Q&A with Margot Susca on private investment in journalism

Dr. Margot Susca is an assistant professor at American University’s School of Communication. Using critical theory guided by watchdog reporting techniques, Susca researches media ownership and its impacts on democracy.

CISLM intern Twumasi Duah-Mensah interviewed Susca via Zoom. This interview has been edited for length and clarity.

Center for Innovation and Sustainability in Local Media: What’s a recent research project you’ve done that has helped us understand the challenges facing local news?

Margot Susca: I have a book, (Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy), that just was released (in January 2024). That book is meant to be a recent history of the role private equity firms and hedge funds have played in the destruction of the local news market. It was very important for me to understand the role that these firms played, because without that understanding of what happened when we transitioned to the internet, I think that we’re potentially going to miss solutions. Specifically, (from 2003 to 2008) was a key time that I think had been overlooked, where a lot of research just said the loss of advertising revenue to sites like Craigslist, eBay and monster.com meant the destruction of newspapers.

I mean, Craigslist was basically just some <a> tags. You needed a rudimentary knowledge of HTML (to create Craigslist). It was shockingly simple, right? So when I went back, started looking through FCC documents and annual reports of publicly traded companies and started doing interviews, it was clear that private equity investors, rather than to choose digital innovation, put pressure on these newspaper chains to merge and acquire. And that was a devastating strategy.

That was the first step private equity played. And then there were other steps along the way. So private equity, as an investor, puts pressure (on newspapers) to make bad decisions. Then there (were) different private equity and hedge funds that traded the debt of distressed newspaper companies. And now we see hedge funds as owners. Throughout the 20-year period, they played different roles in the private equity divisions of major banks.

So the book traces these different types of firms, but all along the way, none of them seem to care that the newspapers were going to lose and citizens were going to lose from any of these decisions that they made.

CISLM: What should non-academics — local journalists or civically engaged community members — learn from that research?

MS: I don’t think that (regular people) have an understanding that local news is in crisis. I think they blame journalists, if they even know a journalist anymore. It’s been so long since really local journalists have been in communities. Journalists (and) editors, if we could be in communities doing this work, we would be — in great numbers. But in many ways, it’s (this) Wall Street investor class that has stopped that kind of work in many communities from being as thorough as it could be.

I was a local news reporter. I covered education in St. Lucie County, Florida, just a little bit north of West Palm Beach, Florida. I worked for Scripps Howard. I was one of three education reporters in our coverage area. I left for a doctoral program in 2007.

12 years later, that newspaper had had two different owners —and it was now owned by Gannett — and one of my students who I mentored took my old education job. Gannett is heavily influenced by private equity. It’s a publicly traded chain, but it was effectively owned by GateHouse (Media), which was long run by Fortress Investment Group. So this former student of mine, who had a master’s degree from American University’s journalism program (and) had done investigative work — when she took the job more than 10 years after I had left, she was the only (education reporter). So from three reporters to one.

When I was there, three reporters. (Now), down to one reporter. It’s just not possible. You can be the greatest reporter. It’s just not sustainable to have one person do the work of three people. These layoffs and these cuts, they affect the type of coverage that people in those communities get. People pay for local news to read about their children’s school to read (if there) are qualified teachers. Can they speak Spanish in a district (in St. Lucie County) that’s largely in a community with children coming in and out (of school)? Are there enough teachers? Is school safety an issue? That generates coverage. So if you’re not getting that coverage, you’re going to cancel your subscription.

For me, that is the core issue with (private equity) investment. When profit is put first, one of the first things that happens is layoffs or they don’t fill positions. And you’re left with a community that is then underserved by the journalism that you’re still telling people “oh, well, we cover education.” I mean, do you really?

CISLM: What’s a recent research project in local news that you admire?

MS: (“How Loud Does the Watchdog Bark? A Reconsideration of Losing Local Journalism, News Nonprofits, and Political Corruption” by Nikki Usher and Sanghoom Kim-Leffingwell) was really a very important look at watchdog reporting in places where there’s a failing commercial (market). What this study is saying is that a nonprofit newsroom that pops up in its place is keeping public officials accountable. The measurements that (Usher and Kim-Leffingwell) use, I thought, were really interesting. They used (Department of Justice) data. The way they operationalized corruption (as) federal prosecutions for public corruption — I thought that was really smart. I think as scholars, we’re gonna have to really think about how (we are) measuring any of these things.

CISLM: Why does local news research matter?

MS: Local news research matters because, as a democratic society, we need research that’s going to address how to reinvent and rebuild a local journalism system that can help bridge some of these gaps of polarization. How can we help citizens feel more engaged in voting in a local, state, regional system?

The U.S. newspaper chain system, for many years, left a lot of marginalized communities out of its work because they weren’t the communities that advertisers wanted. So I’m not nostalgic for some great heyday of US newspapers. I’m nostalgic for that being the best system we had.

Moving ahead, we need local news research because I hope that we can build something that’s even stronger and even better.

CISLM: What excites you about the future of local news?

MS: I’m really excited about my students and their excitement for this reinvention and rebuilding. There is a sense, I think, from primarily my Gen Z students, that they’re skeptical of these private equity firms. They understand the way climate has been affected (and how) rent is increased because of these private equity firms in a lot of (industries) around the country. I think they understand “these are not the firms that we want in control of our news, so how can we work to build a system?”
There’s a strong sense from this generation that I teach that democracy — real democracy like real storytelling, real journalism that matters for everyone — is having its moment.

But we need citizens to understand the crisis that we’re in and to be a part of the solutions. And that’s what I’m seeing is a lot of news organizations that are reaching out to communities. Rather than (be) like, “we’re here, you find us” it’s like, “we’re going to reach out to you.” That’s also something I’m excited about.

CISLM: What helps you get through a long day of work?

MS: Other than coffee? My day usually starts at 5:30 a.m. And usually, I do take a break in the evening for yoga, and then (I’ll) finish after that. I used to just push through, push through, push through, and you need to take a little bit of time for yourself. Burnout is real for journalists. Burnout is real for scholars. I’m no good to my friends, my family, my colleagues if I’m a mess.

I make time for (yoga) every day, an hour. I’m very lucky I get to walk two blocks to my favorite studio. I’m taking a spring training trip in March. I’m gonna go see some spring training and see some close friends. You gotta take some breaks, because you can’t work like this nonstop.

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