Today, Explained - Mile-high mutiny

Episode Date: April 13, 2018

When its corporate owner introduced new budget cuts and layoffs, journalists at The Denver Post decided to fight back. They ran a front-page editorial calling the owners “vulture capitalists”. Chuck Plunkett led the secret revolt, and tells Sean Rameswaram why he picked a fight with the brass. Kate Knibbs of The Ringer then explains why hedge funds and billionaires are bad for local news. Learn more about your ad choices. Visit podcastchoices.com/adchoices

This is fun. It's welcome to the studio. Yeah. This is where it all happens. Cool. So Jenny Sarma, business partner here at the Vox. Yeah. Vox Media.

Yeah. I hear your mom listens to the show. She does. Do you listen to the show too? I do. Okay. Thank you to your entire family for listening to the show. But she's considering buying a brush?

She is. And I think she's already ordered it actually. She went to getquip.com slash explained and ordered a brush. She did. Oh my gosh. Can we call her and ask her about it? actually. She went to getquip.com slash explained and ordered a brush. She did. Oh my gosh. Can we call her and ask her about it? Absolutely. I'd love to.

Great. Lately, when you hear about local newspapers, it's bad news. It's a new hedge fund owner. It's layoffs. It's closing up shop. But this week, someone changed that. My name is Chuck Plunkett. Chuck's the editor of the editorial page at the Denver Post.

It's the biggest paper in Colorado. He's been a loyal employee for 15 years. But last week, he went rogue. Journalists at the Denver Post sounded the alarm with a blistering, stop-the-presses-style editorial that took the paper's owners to task. The front-page editorial came after years of devastating cuts ordered by Alden Global Capital, a New York City hedge fund that stepped in to buy the paper in 2010. In it, the editorial page editors referred to Alden as

And this was a very daring move on the Post's part because they're speaking out against the owner of not only this but 90 other newspapers across the country. Well, I guess without further ado, could you read us some of the editorial you wrote? Sure. At the Denver Post on Monday, more than two dozen reporters, editors, photographers, videographers, page designers, digital producers, and opinion staff will walk out the door. Our marching orders are to cut a full 30 by the start of July. This is a city that has seen more than 100,000 newcomers since Alden took control.

This in a state and region thrumming with energy and enthusiasm for its future. This in a market filled with hyper-educated citizens ready and able to afford great journalism, should it be offered them. We get it that things change. We get it that our feelings are raw and no doubt color our judgment. But we've been quiet too long. How did it feel to publish that? I imagine as a newspaper reader myself, even more magical to hold it in print than to read it online. It felt damn good. It felt like we rang the bell. It was incredibly satisfying. I've had the thought that this must be the most significant thing I've done in my professional life. And it went viral very quickly, unlike anything I've ever seen. Working for a Pulitzer Prize winning newspaper,

why was this the most significant thing? Because it's trying to protect an organization full of talented journalists capable of winning a Pulitzer Prize. Because it's trying to do the work of democracy. Because it's trying to make sure that this town and state that I have come to love and call home and don't want to leave gets the kind of journalism that it ought to have. You cannot have a strong city and state without a strong newspaper. You need that watchdog role. And you need an organization that provides a sense of identity and a sense of place and if i sat by and let that get pissed away just shame on me believe it or not he did not tell the editor-in-chief of the denver post that he was planning on doing this he did not tell the company

that owns this newspaper that he was doing this. He just did it. I did go rogue on this. It sounds like you really love your job, Chuck. I do. I didn't intend to get into journalism, but I've just become deeply in love with what I do and watching what has happened to my profession and to the many talented journalists that I've worked with all these years definitely plays a role in deciding to do a thing like this.

Did that make it all the more nerve wracking to go rogue and write something like this and then publish it? What were the emotions going through you while you prepared this piece? So on March 14th of this year was when the word officially came down that we were going to reduce by 30 positions. There were sobs and some of the strongest outbursts of crying that you would ever expect at a professional meeting. It was shocking. I had one of those moments where things just become surreal and you don't even feel like you're corporally attached. And I thought, man, if someone made a movie about the Denver Post, this would be the scene where you knew it was going to die. And that's when I started thinking about doing something. And then I thought, oh, no, we better keep our heads down. We better not poke this hornet's nest. I mean, it's just going to get more bloody. And Alden Global Capital is a hedge fund located in New York City. And they're the majority owner of Digital First Media. Digital First Media found out, it's trying to take it offline, pulling it off the presses, firing me and those kinds of things.

