the cities in which they're based. Yeah, that's exactly right. And in this key period, right before the Great Recession, in this key period, you know, and you mentioned it, you know, as Craigslist was becoming more important with consumers, as Monster.com and eBay was becoming more important with consumers, what newspapers

who were beholden to these private equity investors who had major sway over the boardrooms of newspapers in the 2000s, what those newspapers did was they chose mergers and acquisitions as their business strategy. So rather than digital innovation, which would have cost money, it would have, you would have needed resources. What they said was, well, let's put our resources into just getting bigger. And then the great recession comes, the advertising market drops off and you've got newspaper companies that were as much as a billion dollars in debt.

So it was kind of a one-two punch. But again, it was extremely important to be able to document that history. Cause you'll never be able to move forward in the future and figuring out how to fix what we all agree is in crisis. What we all agree is broken if we can't really look at what these root causes are of journalism's crisis. Yeah. Well, let's just talk for a second though about the other big cause because you mentioned

Craigslist and eBay and Monster.com and we haven't said explicitly what we're talking about there, which is the death of the newspaper classified section where people would say, I'm selling a house, I'm looking for a new receptionist, I have a yard sale, all those sorts of things. And a big part of the success of newspapers, the reason they had those 30% stock gains, as you said, was because for decades,

they had informational monopolies in their area that they were providing. You had to have a subscription to the newspaper because if you didn't, you wouldn't know about the job openings, the house sales, you wouldn't even know about the yard sales in your neighborhood. And that actually did change. That was a really big, not just technological change, but media change. And so when you are thinking about that seismic change, how much credit do you give that versus the bad actions

of these private equity funds and hedge funds? How do they interact? Was it just a matter of the private equity funds, you know, not being equipped to make the change that was needed or what? I think it's an absolutely fair question. And what I hear and what gets treated as conventional wisdom is only

that the business model changed. That's what gets told. And no one discusses really that we as, and I still consider myself a we as in newspapers, even though it's been a year since I've been a local newspaper reporter, had a monopoly on local newspaper advertising. And really Craigslist and Monster.com, if you're old enough to remember those early sites,

they weren't that sophisticated. Newspapers with a little bit of digital innovation. And you know, a kid who has taken an HTML class at the local community college could have replicated what Craig Newmark did. So I do- Right, Craigslist was the simplest website ever designed. It still is, which is one of the wonderful things about it.

That they've never changed it that much, honestly, in the past decades, which is wonderful. But it was really just, hey, here's an HTML form, we'll put it on the page. And it was free, they came up with a couple of small ways to make some revenue. But yeah, there's no reason that the local paper couldn't have done the same thing,

especially because they had all that early brand equity. That, you know, every, I grew up on Long Island, everybody read Newsday. And then as soon as Newsday had a website, everybody went to newsday.com. It was like a pillar of the community. And if they had just been like, hey, here's our classified section.

It's free and da da da da da, we're competing with Craigslist. They could have done it and yet they did not. Yeah, that's, and that's what really, I think when you lay it out and when you look at, and a lot of the bankruptcy court documents show this, and Tribune, I think, is the most egregious example of this. When Sam Zell, former private equity billionaire,

took over Tribune in 2007, and he had people coming to him saying, "'We need to embrace the digital future that lies ahead.'" He had executives writing him memos that said, anybody who says we should invest in digital, get rid of them. Our business is in print and we need to... Wow. It was really, I mean, it's egregious when you look at the whole scope of what these

documents say from company to company to company. So I think it is important to talk about that digital transition. It's important to talk about audience tastes and the loss of advertising revenue is key for newspapers. But what didn't happen was it wasn't as if the internet got plugged in. And then all of a sudden newspapers were like, you know, oh shit, we don't have any product. I mean, we knew it was coming. And then it arrived. And then we acted as if we had, you know, no strategy, we gave up. And that's what the documents show. And we gave up because these wealthy institutional investors said no to any

of the company executives demands to innovate. And it's a sad reality. And now we're living in that reality, which is what we have today, which is a crisis. Yeah, and that has happened to so many industries that short-term Wall Street hedge fund thinking of let's juice the profits this year, let's extract money, put it in our own pockets, or maybe slightly better, put it in shareholder pockets, if that does ever happen.

