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Illustration: Sarah Grillo/Axios

The local news crisis is hitting major cities across America, proving that big papers aren't immune from the financial pressures that are causing a near collapse of hundreds of local outlets across the country. In some case, their problems are harder to solve.

Driving the news: In a desperate plea for help, two investigative reporters at The Chicago Tribune penned a New York Times editorial Sunday, foreshadowing signs of major cuts at the 173-year-old paper, following its acquisition by Alden Global Capital, a hedge fund known for cutting journalists at local papers to maximize profits.

  • "In a signal of what may happen in Chicago, on Jan. 13, we and other newsroom staff members were offered buyouts," writes The Chicago Tribune's David Jackson and Gary Marx.
  • "Now, we are bracing for the sight of colleagues with decades of experience walking out with cardboard boxes in their arms and tears streaming down their faces."
  • Jackson and Marx are referencing steep cuts to the Denver Post, a paper that was also gobbled up by Alden Global Capital.

The trend is spreading across the country. Just two days before their colleagues at the Chicago Tribune penned that op-ed, a reporter at the Orlando Sentinel also detailed a similar experience of being offered a string of buyouts to encourage senior journalists to leave. The Orlando Sentinel, as part of the Tribune chain, is also owned by Alden Global Capital.

The big picture: Cuts to big-city papers around the country are happening parallel to an increase in ownership of newspapers by hedge funds and private equity firms that have absorbed the entities to find synergies and potentially make some cash.

  • A study released in 2018 by the University of North Carolina’s School of Media and Journalism found that newspaper sales and closures/mergers via the seven largest newspaper investment owners have increased over the past five years, as big hedge firms or private equity groups based in large cities take over.

Between the lines: Large city and regional papers often compete with national papers, like The New York Times or The Washington Post, for subscribers, because national outlets often cover topics that appeal to city populations or coastal elites.

  • The New York Times, which is publicly traded but family-controlled via a dual-stock structure, and The Washington Post, which is owned by Jeff Bezos, are considered two of the only big success stories in newspaper turnarounds in the country.
  • For example, The Times said last week that it surpassed its goal set in 2014 of doubling its annual digital revenue to $800 million by 2020, a full year ahead of schedule in 2019.

Be smart: Even some national titles owned by billionaires or well-off families, are struggling.

  • The Seattle Times, which is majority-owned by Frank Blethen and his family, is facing dozens of layoffs as the paper prepares to close its main printing plant this week.
  • The Los Angeles Times, which was purchased by billionaire Patrick Soon-Shiong in 2018, hasn't been able to turn its paper into a digital success. The L.A. Times missed its subscriber goals for the first half of this year and reported having 170,000 digital-only subscribers as of July 2019, a fraction of other national rivals, like The Washington Post, The Wall Street Journal and The New York Times.

Go deeper: Cities are turning into news deserts

Go deeper

Janet Yellen confirmed as Treasury secretary

Janet Yellen. Photo: Alex Wong/Getty Images

The Senate voted 84-15 to confirm Janet Yellen as Treasury secretary on Monday.

Why it matters: Yellen is the first woman to serve as Treasury secretary, a Cabinet position that will be crucial in helping steer the country out of the pandemic-induced economic crisis.

Dan Primack, author of Pro Rata
3 hours ago - Economy & Business

Scoop: Red Sox strike out on deal to go public

Illustration: Sarah Grillo/Axios

The parent company of the Boston Red Sox and Liverpool F.C. has ended talks to sell a minority ownership stake to RedBall Acquisition, a SPAC formed by longtime baseball executive Billy Beane and investor Gerry Cardinale, Axios has learned from multiple sources. An alternative investment, structured more like private equity, remains possible.

Why it matters: Red Sox fans won't be able to buy stock in the team any time soon.