But they kept it up. They kept me. They let it go to press. And here we are. Chuck, the Denver Post has surely changed a fair amount in like, what, like 125 years of making the newspaper. But I imagine there have been some drastic changes since you joined. I joined the Denver Post in 2003. That was when the Kobe Bryant scandal was breaking in Colorado. And it was one of my first big stories to cover. And, you know, there were 250, 300 folks working back in those days. So I have seen it decline since then. And this latest round of cuts takes us down well below the 100 where we were only last week. Right. So these cuts from the hedge fund, Alden Global Capital, why are they making them?

Where are they coming from? What's the paper's financial situation? It's a great question. It's one of the reasons that we wanted to write the editorial is that heretofore, our readers didn't know what was going on. They need to know that Alden Capital is making 20% profit margins on the Denver Post and others of its papers. That sounds good for them. Yeah, that does sound good. There are whole industries that spend all kinds of money and imagination and power and resources to make margins far smaller than that. And everyone gets paid and gets bonuses, right?

Right. 20% is a healthy margin. They use this narrative that we're going out of business to justify selling increasingly expensive subscriptions for paper that gets smaller, has less content, and has less quality local reporting. And the readers need to know why that's happening. It's not because we've gotten lazy in the newsroom. It's not because we're not minding the store. We're killing ourselves in the newsroom and everywhere else in the paper, trying to match where we used to be, trying to punch well above our weight now, because we're so embarrassed by our diminishment. Readers need to know that. And they also need to know that the biggest minority investor in digital first media recently

filed a lawsuit in which they claim that Alden has taken hundreds of millions of dollars of its newspaper profits and pumped it into shaky side investments that have nothing to do with the business of gathering news. They need to know that. What is a hedge fund? What is Alden Capital? They're headquartered in New York at the top of the Lipstick Building. They are private equity investors that look for distressed properties that they can go in and try to revitalize to improve the product in such a way that they can make profits. But ideally, you would also care about the product. And I think that's the disconnect. We're not seeing business decisions that are being made that value what it is they operate and try to honor the mission and what have you. And if that's what Alden decides to do now that we've called attention to it, that would be great. That would be a perfect solution.

It's interesting. The party line on print seems to be that it's getting harder to sell ads, all ad sales are moving to the internet, you know, it's getting harder to sell ads. All ad sales are moving to the internet and newspapers are suffering and going under as a result. And you're telling me that the Denver Post has a 20% profit margin. Where is that money coming from? It's coming from print. It's coming from ad sales and print, just to be clear? It's coming from the ad sales, the circulation in the ad sales. There are still a lot of people that like newspapers.

And as long as the quality is there, they're willing to spend money on them. And is the Denver Post situation similar to other papers across the country that are going through the same struggles? Because obviously, you guys aren't the only ones in this situation. Yeah, I do hope that when people read this editorial, they don't think that I'm only focused on the Denver Post. Way up high in our editorial, we say, rethink your business strategy across your entire media holdings. Alden owns upwards nearly 100 papers across the country. And many of them are suffering as bad or worse than we are. The Bay Area News Group, those them are suffering as bad or worse than we are. Look at the Bay Area News Group. Those papers are suffering terribly.

Several of these newsrooms have gone through staff reductions, but none of these papers so far have quite done what the Denver Post has, publicly calling out their owners and begging to be sold. That's why I think this thing took off the way that it did. It wasn't just because people all over the country and world care so much about the Denver Post. That's not it at all. It's because they see it in their own hometown paper and they see it in their own state paper. And they've been watching it for years and they're, you know, they're mad as hell about it. And so when a paper stands up and says, this is why this is happening, they get it. Chuck Plunkett is an editor at the Denver Post.

We reached out to the paper's hedge fund owners, but they did not reach back. This week, a group of Coloradans got together to try and buy the Denver Post. So far, they say they've raised about $10 million for the effort. Chuck didn't get fired for going rogue, and he may have started a trend. That's coming up after the break. Hello? Hi, is this Suzy? Yes, it is. Hi, Suzy.

This is Sean Ramos from Today Explained. How are you? Hi, Sean. How are you? Great. I'm here with Jenny. Hi, Mom. Hi, Jen.