That's devastated so many industries, including my own industry, the entertainment industry. We've seen the CEOs enrich themselves at the expense of the industry itself, creating an industry that is less profitable for everyone and only benefits a few. However, the difference between what I do and journalism is journalism is actually important. That journalism actually provides something that we really need as a

society, not just, you know, something to eat popcorn and enjoy on a Friday night, as important as that is to us. So tell me a little bit about what has happened to the newspaper or the news industry more broadly over the past couple of decades as a result of the actions of private equity and hedge funds. Well, I think, you know, and everyone is glad to have comedy because if we have ever needed comedy more, it's right now, certainly.

But I mean, I think your point is well taken. And I think that one of the most important examples is just the absolute destruction we've seen with the amount of reporters. There has been such a huge loss of journalists nationwide in terms of layoffs of reporters. And what that means to try to put it into context for your listeners is when I left local journalism in 2007, I was one of three education reporters covering an area roughly the size of Rhode Island.

When I had a former student who I mentored who took an education job at that newspaper, which is now owned by Gannett. She was the only education reporter there. So from three down to one. And what that means is you have one reporter. Now again, she's a masterful journalist who's, you know, since gone on to bigger and better things, but you have one reporter covering a minority majority school district with, you know, plagued by achievement problems, trying to get to, you know, everyone's issues, not just investigative issues, but future stories too, because communities

deserve to know the positive things that are happening in their areas as well. And that becomes much harder to do. But good accountability reporting is takes time, it takes people and it takes money and that just can't get done. So you have a loss of investigations, a loss of accountability, and a loss of good, strong feature writing. And that is a loss for communities. They deserve a mix of positive news, good news to know about their teachers and their schools.

But at the same time, they should know if their school board member is taking money from the construction company that's going to get the high school building contract. That's the kind of work that local journalists do. And that's the kind of work that these hedge funds and private equity-owned newsrooms have absolutely demolished. Folks, if you've listened to Factually before, or I don't know, listened to the first half of this episode, then you know how crucial it is to find and support quality journalism. And that is why I am honored and delighted to say that this episode of the show is sponsored

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know that we still have an amazing 50 cents per week offer just for our podcast listeners. That's washingtonpost.com slash factually. Shout out to Clareton for supporting this episode and for providing us with samples. You know, my ability to conduct interviews on this show pretty much depends on me being able to have smooth conversations with guests. But let me tell you, if you're plagued by seasonal allergies as I often am, you know

the struggle of trying to maintain your cool while you're gunning for the world record in consecutive sneezes and your nose is running like your life depends on it. Luckily for those of us who live with the symptoms of allergies, we can live Claritin Clear with Claritin D. This double action combination of prescription strength allergy medicine and the best decongestant available relieves sneezing, a runny nose, itchy and watery eyes, an itchy nose and throat, and sinus congestion and pressure with ease. So when allergy symptoms stand in the way of me bringing you another episode of Factually, I look for relief with Claritin D. And in as little as 30 minutes, I'm refreshed, I'm renewed, and I am no longer desperately scrounging for tissues like some kind of old-timey tissue

prospector. So, if you are ready to live life as if you don't have allergies, it is time to live Claritin Clear. Fast and powerful relief is just a quick trip away. Find Claritin D at the pharmacy counter. You just ask for it. They'll bring it right to you. I think that sometimes, you know, because when we go online, there are still a lot of news stories to click on that we sometimes think that, hey, news is doing fine, right? Because there's still a lot of shit I can click. Except that, you know, maybe you're reading the same press release style article that's being blasted out in multiple places, or you're reading, you know, the same AP wire article, you know, on multiple, uh, multiple sites. Uh, what you don't see is all of the stories that you are not seeing.

You don't see all of the things that you don't know about your community because no one is reporting on them. Like, I think sometimes people think that journalists are the ones who type the article or something like that. No, they're the ones who find the thing out. They're the ones who, they're the only reason you know the thing happened in the first place. And so if we have less journalists,

we simply know less about the world that we live in. We know less about the, like you say, superintendent who's getting bribed or the fishy thing that happened. I mean, look, I know people in LA city politics. I have friends who work in city hall. And so I hear about things happening. And then I go look in the LA Times.

