Key Takeaways
- • Report for America is phasing out partnerships with hedge fund-owned newspaper chains, a move confirmed by executive director Kim Kleman at a Journal-isms Roundtable on Feb. 27, 2024.
- • The nonprofit's current cohort includes 11 reporters at Gannett properties and one at a McClatchy newspaper, and no Tribune Co. papers, which are owned by hedge fund Alden Global Capital.
- • The break with McClatchy followed a two-year estrangement triggered by critical comments from co-founder Steven Waldman about hedge-fund ownership of newspapers.
- • Kleman said the organization will honor existing Gannett and McClatchy placements until corps members graduate, and cited the "recent history of hedge-fund ownership" as unsuitable for robust local news.
- • Cited research, including a 2023 study by Ewens, Gupta and Howell, links private equity ownership of newspapers to deeper staff cuts and reduced local coverage.
Summary
Report for America, the project of the nonprofit GroundTruth Project that has placed more than 600 journalists in 338 newsrooms since its 2017 founding, is phasing out its relationships with hedge fund-owned newspaper properties, according to executive director Kim Kleman. She confirmed the decision during comments at a Journal-isms Roundtable on the state of the news industry on Feb. 27 and in a follow-up email exchange. The current cohort includes reporters in 198 partner newsrooms, of which 11 belong to the Gannett chain and one to McClatchy. No Tribune Co. newspapers, which are owned by Alden Global Capital, are in the current cohort, and Kleman said they presumably will not be eligible as partners.
The pullout culminates a two-year estrangement with McClatchy Co., which reportedly severed its relationship with Report for America over critical comments by Steven Waldman, the project's co-founder and former president. In a 2021 Los Angeles Times op-ed, Waldman described the hedge-fund takeover of newspapers representing half of the country's total newspaper circulation as "a real threat to democracy." Columbia Journalism Review later reported, citing sources, that McClatchy, which then had 31 Report for America journalists at 21 publications, withdrew from the partnership. McClatchy's senior vice president of news, Kristin Roberts, would not confirm the company's plans. Kleman said the organization remains proud of its work with Gannett and McClatchy and will continue those placements until corps members graduate. Spokespeople for McClatchy and Gannett did not respond to requests for comment.
Kleman said the organization began by working with what are now hedge fund-owned organizations because those newsrooms were sometimes "the only game in town." She added that "the recent history of hedge-fund ownership, where a focus on profits has often decimated newsrooms, suggests that business model isn't the future for robust local news." The position is supported by research cited in the piece: an extensive 2023 study by Michael Ewens (Columbia Business School), Arpit Gupta and Sabrina T. Howell (New York University) found that private equity-owned newspapers reduced staff more deeply than peers, with notable losses in local news coverage that affected local political engagement. Margot Susca's book "Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy" makes a similar argument, describing the ownership model as "overharvesting."
The story also notes a 24-hour walkout on Feb. 1 by roughly 200 News Guild members at Tribune Co. papers, who accused Alden Global Capital of decimating the newsrooms it acquired. Kleman said demand from newsrooms has always exceeded the organization's resources; the cohort beginning in July adds 55 positions for a total of 200, and the group is being selective about partners it believes are committed to investing in journalism and their communities.
The pullout culminates a two-year estrangement with McClatchy Co., which reportedly severed its relationship with Report for America over critical comments by Steven Waldman, the project's co-founder and former president. In a 2021 Los Angeles Times op-ed, Waldman described the hedge-fund takeover of newspapers representing half of the country's total newspaper circulation as "a real threat to democracy." Columbia Journalism Review later reported, citing sources, that McClatchy, which then had 31 Report for America journalists at 21 publications, withdrew from the partnership. McClatchy's senior vice president of news, Kristin Roberts, would not confirm the company's plans. Kleman said the organization remains proud of its work with Gannett and McClatchy and will continue those placements until corps members graduate. Spokespeople for McClatchy and Gannett did not respond to requests for comment.
Kleman said the organization began by working with what are now hedge fund-owned organizations because those newsrooms were sometimes "the only game in town." She added that "the recent history of hedge-fund ownership, where a focus on profits has often decimated newsrooms, suggests that business model isn't the future for robust local news." The position is supported by research cited in the piece: an extensive 2023 study by Michael Ewens (Columbia Business School), Arpit Gupta and Sabrina T. Howell (New York University) found that private equity-owned newspapers reduced staff more deeply than peers, with notable losses in local news coverage that affected local political engagement. Margot Susca's book "Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy" makes a similar argument, describing the ownership model as "overharvesting."
The story also notes a 24-hour walkout on Feb. 1 by roughly 200 News Guild members at Tribune Co. papers, who accused Alden Global Capital of decimating the newsrooms it acquired. Kleman said demand from newsrooms has always exceeded the organization's resources; the cohort beginning in July adds 55 positions for a total of 200, and the group is being selective about partners it believes are committed to investing in journalism and their communities.
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