Jul 4, 2022 - Economy & Business

The local news crisis is deepening America's divides

Illustration of a crumbling newspaper
Illustration: Annelise Capossela/Axios

Around two newspapers in the U.S. are closing every week, according to a new report, suggesting the local news crisis spurred by the pandemic will worsen in coming years.

Why it matters: Hyperlocal communities are being disproportionately impacted by the fall of local newspapers compared to bigger cities, deepening America's economic divide.

  • The average poverty rate in a news desert, or a community without a local newspaper, in the U.S. is 16%, compared to the 11% national average, according to the new report from Northwestern’s Medill School of Journalism, Media, Integrated Marketing Communications.
  • "This is a crisis for our democracy and our society," said Penelope Muse Abernathy, a visiting professor at Medill and primary author of the report, in a statement.
  • "[W]hile the economic decline in many communities was occurring prior to the rise of news deserts, the loss of a local news organization will leave local residents without the critical information to begin to address those problems," Abernathy told Axios via email.
  • "At a minimum, the loss of local news worsens the political, cultural and economic divisions in this country."

Details: The average median annual income of a home in a news desert is $15,000 less than the average U.S. household. Only 20% of adults living in news deserts have bachelors degrees compared to 38% in the U.S.

  • The lack of reliable local news compounds governance issues that make communities less efficient and prosperous. One study suggests government costs increase when local newspapers shutter.
  • The report cites access to affordable broadband as one of the barriers blocking smaller, rural communities from gaining access to new digital news alternatives as newspapers decline.

State of play: Around 7% of America's counties now have no local news outlet and around 20% are at risk of their communities becoming news deserts in the foreseeable future.

  • The surviving newspapers are a fraction of their former size, and revenues and profits have significantly declined. In 2005, newspaper revenues topped $50 billion compared to roughly $20 billion today.
  • Newspaper employment has fallen by around 70% since 2006, with the most significant cuts (82%) attributed to production and distribution staff. The number of editorial staffers in local newsrooms have dropped by 58% to 31,000.
  • Since 2005, New Jersey and Texas have lost the most newspaper journalists per capita, but they — along with other heavily-populated states like California, New York and Illinois — have also seen the highest levels of new, digital investment.

Be smart: The demise of local news has caught the attention of many non-profits, community servants and wealthy individuals, but their efforts aren't enough to fill the void of growing news deserts nationwide.

  • Most communities that have lost newspapers haven't received a print or digital replacement.
  • According to the report, there are 545 digital-only state and local sites, but most employ six or fewer full-time reporters, and many are located in larger cities.
  • Still, more digital-only news sites have launched (64) compared to those that shuttered (45) during the pandemic, providing hope that digital investments can continue to grow, albeit slowly, as newspapers shutter.

The big picture: The local newspaper sector is in a state of terminal decline.

  • More than 360 newspapers shuttered between late 2019 and May 2022, according to the report. The vast majority of those papers were printed weekly.
  • At this rate, the country is on track to lose more than one-third of its total newspapers by 2025. It's already lost more than a quarter (2,500) since 2005.
  • Newspapers continue to be consolidated by hedge funds and private investment firms that believe they can wring more profits from the papers through synergies as the industry declines.

What to watch: A growing number of smaller chains and family owners are beginning to step in to at least slow that trend.

  • Newer regional chains like CherryRoad Media, Adams Publishing and AIM Media have begun to buy up papers being shed by bigger newspaper holding groups and operate them with low overhead and corporate costs.
  • Family chains like Paxton Media, Ogden Newspapers and Boone Newspapers have also continued to buy up smaller papers being shed by big groups, often preventing them from shuttering entirely.
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