I'm like, there's no coverage of this. And there was more coverage of it a year ago back before the layoffs that happened at that paper. There has been less coverage of literal events happening inside of the building because there's less journalists. And so, I don't know, it's the same as if you laid off, you know, 80% of the scientists in the world. We just know less about the world now

because we have less journalists. Do you agree with that? I absolutely agree with that. And then somebody would say, well, I found, you know, someone's opinion on the X speed and that seems good. That seems good enough. And then look at what we have, right? Which is a, you know, misinformation and disinformation.

Now that's run rampant. And that is a major concern of mine, which is what happens in the void when that you lose that local news. And when people don't have that connection to their community, where do they go? And certainly what we've seen from research is that turning to social media is a real cause for concern. And I know in doing interviews in Miami with all of the cutbacks at the Miami Herald and El Nuevo Herald, which is owned by a hedge fund,

a New Jersey based hedge fund, Spanish speaking readers are turning away from that newspaper. It's no shock. And where they're going is WhatsApp and AM radio in South Florida, which are two places that are, you know, just rife with misinformation and disinformation. So that is extremely troubling, you know, to see that. And your point is well taken, there's all sorts of stuff. You know, there's, you know, it's like saying there's all sorts of weeds out there when

you're really, you know, trying to find a garden. You know, good news reporting is difficult. It's hard work. And I can tell you when I was a local news reporter, the types of stories that I uncovered of, you know, some of which might need a trigger warning, but, you know, corruption stories, people, you know, taking money from the city, you know, this one city, small town in Connecticut that I covered, you needed a $10,000.

If anything costs more than $10,000, it had to go out to bid. And I found, you know, a series of payments to the board of finance chairperson for nine thousand nine hundred ninety nine dollars, pages and pages of checks that had been written to him as if the same as if the town government was his personal piggy bank. And, you know, that story was good. You know, that to me was the reason I was a local journalist. That's accountability reporting at its finest. It didn't win any... You're not going to find my name next to a Pulitzer, but for the people in that town, it was a really important story about accountability and what was

happening to their tax dollars at a time this town, Ellington, Connecticut didn't even have a website. So, you know, that's what good reporters do and that's what's getting lost. And, you know, I think when it, to come back to your initial question, I think there's a financial reason these private equity firms and hedge funds

are involved in the newspaper market. But more and more, what concerns me is that there are business ties in other industries, for-profit hospitals, for-profit nursing homes, for-profit child care, means that having a newspaper system that's been hamstrung means that they're able to operate without scrutiny in towns and cities all over the United States. And that is a troubling, troubling reality because who will be left to be a watchdog when they continue their expansion?

Well, I was gonna ask you about that because it struck me that the very people who run private equity companies or hedge funds are the type of people who might not like journalists snooping around, right? They're the type of people who maybe like to pay off a city council member or like to, might engage in a little bit of like corruption

or even let's say less knowingly might construct a capitalist system that is hurting the average person. They certainly are not allied on a class level with the average people who need good quality reporting. So I was gonna ask if that was part of why they might want to shut down a local paper or cut the teeth out of a local paper.

You're making an even stronger connection though that these are the same people who, for instance, the owner of your local paper might be involved with your local for-profit hospital chain that might be giving poor quality service to people in your neighborhood and might not want that reported on. Is that what you're saying?

It could be that direct. It might be that direct. And so I can tell you an example from the book is that Fortress Investment Group, again, is this New York City-based private equity firm, and it's co-owned or co-founded by Wes Edens, who also owns an NBA team. So you're talking about wealth that's something that you and I are probably never going to see.

And so Fortress Investment Group, Wes Ed Eden's pet project in Florida and in other places, I think California as well, is rail. And in Florida, he has operated under a couple of different names. But, you know, and I've been to Japan, I've been to Europe, I think, you know, a better functioning rail system is certainly something that I would celebrate, but I don't want the guy who owns a majority of newspapers in Florida also trying to get, you know, work with politicians to skirt environmental rules and to skirt public safety rules, getting those rail deals through.