Hi, Sean. How are you? Great. I'm here with Jenny. Hi, Mom. Hi, Jen. Hi, sweetie. She told me that you maybe went to getquip.com slash explained and bought a toothbrush. I sure did. You got me. Got another one. I'm excited to get it. Tell me a bit about what made you want to buy the brush. Well, they're very attractive, so that was appealing. But your guest who described gunk on the toothbrush is really what put me over the edge. Are we not supposed to say gunk?

Debris, detritus, I don't know what you would call it. Gunk was actually a good word. I had a hard time making a decision about the color. But I finally came down with gold. And it's going to come with free brush refills, it said, because you went to getquip.com slash explain. So I get some free stuff. I get some free refills. Now, I know these things start at $25. I'm guessing the gold is not the baseline price.

Is that fair? That's fair. I upgraded myself to the metal ones. It just, I'm a grown lady. I can invest in a good toothbrush. Treat yourself. This is Today Explained. I'm Sean Ramos for them.

I think this particular incident was wonderfully ballsy. I applaud them so much. Kate Nibbs writes about the media and the technology for The Ringer. But as frustration continues to grow, I think we'll start seeing more rebellions like this in the future. Is the Denver Post incident sort of like the West Virginia teacher strike of daily journalism? There have certainly been a lot of internal complaints about how hedge funds are managing newspapers and how corporate owners are handling newspapers,

but nothing like a gesture this grand is rare. Right, right. Tronc comes to mind in all of this. Tronc stands for Tribune Online Content, and it also means pooling of resources. It's about meeting in the middle, having a tech startup culture meet a legacy corporate culture and then evolving and changing. And that's really the fun part. That's exciting. They just sold the LA Times to some billionaire after the LA Times

unionized. Tronk still owns the Chicago Tribune, which is about to unionize. Why are newspapers that have been around forever unionizing all of a sudden? Well, there's immense consolidation going on right now in the industry. So what that means is local newspapers around the country are being bought up by a handful of corporate owners, often hedge, that don't actually have a strong interest in keeping the papers healthy. They're basically just buying them and selling them for parts, laying off huge numbers of staff members and then letting them die in the vine. It's really upsetting. I read a stat that was very disturbing, which was between 2012 and 2016, according to the Bureau of Labor Statistics, all newspapers in America lost 24% of their workforce. Wow. Yeah. It's a trend that

seems like it's probably going to continue. This year, several California newspapers owned by Digital First Media. Isn't that who owns the Denver Post too? Yes. So they're owned by Alden Global Capital. They are going to gut the staffs of several California newspapers like the OC Register and the Mercury News in the future. So this is not something that's going to stop anytime soon. Is the argument being made by these hedge funds that there's just a lot of fat in these newsrooms or something, that there's a lot of room to trim? That's the argument being made, but I don't think it's being made in good faith. They weren't investing in them so that they could have these wonderful, healthy newspapers. They were just sort of taking on these properties to sell them for parts.

It is their business model to let these newspapers wither. On that note, according to the Pew Research Center, 126 daily papers shut down between 2004 and 2014. Those aren't all because of hedge funds, right? I don't know if those were all connected to the hedge funds because there's a few things going on with the decline of local journalism. Like the rise of Craigslist and online classified sort of decimated the traditional advertising business model. And that played a big role. And then, of course, the rise of Facebook and Google meant that clickbait, opinion pieces, rants were getting more eyeballs on them than traditional hard newspapers. So there's like a few different forces at play threatening the welfare of newspapers in general.

So you mentioned that Craigslist and Facebook and Google have decimated all sorts of online news coverage. How do we see this happening outside of just like your standard local daily newspaper? It's really had a negative impact on alt-weeklies around the country. They've had an atrocious few years. There's been sort of a simmering revolt happening on Twitter with LA Weekly, which gutted its staff and installed sort of what the old writers call a zombie staff, reliant on aggregating news from elsewhere. They're not doing original journalism anymore.

