Trickle-down newsonomics: If the Denver Post dies, so has part of our citizenry

This column was originally published by The Rocky Mountain Collegian on April 11, 2018, after layoffs at The Denver Post were announced.

There is a surplus of information available to consumers right now. It’s on Google, it’s on Facebook, it’s on Twitter, and if you can’t be bothered, it’s likely your friend will mention it to you. It’s also free. But, Colorado has a shortage of reliable information suppliers, or journalists.

It’s about to get worse: The Denver Post announced a new round of layoffs on March 14. Thirty people will or have already lost their jobs. One-third of the already stripped and relocated newsroom will disappear.

If information was a product, if readers paid for that product and if journalists acted as a normal workforce, maybe this could all be explained by a trite tale of the internet’s power and the declining relevance of printed newspapers. But, none of these roles quite fit The Post’s story.

1) The news isn’t a product; it’s a public good. If the Denver Post reports that a deadly crash happened on Colfax and Broadway, it can’t charge people for that information. Once crime reporter Noelle Phillips publishes the story and you see the headline, you can tell all your friends. Other newspapers can reprint the story. The local news station can make a package. The journalist will never be fairly compensated for the service she just provided, and nearly all it will be stolen within the day. Noelle can’t protect her information either. Not only is it unethical and impossible, legally, news facts are public domain.

2) Most people don’t pay for their news. Some people subscribe to the print or online product, and I won’t advocate against that. But ultimately, if I really want to read something in The Washington Post and I don’t have a subscription, I’ll just open a private browser. On principle, I subscribe to three newspapers and one magazine, but only out of convenience and the goodness of my heart, not because the market forces require me to do so. We have a positive externality for news production. Everyone benefits, but only a few people pay (see: free-rider problem in economics).

3) Journalists aren’t normal. At least in the decade, journalists knew that they would enter a struggling industry with declining wages, but they continue to do it. Reporters could be considered “prisoners of love,” to draw from a concept in care economics developed by Nancy Folbre. They believe so much in the purpose of their job that they are willing to endure unreasonable work hours, little pay, tiresome demands and heartbreaking losses in order to continue what they believe is an essential service to democracy. For better or for worse, it puts journalists at a clear disadvantage in bargaining power with their owners.

The Denver Post is owned by Digital First Media, a parent company for 97 newspapers, which is in turn owned by Alden Global Capital, a hedge fund. Alden Global Capital acquired then MediaNews Group Inc. (now Digital First Media) in 2010 out of bankruptcy.

But as the economy recovered from the 2008 recession, so did journalism. DFM’s chief executive, Steve Rossi, said the company was “solidly profitable” and that “advertising revenue has been significantly better” than competitors this past year. The Denver Post’s profits alone were more than $25 million at the end of fiscal year 15, inside sources told Westword, and those profits have risen at a rate of about $2 million per year for a few years. Readership is growing and outperforms every other media outlet in the state. They won five Pulitzer Prizes between 2000 and 2013.

In contrary to the financial stability of The Post, Heath Freeman, the president of Alden Global Capital, appears to have a different motive than the long-term success of profitable newspapers and thus a healthy and informed citizenry. Instead, as a Bloomberg columnist Joe Nocera wrote, he appears to be cutting to pull out cash for other poorly performing investments in the hedge fund. Alden Global invested $80 million in Homex, a developer charged by the SEC for committing real estate fraud and put $158 million into Fred’s Inc., a “failing pharmacy chain.”

The Denver Post’s woes are not a result of free market economics. By all capitalist measures, they won. Their profits are increasing, readership is growing and they are dominating their competition.

The idea that people have simply stopped demanding information about their communities is at best, misinformed, and at worse, a dangerous lie about citizen apathy.

Maybe Freeman’s bad investments will catch up to him in the free market. I hope they do. But before that will happen, our hometown/home state newspaper will be dead, and that’s bad for every single Coloradan even if you don’t read the paper.

With the largest audience and largest newsroom in Colorado, the work produced at The Denver Post trickles down to every media outlet in the state and many across the region and nation. Whether or not we realize it, there’s a pretty good chance that news on the radio, on tv or on social media about Colorado was reported by The Denver Post first.

Since the way information is spread prevents consumers from realizing every single time we come across Denver Post reporting, when that reporting is gone, we won’t know what we’re missing.

You won’t notice local research is missing from your Business 300 paper because it won’t exist. You won’t vote your local congressman out of office because you won’t know he’s corrupt. You won’t protest that local business because its scandal was never uncovered. You’ll notice there aren’t any newspapers on the rack, but will you notice a hole in community knowledge?

We will never know how deeply or widely our state will be taken advantage of once The Denver Post dies. When that day comes, as we watch the death of an institution by and for the people, we should simultaneously mourn a loss to our own power as citizens.

——

How to help The Denver Post: 

  • Subscribe to the print product.
  • Subscribe to the online product.
  • Tell advertisers you noticed they advertise with The Denver Post.
  • Advocate for local journalism. In other words, advocate for yourself.

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