And there were a couple of lawsuits that had been filed in counties on the Atlantic coast of Florida before this Brightline project was passed through when he also owned, when Gatehouse newspaper chain also owned the newspaper, it owned the newspapers and it owned the rail. So these lawsuits, you've got to be concerned about, you know, there were public safety issues, there were environmental issues. So again, it's like, I don't want those two in cahoots. I don't want, you know, New York Times had a story in December about private equity backed hospitals having higher mortality rates. Well, what if, you know, they get bought by a private equity firm,

that reporting is gonna be gone. So, I think there is a concern in a lot of communities about what kinds of investment there's gonna be in news at a time when these companies are growing, they control something like $230 billion of, of market share. I mean, it's, it's an astounding amount of wealth, an astounding amount of wealth that these companies control and it's, you know, I, it's really troubling. I want to ask you said earlier, you were talking about the regulations put in

place after the great depression that were, to stop certain kinds of malfeasance, but the definitions were loose and these companies took advantage of that. Is the sort of behavior of these private equity funds and hedge funds, is it something that you feel should be illegal or should be regulated? Is this a loophole that we should be plugging somewhere? And on what basis? So I make the argument in the book that there essentially were members of the U S Senate. There were certainly the FCC, the U S Supreme court sided with the

FCC when it said that there shouldn't be, that there should be newspaper and television, ownership restrictions should be loosened. So around every turn, the highest echelons of the American government knew about these firms. The US Department of Labor, which I foiled to get access to its documents about another hedge fund called Alden Global Capital, knew it was using its employees' pension funds to line its offshore accounts. And all these firms ever did was get larger and larger and larger without any restriction.

So now today we have three of the most important newspaper chains in America owned by two different hedge funds. So I make the argument that we don't need, you know, we don't need new because I'm always asked do we need a new law or a new, you know, restriction? And I think your question is a good one. I argue that there could be guardrails put up under existing Justice Department rules that limit these kind of interlocking directorates. And what some have argued as what's called something called an indirect interlocking

directorates. You have a very small number of firms. What that means for people who might have cut econ to smoke grass and maybe play frisbee. What that means is essentially you have a very small number of firms that over the last 20 to 25 years have been very clubby in the newspaper market. And really, it essentially comes down to, you know, six or seven firms that are continuously appearing. And I make the argument in the book that the Justice Department, a smart Justice Department lawyer, could make the argument that there's an existing rule under something called the Clayton Act that could be used to stop their expansion. And if you're not going to do it with the FCC, and if you're not going to, you know, the Supreme Court isn't going to do it. And if, you And if the Department of Labor doesn't care about these

offshore accounts that are getting used, then let's have somebody for something that's on the books. Because what we have now are these firms that have just run amok and just continue to get larger and larger. Even if they thought they were going to lose, gosh, try to make a case and show. I want to scream, not to make it political, but scream at the Biden administration. Read the room. My students are seeing this wealth run amok. They're seeing their rents go up. They're seeing their parents struggle. And I think that, you know, they would respond to, I think an administration that tries to limit their,

you know, their expansion, certainly their expansion over the news industry. Well, and we are living in a time when you are starting to hear government officials talk about issues like this a little bit more. If you look at, you know, the FTC and the justice department are finally starting to do some antitrust enforcement.

It's a big ship to turn. I, but I have heard, you know, FTC, Carolina con say the words private equity once or twice, um, including on this show. So, uh, you know, we maybe are starting to see the beginning of a sea change happening there, but it also strikes me that part of the problem is that these private equity companies are invisible to the public in many ways, right? I mean, they are, you say Alden Global Capital,

I've heard that name from folks like you, but I don't see it ever on the side of a building. You know what I mean? I know that I, I know I hate Google or whatever company I'm mad at this week, but these are companies that are so far behind, they are so powerful and yet they are so far behind the scenes that, you know, even when you're describing it to me right now

in such vivid terms, it can sound a little abstract, right? You're like, oh, trillions of dollars. You're describing one of the most powerful forces in the economy. And yet it's hard for me as a member of the lay public who doesn't read the Wall Street Journal or Bloomberg to really get my hands around what the fuck it actually is and therefore to call for change. Do you see that as an issue? Yeah, I absolutely do. And I think that's part of

what I, I would like to believe that my role is, which is, you know, um, I remember as a kid, the first time I ever heard about the stock market crash in 1929, I remember, and this was a little bit morbid, but hearing people were jumping out of windows. And I remember thinking to myself, like, that sounds awful. What a terrible thing. Wow. Being ultra rich doesn't really sound great. Okay. But listen, my dad was a teamster. He drove a beer truck. My mom was a secretary. I went to state school.

