Slate Money: "Ghosting the News" (July 18, 2020)

Host: Felix Salmon
Co-hosts: Emily Peck (HuffPost), Anna Szymanski (BreakingViews)
Special Guest: Margaret Sullivan (Washington Post, author of Ghosting the News)

Episode Overview

This episode of Slate Money dives deep into the decline of local journalism in America and its ramifications for democracy, civic engagement, and the broader media landscape. With Margaret Sullivan—media columnist at The Washington Post and author of Ghosting the News: Local Journalism and the Crisis of American Democracy—the team explores the economic, social, and political forces that have created "news deserts," leaving swathes of America uninformed about local affairs.

The discussion covers the collapse of the business model of newspapers, hedge fund takeovers, the crucial role of local reporting, the debate over public funding for news, and recent controversies at national outlets. Real-world examples, compelling stories, and frank opinions make this a must-listen for journalism and democracy watchers.

Key Discussion Points & Insights

1. Margaret Sullivan’s Book and the State of Local News

• Book Plug & Premise: Margaret’s new book, Ghosting the News, is a “brief and breezy read” (B, 02:25) about the steep decline in local news and implications for democracy.
  • Quoting Sullivan: “It's about the abrupt…abandonment of the news by traditional media, not because they wanted to, but because the business model disintegrated.” (A, 03:53)
• Target Audience: Pitched toward millennials and younger with the use of “ghosting,” reflecting generational language.

2. Why Local News Matters

• Watchdog Role: Local journalism restrains corruption—public officials behave better when they’re watched.
  • Sullivan: “If they know that somebody is watching...hold this public official accountable and if necessary shame and embarrass him on the website or in our pages. So that's sort of the watchdog role.” (A, 06:04)
• “Village Square” Effect: Provides a common set of facts, features, obituaries, and community connections, creating civic cohesion.
  • “It’s role in kind of being the village square for a community...knit the community together...” (A, 06:28)
• Startling Statistics: From 2004 to 2019, more than 2,000 newspapers in the US closed—a drop from ~9–10,000 to about 7,000. (A, 07:40)
  • “From 2004 to 2019, more than 2,000 newspapers in the United States went out of business, closed their doors.” (A, 07:28)

3. Consequences of News Deserts

• Civic Decline: Voter engagement drops; polarization rises without local news.
  • “People become much less civically engaged. When there's...In a news desert...they vote in a very polarized way.” (A, 08:26)
• Collins Example (Western NY): In rural districts lacking coverage, voters were uninformed about their congressman's indictment—a powerful illustration of the news desert impact. (10:01–13:26)

4. Economic Collapse of Newspapers

• Subscription vs Advertising: Historically, ads made up two-thirds of revenue; readers just one-third. As ads dried up—especially during COVID-19—papers couldn’t survive.
• Clumsy Internet Transition: Newspapers failed to charge for online content early, training audiences to expect free access.
  • “We’ve trained people to think that it should be free...you haven’t been a lot of great decisions.” (A, 15:48)
• Was It Inevitable?:
  • “Some of it was...foisted upon them. You can’t argue with the Internet...classified advertising was a big source of revenue. And then Craigslist came along.” (A, 17:01)
  • But: “There was a smugness...didn't require a whole lot of financial acumen to make money at newspapering for a long time.” (A, 17:43)

5. Hedge Fund “Vultures” and Their Role

• Takeovers: Hedge funds like Chatham and Alden buy up distressed papers, “strip mining” assets for profits, often gutting newsrooms and selling valuable real estate.
  • “They make money by strip mining. A lot of these smaller papers are still profitable at this point.” (A, 18:59)
• Little Hope for Transformation:
  • “If you’re interested in the future of journalism, you will not be cutting the newsroom staff to the bone...it’s got a bit of a fire sale aspect to it.” (A, 20:16)
• Economies of Scale Myth: Consolidation rarely works due to the unique local value of each paper’s reporting. (B, 20:38)

6. Can Billionaires Save Local News?

• Benevolent Owners:
  • Warren Buffett, Jeff Bezos, Patrick Soon-Shiong: Even the “better” billionaire owners rarely subsidize or rescue local news for philanthropic reasons.
  • “Never in the sense of philanthropy...he did not want to subsidize.” (A, 23:32)

7. Media Bias & National Controversies

• NYT Bari Weiss Resignation Drama (26:11):
  • The group dissects the internal politics and media fascination around the NYT compared to, for example, the WSJ, with Sullivan emphasizing the unique scrutiny the Times receives.
    • “Anything that happens at the Times gets elevated into this...insane thing...” (A, 27:21)
    • “If you’re an editor and a columnist at the New York Times...she had a pretty nice way to get her point of view out there.” (A, 29:17)
    • “I don’t think there’s a big problem there...Bari Weiss, I believe, canceled herself.” (A, 29:51)

