Regional newspapers and democracy

Worrying about the future of the regional paper and what it means for democracy and accountability

Alaska Dispatch News, formerly known as the Anchorage Daily News, filed for bankruptcy protection last week.

It is the latest casualty as the internet devastates the advertising revenues of regional newspapers like ADN, and traditional media more broadly. The potential demise of the regional newspaper—and its impact on local democracy—is something everyone should be concerned about. Especially if you live in a place like the Yukon where government dominates the landscape.

The bankruptcy documents show how serious the situation is. According to the ADN’s own business reporters, who have to cover the potential demise of their own employer, the business is losing US$125,000 per week and has racked up debts of US$2.5 million to suppliers. It lost US$5.8 million in 2015, a burn rate that had accelerated to US$4 million in just the first six months of this year.

In the old days—that is, a couple of years ago—regional newspapers were often considered cash cows. Alaskan businessperson Alice Rogoff, who founded online-only news site Alaska Dispatch in 2008, paid US$34 million for Anchorage Daily News and its building as recently as 2014. Although Rogoff may have recovered some of her investment when ADN sold some of its real estate after the purchase, her ownership stake is now likely worthless.

Meanwhile, as part of a “strategic restructuring” earlier this month, the owners of the Juneau Empire sold it and other Alaskan papers to GateHouse Media, part of a large national media company.

The Pew Research Center’s authoritative reports on the US newspaper industry underline the severity of the trends. Weekday circulation in the US peaked at over 60 million in the 1980s. After a steady decline, which accelerated in the last few years, that has fallen to just 34 million in 2016.

The revenue picture is even worse, since advertising revenue has fallen off a cliff. Total advertising revenues for US newspapers were over US$49 billion in 2006. A decade later ads brought in only US$18 billion.

Digital revenues have been climbing, but not fast enough to make up for the collapse in traditional print revenue. Despite the fact that millions of Americans primarily get their news from the web, only 30 percent of the industry’s advertising revenues came from digital in 2016.

In the ADN’s case, it reports 4000 digital-only subscribers. This is not enough to make up for falling print circulation, which has been falling 7-10 percent per year since 2014.

Think about that last number for a minute. How many businesses could survive losing 20-30 percent of its customers in just a couple of years? Especially in the newspaper business, where you have high fixed costs and have to pay for the printing plant and newsroom whether you sell lots of papers or just a few?

These trends are hitting the entire industry. But I suspect regional papers are especially at risk. Some of the biggest and best-known publications may even be able to reach more people than ever before thanks to the internet. For example, thanks to its excellent coverage of U.S. politics I just signed up for the Washington Post’s $19 US per year plan for international subscribers.

As a citizen, I am worried about the future of the regional paper and what it means for democracy and accountability. (Full disclosure: in case you haven’t noticed already, I write a column for a regional newspaper).

From St. John’s to Anchorage, for the last century regional papers have played a critical role in informing citizens, shining a spotlight on the decisions of senior officials and helping them hold politicians to account at the ballot box. You may not like some of the things government does in the Yukon, but I am pretty certain things would be much worse if ministers and bureaucrats didn’t have to worry about ending up on the front page of a Yukon-based newspaper or as the lead story on the morning radio news.

Nor is it just the government. The possibility of ending up on the front page also keeps people running businesses, unions, advocacy groups and other organizations on their toes. That’s good for the rest of us.

It’s not obvious how we can retain strong Yukon news coverage in the digital age. Some have suggested government money is the solution. If it funds the CBC, why not expand the model to other media? This raises serious questions about who would get the money and how editorial independence could be maintained.

Others say that if citizens believe strongly enough in local news, they will pay for it. The election of Trump and the impact of fake news in the U.S. has prompted quite a few people to sign up for subscriptions for media they used to read for free.

We shall see if this makes a difference. I would encourage readers to subscribe digitally and pay a few bucks towards their favorite media outlets.

Some papers are becoming parts of bigger outfits. GateHouse, the new owners of the Juneau Empire, said that “Every newspaper company in America is battling trends and redirected advertising dollars, so it is necessary for newspapers to be part of a large newspaper group to build and maintain the necessary resources to compete.” The Yukon News itself is owned by Black Press, which publishes more than 170 titles.

There is also the tycoon option. Amazon billionaire Jeff Bezos bought the Washington Post a few years ago, for example. I don’t know the Post’s financial situation, but he can easily afford the millions required to cover a newspaper’s losses if he strongly believes in the role of such a newspaper.

The consortium that has emerged to buy ADN out of bankruptcy is an Alaskan version of this. Fairbanks businessman Ryan Binkley and Nome-based Jason Evans are leading a group that plans to put up $1 million to takeover ADN and keep it alive.

Of course, readers may wonder how the opinions of the owner filter through into the news. But if readers won’t pay enough to make the business model profitable, they may have to live with that. He who pays the piper, calls the tune, as they say.

Maybe today’s newspapers will be replaced by crowds of leaner, smaller digital news players who don’t have liabilities for old printing plants, clunky computer systems and pensions for retired journalists. It’s a possibility, although we haven’t seen such an outfit break through the general readership in the Yukon. I doubt any online news platform in Alaska would ever have the 52 newsroom staff that power ADN’s extensive Alaska coverage.

Regional newspapers have served us well over the last hundred years, and thanks to advertisers we didn’t have to pay the full cost of the reporting. That may have to change.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.


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