And if I can do anything, which is to try to bring this subject to a more lay audience and to try to help people understand, to try to bring the scholarship out of kind of the ivory tower, that's what I would like to do. And I like to think that folks like you who are paying attention to it are bringing this a wider audience, which is to say, maybe you've never heard of Alden Global Capital,

maybe you've never heard of Fortress Investment Group, but I think that what you can understand is that you don't want your mom to have to go into a nursing home that's run by a company that is only concerned with profit. And I think it's time that people start paying attention to these types of issues and I think that there's been I think a small swell. Of attention and I think you're right we're starting to talk about this and I won't take full credit for that by any means but. You know people are starting to discuss it they're starting to talk about this. And I won't take full credit for that by any means. But, you know, people are starting to discuss it, they're starting to talk about it. And

they're starting to see, you know, people who make $125 million a year are named as Time Magazine's person of the year. But what have they really done for me? And there's been investigative journalism that's shown that those same people are named as culprits in the housing market crash of 2008. So I think we have to realize that a lot of the business journalism that we have

has been far from critical of these kinds of institutions and has really treated them almost like Olympians of capitalism, rather than how their capitalism has screwed over working class people. I've been talking to a lot of young journalists about how to read through some of the documents that I used for the book, how to use them in their own reporting reporting and how to do accountability journalism and business as opposed to holding up these people as the kind of beacons of what people should be in business journalism. And I think that they're starting to be a bit of a groundswell because, listen, good journalism, whether you're covering politics, business, education, is

meant to hold power accountable. And we have failed to do that in business journalism. We have failed to do that. And these companies, make no mistake, are businesses, you know, of the greatest magnitude that that American capitalism has ever seen. You know, folks, I try to be pretty healthy. I hit the gym, I walk everywhere, I try to get fresh air and vitamin D whenever I can. But living a healthy lifestyle doesn't end the moment

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with BetterHelp. Visit BetterHelp.com slash Factually today to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Factually. You know, something that I talked about in my conversation with Matt Pierce a month or so ago, which if folks are interested in this topic, please go check it out. But actually, maybe this was in my conversation with Dave Weigel as well. We talked about how one of the few healthy parts of journalism is business journalism, because business people need like accurate relevant information quickly.

And so outlets like Bloomberg and the Wall Street Journal and others are very, very healthy because there is like this demand for the information by people who are rich enough to spend a couple of hundred bucks a year on it. But the odd thing about those outlets, and I enjoy reading them. I actually read Bloomberg every day

because the journalism is good and it's engaging. What it isn't so often is as investigative as you might see other places. It is not quite holding power to account in the way that a ProPublica piece might, for example, because it is aimed at a business audience and et cetera. It's one of the sad things that one of the most robust sectors of journalism is not doing the job that we really need journalism to do, which is to like, find the assholes, right? That's what I want journalism to do. Tell me who's a piece of shit and why I should be mad.

That's right. As the founder of the investigative reporting workshop where Chuck Lewis, legendary investigative journalist used to say, it was investigate the bastards. And there's been some talk of a couple of new business models here in Washington, DC as the future of journalism. And really all they're doing is sending in smart political reporters who are paying monthly

or yearly subscribers to kind of track bills. Now again, is that a business? Yes. Is it journalism? Because to me, I'm thinking to myself, how is that really serving democracy? It's serving a market, but is it serving democracy? And I think we need to be able to think about these things in terms of is it scalable for other kinds of content? And so I think your point is such a good one. And it really is a really important point to make, which is, is it even journalism anymore? Or does it just feel like another kind of public relations?

Yeah, well, you raise a really good point where it's a business, but is it journalism? Right. Or it's good for the market, but is it good for democracy? And that's a great question to ask, because a lot of times, you know, under capitalism, we end up focusing on what makes money rather than what people really need. Unfortunately, we do live under capitalism, right. And under capitalism, things that grow, things that are successful, things that stick around

are the things that make money. And so to me, the question is, all right, how do we find the structure that supports what we need and that there is still a market for, unfortunately? That is the unfortunate position that we're all in. I mean, me, I hate capitalism, and yet I have to figure out a way to make shit that allows me to make a living because I have to pay a mortgage