8. Bankruptcy and the Economics of Local News

• Hedge Funds’ Inside Position:
  • Chatham bought McClatchy cheaply by converting debt to equity during bankruptcy (B, 32:33)
• Pension Problems: Many legacy papers are crippled by unsustainable pension liabilities.
• Little Evidence Chapter 11 Revives News: Bankruptcy rarely helps news orgs reinvent for sustainability. (A, 32:33)

9. Unions and Labor in Journalism

• Role of Unions:
  • Sullivan: Unions have helped protect journalists and fair conditions despite management complaints; they are not the cause of the industry’s financial straits.
    • “They’ve helped keep some of the journalists employed and being treated reasonably well...I don’t think they can be blamed for holding back success, financial success in these companies.” (A, 34:25)

10. Nonprofit and Online-Only News Orgs

• Promise & Challenges:
  • Nonprofits and digital outlets like the Texas Tribune and ProPublica do important work, but cannot match the scale or reach of the old local newspaper model.
    • “It is difficult to make them scale...capitalism scales well, and this particular thing, you know, doesn’t.” (A, 35:55)
    • “If there’s a solution...the digital only and particularly the nonprofits are going to be a huge part.” (A, 36:53)

11. Public Funding of News: Hope or Trap?

• Pros and Cons:
  • Journalism serves a public good akin to libraries or universities—so why not public funding?
  • But fears of government interference and loss of independence remain strong.
    • “News organizations...have really not wanted to ever advocate for federal funding because they felt like it would diminish and cut into their independence.” (A, 37:50)
  • BBC and Voice of America as examples of success—now threatened by political interference.
    • “Voice of America...Trump has managed to come in and just dismantle all those safeguards...” (B, 38:34)
    • “BBC...is on extremely rocky ground right now and probably won’t survive.” (B, 40:29)

Notable Quotes & Memorable Moments

• On Local News as Watchdog:
  • “If they know that somebody is watching...restrain corruption in public officials.” – Margaret Sullivan (A, 06:04)
• On Impact of Decline:
  • “People become much less civically engaged...when there’s...a news desert...” – Margaret Sullivan (A, 08:26)
• On Ownership by Hedge Funds:
  • “They make money by strip mining...all with an eye to sort of next quarter’s balance sheet, not with an eye to sustaining journalism into the next decade.” – Margaret Sullivan (A, 18:59)
• On Audience Habits:
  • “We’ve trained people to think that [news] should be free.” – Margaret Sullivan (A, 15:48)
• On NYT Editorial Drama:
  • “Anything that happens at the Times gets elevated into this kind of, you know, insane thing.” – Margaret Sullivan (A, 27:21)
  • “Bari Weiss, I believe, canceled herself.” – Margaret Sullivan (A, 29:51)
• On Unions:
  • “I think they actually have been helpful...they serve a very good purpose.” – Margaret Sullivan (A, 34:25)

Timestamps for Major Segments

• Book Introduction / Local News Decline: 01:00–07:28
• Importance of Local Journalism: 06:04–08:26
• "News Deserts" & Civic Impact (Chris Collins story): 10:01–13:26
• Collapse of Newspaper Business Model: 15:48–17:53
• Hedge Fund Takeovers Explained: 17:53–22:20
• Billionaire Owners (Buffett, Bezos, et al.): 22:20–23:34
• NYT, Bari Weiss Resignation, Media Discourse: 23:34–30:04
• Bankruptcy Mechanics & Pension Issues: 32:33–33:43
• Role of Unions in Journalism: 34:25–35:15
• Digital/Nonprofit News, Scalability: 35:28–36:53
• Public Funding Debate & Examples (BBC, VOA): 37:50–40:29
• Numbers Round & International Perspective: 40:29–44:11

Additional Memorable Moments

• Margaret Sullivan’s NYT “Spy Story”: Secretly receiving an internal tip in a bag on a street corner (24:58–25:34)
• Closing Note on the Disappearance of News Internationally:
  • Referencing the silencing of ABS-CBN in the Philippines and government pressure on news globally (44:11–45:41)
• Margaret’s Cat, Ricochet: Provides a lighter endnote to a heavy episode (45:30–46:07)

Takeaways

• Local journalism is in crisis: decimated by a broken business model, predatory ownership, and failure to adapt, with real-world consequences for democracy and civic life.
• Nonprofit and digital news are promising, but face scale and sustenance challenges.
• Solutions like public funding carry risks, but may be increasingly necessary.
• The profession is still rich with people who care deeply, but journalism’s future is far from certain.

For listeners who missed the episode, this summary captures all the crucial debates, insights, and characterful moments from an essential conversation about the fate of local news—and democracy itself.