The Baltimore City paper completely shut down. The Houston Press closed its print version and downsized. Basically, all around the country, any beloved alt-weekly you can think of has probably had a terrible year. And they really relied heavily on classified advertisements. So they were hit very hard by Craigslist and basically lost their main revenue stream because they were always free. They didn't have subscribers. Right. And a lot of these alt-weeklies had really strong traditions of original investigative reporting. We're also seeing that, you know, with just digital first properties. I used to work for what was formerly known as Gawker Media, which was bought

by Univision, and they're facing very steep staff cuts. The news business is not necessarily where you go to have gigantic profit margins. So owners need to have a sense of seeing these properties as producers of good. They need to have some sort of emotional investment. They can't just be doing it for money because this is not where you get rich. It's interesting you mentioned Gawker. Is that to say that what you're seeing happening locally with daily newspapers and all weeklies isn't just limited to what we'd consider, I don't know, like legacy media that it's happening online too? It's definitely happening online too. We're seeing cuts across the board. A lot of the new media properties last year had

this frantic pivot to video trying to sort of appease the Facebook algorithm gods. And when it didn't work, they ended up cutting a lot of the video staff and basically trying to revert back to what they were doing before. That sounds familiar. Yeah, it's a sickness that infects like all of media. It's not just traditional newspapers. And while this is happening, I guess it sounds like online, locally, in alt-weeklies, you also have, of course, Sinclair Media manipulating local news, right? Because Sinclair and its digital news subsidiary Circa not only produce and send packages to their stations, they even write scripts that local anchors can use to introduce the pieces. Anchors at Sinclair stations all over the country introduce a story about Michael Flynn like this. Did the FBI have a personal vendetta

in pursuing the Russia investigation of President Trump's former national security advisor, Michael Flynn? Did the FBI have a personal vendetta in pursuing the Russia investigation of President Trump's former national security advisor, Michael Flynn? It's a little bit different from the hedge funds in that it's not trying to suck the local news outlets dry that it owns.

It seems like it doesn't want its news outlets to operate in the service of truth, but in the service of propaganda. And it's incredibly disturbing. What kinds of stories are we missing when we don't have hyper-local coverage? A story that is pretty emblematic of what local reporting can do is the story of the Storm Lake Times. It's a tiny family-run paper in Storm Lake, Iowa for a town of 11,000 people. It's basically run by one man and his family. His community had been facing really high levels of river pollution from local farms. Some of these farms had connections to really powerful agricultural interests like Monsanto.

And they secretly funded the local government's defense of lawsuits for the pollution. And this tiny newspaper basically broke the story wide open. He ended up winning a Pulitzer Prize in 2017. And if he wasn't there, if he just didn't have that drive to report, we wouldn't have had that story. Is this just like people go to McDonald's instead of going to the grocery store and buying some vegetables and eating a salad? Do people just not support the things

that are good for them? Is it because a person would rather just go on Facebook and read a bunch of clickbait instead of reading a really long form piece of investigative journalism about their community? And if that's the case, should we just let people dig that hole? No, we have to fight it. We can't just give in to only looking at cat videos.

I love cat videos, but I also love long form investigative journalism. And people do want to be informed about their communities. Especially since we've had a particularly turbulent year for news, people have been realizing more than ever the need to know what's going on and to have a trustworthy source, taking their time, reporting things out. Kate Nibbs writes for The Ringer. I'm Sean Ramos-Firm. This is Today Explained.

Am I going to be on Today Explained? Maybe. No. So what's your name? Lake Vanderplug. What's your middle name, though? Carl. So? Lake Vanderplug. What's your middle name, though? Carl. So Lake Carl Vanderplug. Yeah. File today explained. At today underscore explained.

Anything else you'd like to say today? Explained. What did you... You were like, is there anything else that I want to say today? And I was like, explain. I said, explain. That was a good one. That was a good one.

I'm so glad we got to do this and talk about going to getquip.com, explain the whole experience. And actually, I'm so glad we got to do this and talk about going to getquip.com, explain the whole experience. And actually, I'm so glad that we met many, many Sundays ago at the National Portrait Gallery just by chance. And I met your mom. That's right. She is very nice. I got to get her a Quip electric toothbrush one of these days. And you can splurge and get the nice one.

A gold one. For my mom, nothing but the best. That's right. Is there anything you want to say to your daughter while we have her here in the studio? Hi, Jenny. Have a great weekend. I miss you. Get to work. Love you, mom. Okay. I love you. Thanks, Susie. Sean, I just know you, so I can't, but it's nice to talk to you. That's fine. That's fine. We'll get there.