because that's the world I live in. Right. So I'm wondering, like, are there healthier structures to support journalism that you would propose? I mean, what I'd like to talk about first, just because we haven't gotten into it, is we've been talking about private equity and that sort of ownership of newspapers. One that has gotten a lot of press in recent years is the billionaire model, the patron model of journalism, right? Obviously, the that you're shaking your head already. But

let's just talk about it quickly. You have the Salzburgers who own the The New York Times and have for decades or have for over a century, a longtime family business. You have, you know, Mike Bloomberg starting Bloomberg. You have the billionaire here in LA, Patrick Soon Shong, who bought the LA Times. You have Bezos buying the Washington Post. You know, the idea being, okay, maybe there's a public minded wealthy patron

who wants to have a newspaper as a feather in his cap. And it's always a he. Yeah, that's all right. And can maybe say, well, I don't need to make as much profit every single year because I understand that this is really important. Is that a way to support journalism in your view? I'm guessing no. If so, why?

So I think that, listen, both Jeff Bezos, Jeff Bezos is Washington Post and soon Chang's lost Los Angeles Times have both in the last six months undergone either layoffs or furloughs or excuse me, not furloughs. Either they they've undergone either layoffs or buyouts. So I think that it's important to know this, you know, these kind of altruistic billionaires mean Jeff Bezos is either the first or second wealthiest person in the world. I mean, I would imagine if he even stops to think about the Washington Post, he loses money and yet it doesn't seem to be, you know, working for the Washington Post. He said, what is he building an underground clock or something?

I don't know. Is that him or Zuckerberg? I'm sorry, I can't remember which it is. So, I mean, it's, so here we have two examples and I'm actually in the middle of a study working with a great research assistant where we've been mapping the Washington Post's coverage, metropolitan coverage of marginalized and minoritized communities and it's not great. So here, you know, looking at how democracy is covered

in a city where you would think there's a great news ecosystem, but really not really much to brag about in terms of that. So the reason I mentioned that is I think you're right, this billionaire model was seen after 2013 you know, 2013 or 2014, as it was going to be the savior. Glenn Taylor's ownership of the Minnesota, the Star Tribune in Minnesota has, I think, been a very positive development. But I think that leaving news up to the billionaires, and even my concern about leaving it up to philanthropy is in some ways just

rearranging the wealth chairs on the deck of the Titanic. What I mean by that is once that support wanes, once the philanthropists have moved on to what the next big cause is going to be, if we still haven't figured out what will make journalism sustainable, then I think we've failed because it's just a matter of time before it crumbles. I'm thinking of a Malibu beachside house that's up on Thailand that are just about to fall into the ocean. So then the question is, what works? And I think there's been talk, and I

know you talked about this with Matt, when Matt Pierce, when he was on your show, about certain other models, which is, should we have a government-funded system the way other Western countries do? And I would have disagreed with this five years ago. As a former journalist, I would have screamed independence from government. But I think that what we've seen is that if billionaires can't make it work, if Wall Street isn't willing to make it work,

and if there are concerns about even the nonprofit models, which we're looking so promising, have also had layoffs, and still require philanthropic or community support from folks who may not have it, then we have to look at some type of expansion of the corporation for public broadcasting or PBS or NPR. There are other scholars who are studying that much more closely than I am. But I've spent the last 15 months traveling around the United States, talking to different newsroom founders and talking to citizens in small towns and communities in Louisiana,

Maine, Colorado, Florida, just trying to get a sense of what might work, what might be scalable. And I don't think there really is just one solution. And it's a little bit exciting because what works in Birmingham, Alabama is gonna work there, may not work in Portland, Maine. But it's also a little bit frustrating because I think you're talking about a much more fragmented audience at a time

when it already feels like Americans are very disconnected from communities and very disconnected from their news because of cable and social media. Yeah, I mean, people are so disconnected from their communities that it might be hard to get them to read local news about their community, except that, you know, why are they disconnected? Because they don't have local news.

Right? Because they don't have that. I mean, you know, when I grew up, it was like, oh my God, you got your photo in Newsday. Oh, you were on Local News 12 Long Island. It was a big deal. People watched the, they cared about it. And the death of these outlets has, you know, separated us from each other.

I mean, I guess it strikes me that, I agree that the profit motive is really deleterious here, but I also think nonprofit is not necessarily the way to go because you still end up being beholden to rich people and who are donating. And it seems like rich people are the, every single one of these models, the problem is the rich people are the problem.

The wealthy people in private equity are trying to extract the money. The billionaires like Soon, Shong and Bezos get bored or, you know, they still want to turn a profit, so they don't like it. NPR. What's the problem with NPR? It's that they rely on donations from listeners. So who donates? It's affluent people. So whose issues get represented? It's affluent people, So whose issues get represented?

It's affluent people, which is why you have, you know, NPR stories tend to, you know, play classical music in the background and, you know, cover what's going on at the local farmers market rather than what's happening in the local public school. And, you know, what's the problem with philanthropic funded things? You know, there's some exceptions.

Like I think ProPublica, I think still generally does great work, but you know, what's the problem with philanthropic funded things? You know, there's some exceptions. Like I think ProPublica, I think still generally does great work. But, you know, there, if you're a, if you're a nonprofit, you're constantly trying to raise money from rich people, which means you end up serving their needs. And what we want the paper to do, what we want journalism to do is support the needs of average people. Here's the problem. Average people don't necessarily need that information on a daily basis, right? Like we talked about how folks who read Bloomberg, they need that

reporting, right? Because they are going to buy or sell on that day. But if I'm just an average person in Los Angeles, what goes on corruption at City Hall matters to me, but it doesn't matter to me on a daily basis. It doesn't matter to me where I'm like, I gotta pay five bucks today so I can read that article. It matters to me as a, you know, in terms of the overall material conditions of my life, but it's not like news I can use, right, to use the cliche.

So that to me is like the connection that we need to make is this stuff is vital, but who is it vital to and how do we get them to pay for it? You know, like there's this last step at the end that is somehow missing and I'm curious. I mean, you study this for a living. How can we make that connection? Well, this is where I think my answer is gonna fall short

because I don't have an answer and I wish that I did. And I think that, you know, there has been talk, I don't know, for your listeners who might be, you know, fitness buffs, there's talk of a kind of, like creating a journalism class pass. So this is like instead of belonging to one yoga studio, you might have a class pass, which allows you to, you know, do 10 fitness classes a month at different LA studios or at different Washington DC studios, for example. And there's some talk of, well, couldn't you create something that would allow you to pay something like, I'd get 20 stories a month. And maybe if there's something that happened in your community, maybe it was a big crime

or something I wanted to read about or some trial happening maybe with a former president in New York, maybe I'd want to click on that story, you know, and that you'd have your pick. But my goodness gracious, I mean, Adam, we can't even get news organizations to remember somebody's login information, you know, overnight. So I mean, I think it's like, you know, so I think your point is, is a good one. And I think your question is a good one. There have been other scholars who have looked at different, creating different paths to, you know, creating, um,

different ways of, of using public financing that would allow you to wait different news organizations. I think that becomes too complicated for an audience. Yeah. No one gives a shit. No one wants to sit there going, oh, I want 60% of my dollar to go to the Hartford Current and the other to go to Seattle. No one cares.

No, I think we, listen, I think of my dad, who again, my dad drove a beer truck, my mom was a secretary, my stepmom was an elementary school teacher. And they barely can, if you ask them what I did for a living, they barely know, you know, so it's, you know, it's, you know, trying to communicate with regular folks about the crisis. I think it means we've got to get out and talk to them. We've got to explain the importance of news in communities. But whether or not social media is about to have its reckoning, whether or not we're about to see these changes, what happens in the November election is going

to be extremely important. So there are a lot of vectors that are coming together, I think, you know, Google and whether or not it's going to have to, you know, pay as Facebook and, you know, all these issues, Facebook, Google elections, the real loss, have we even seen the bottom yet for newspapers? And I think that's going to be, you know, maybe the crisis is just the beginning of that's going to be, you know, maybe the crisis is just the beginning of what we've seen. You know, I don't think cable news helps. I don't think social media helps. But I think people will come back around again. I'm hopeful people will come back to journalism again. But I do think there's been quite a lot that's been lost in these last 10 years as it comes to trust. And when you have politicians calling journalists,

First Amendment protected journalists, enemy of the people, that's an American tragedy really. And that's been allowed to fester. Yeah, and I think it's one of those situations where at the end of the day, we have to be looking at journalism as not just a public good, but a public necessity and something that we have to create mechanisms

in our society to support. You know, I do look at, I don't know how long ago, but you know, we used to have FCC regulations about, hey, if you own a television news station, you can't own a newspaper, right? That kind of thing. Because we had a government acknowledgement that an independent news media was important.

It was something that had to be fostered and cultivated. And I hope that at some point, somebody in the government, looks around and says, holy shit, we need to be supporting journalism in this country because if we don't, it's gonna go really south. And I'm hopeful that there are folks but looks around and says, holy shit, we need to be supporting journalism in this country because if we don't, it's gonna go really south. And I'm hopeful that there are folks at some of our government agencies,

at the FCC or whatever, or the FTC taking a look at private equity or whatever it may be, maybe exerting some fucking pressure on this problem because we really desperately need it, I think. Yeah, I mean, I think that you're right, I hope, but you know, there's a part of me that also thinks that really the beginning of the end was Citizens United decision,

which basically said that money, corporate money is free speech. And in many ways, I think that was, you know, you can trace a lot of the problems back to that. And again, it goes back to what we were saying earlier, which I think money, you know, and that much money when you're talking about really is the root of a system that is corrupt, that does have a lot of problems in it. But having an open journalism system, a free journalism system, my heart breaks when I

see the US press freedom rankings drop. We were in the 40s last year, and this year we're ranked, I think, number 55 out of the countries that are trapped. I mean, that is a shocking, shocking statistic. When you talk about openness, when you talk about access to information, when you talk about ability to publish.

And so at the same time that we're talking about regulations and ownership, we're also watching, you know, really the degradation of press freedom. And that is a huge concern that really should trouble anyone who, you know, who has, you know, read a story. And I think to your point about, you know, journalism in society, I think about, you know, and I'm a frequent critic of Gannett and its ownership and its payments to its executives as it lays off reporters, you know, in some years called so bad that they're deemed a bloodbath.

But Gannett is also the corporate owner of the Indianapolis Star newspaper, which is the newspaper that broke the Larry Nassar USA Gymnastics story and essentially reported on his years of abuse and how USA Gymnastics did nothing to get him away from young girls and young women. And to me, that is a story that journalism does not tell. Well, I would have, you know, that billboard all over the United States, like journalism, put this guy behind bars. Journalism kept this guy away from your kid. And, you know, that is the kind of story that somehow is just not getting through.

I mean, we should celebrate those victories. And unfortunately, what we have as a U S you know, a U S newspaper system that's making it harder to get those stories done because it's putting profit before that kind of investigative truth telling. Well, I think that's a wonderful idea. And it reminds me of the fact that so many people actually do give a shit about the news. You know, so many people spent their lives

opening the newspaper every day, watching the evening news. Plenty of people still watch their local news every day and will miss it when it is gone and give a shit about this. And, you know, I think the public desire is there. And I thank you for studying this and for raising this issue to us about how, again, our journalism system wasn't just, doesn't just change, it was killed.

This was done to it by people who didn't have to do it. They did it for their own profit and could have done otherwise. What that means is that we have the choice to create a better system of journalism if we are willing to take it and if we're willing to support journalism in our community. So, Margo, I can't thank you enough for being here. The book is called Hedged, How Private Investment Funds Helped Undermine

Newspapers and Destroy Democracy. You can pick up a copy of it at our special bookshop, factuallypod.com slash books. Where else can people get at Margo and where can they follow your work? You can find it on Amazon and at the University of Illinois Press website. And you can follow me on X,

the site formerly known as Twitter. What's your username there if people wanna go look for it on X? On X. Is Margo Suska, just like full name. M-A-R-G-O-T-S-U-S-C-A. Thank you so much for being here, Margo. And yeah, I can't thank you enough for being on the show. Okay. Thanks, Adam. I really appreciate it. Thank you once again to Margo for coming on the show. Once again, if you want to pick up a copy of her book Hedged, you can do so at factuallypod.com slash books. And just a reminder, when you do so, you will be supporting

not just this show, but your local bookstore as well. If you want to support this show directly, you can do so on Patreon. Head to patreon.com slash Adam Conover. Five bucks a month gets you every episode of the show ad free. For 15 bucks a month, I will read your name at the end of this podcast and put it in the credits of every single one of my video monologues. This week, I wanna thank Andrew M. Purifoy,

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