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Illustration: Sarah Grillo/Axios

While big national newspapers grow stronger, local newspaper chains that have for decades kept the vast majority of the country informed are combusting.

Why it matters: The inequity between giants like the New York Times and the Wall Street Journal and their local counterparts represents a growing problem in America as local communities no longer have the power to set the agenda for the news that most affects them.

Driving the news: McClatchy, the publisher of dozens of local papers from the Sacramento Bee to the Kansas City Star to the Miami Herald, announced last week that it voluntarily filed for bankruptcy to allow the company to restructure its debt and pension obligations.

  • The bankruptcy ends family control of one of the largest newspaper publishers in the country, Axios’ Rashaan Ayesh reports.
  • It plans to hand the majority ownership to Chatham Asset Management, a hedge fund that also owns the National Enquirer tabloid.

The big picture: McClatchy’s bankruptcy is the latest in a string of major newspaper group fire sales and mergers in the past year.

  • Warren Buffett, a longtime champion of the newspaper business, sold his 30+ daily and 100+ weekly titles to Lee Enterprises earlier this month, after calling the newspaper industry "toast" due to terminal advertising decline.
  • GateHouse Media and Gannett, the two largest newspaper chains in the U.S., merged last year to create the largest newspaper holding group with over 650 papers. Its market cap today is .05% of Apple's.
  • Hedge fund Alden Global Capital became the largest shareholder in Tribune Publishing last year when it upped its stake in the newspaper giant to 32%. Employees at the Denver Post and the Chicago Tribune, both owned by Tribune, have complained for months about layoffs and staff cuts.

Meanwhile, the national giants are thriving.

  • The New York Times said earlier this month that it passed $800 million in annual digital revenue, most of which came from the 5 million+ people that now subscribe to the paper's digital subscription offering.
  • The Wall Street Journal said last week that it topped 2 million digital subscriptions for the first time.
  • The Washington Post has been profitable for the past several years under the ownership of Amazon founder Jeff Bezos, and has added dozens of positions to its newsroom in the past two years.

By the numbers: The past two decades have been an especially brutal time for the newspaper business. While some traditional ad businesses, like television and radio, have plateaued in the digital era, newspapers have completely fallen out.

  • Since 2005, newspapers have lost more than $35 billion in ad revenue, according to a report from PEN America.
  • Since 2004, newspapers have lost nearly half (47%) of all newsroom staff and nearly 1,800 newspapers — about 20% of the estimated national total — have closed.
  • Overall, newspaper guru Ken Doctor estimates that there have been about 20 newspaper bankruptcies since the Great Recession, many of which impacted family-owned newspaper businesses.
Expand chart
Data: eMarketer and Zenith Media; Chart: Axios Visuals

Be smart: The national papers have been able to attract digital subscribers all over the country — and the world — because they've invested a lot in marketing themselves as having distinct brand propositions.

  • The New York Times, for example, bills itself as a lifestyle services company, offering recipes, crosswords and style features in addition to news.
  • Meanwhile, "local papers, which spent decades and in some cases, centuries, as the only news game in town, haven't," says Jaime Spencer, executive vice president and head of local media at Magid.
  • "Their brands were built around core journalistic issues, like trust and factuality. Those are important, but not enough on their own face to create distinction that would cause someone to subscribe," Spencer added.

What's next: There are dozens of efforts and lots of money being thrown at the local news problem, but lasting few solutions. McClatchy's bankruptcy will almost surely be followed by more local newspaper consolidations and closures.

Go deeper

Axios-Ipsos poll: People of color face more environmental threats

Expand chart
Data: Axios/Ipsos poll; Note: ±2.5% margin of error; Chart: Sara Wise/Axios

Americans of color are much less likely than white Americans to experience good air quality or tap water or enough trees or green space in their communities, and they're more likely to face noise pollution and litter, a new Axios-Ipsos poll finds.

The big picture: Our national survey shows Black and Hispanic Americans are more likely than their white counterparts to live near major highways or industrial or manufacturing plants — and to have dealt in the past year with water-boil notices or power outages lasting more than 24 hours.

15 hours ago - Health

FDA advisory panel recommends Pfizer boosters for those 65 and older

A healthcare worker prepares a dose of the Pfizer-BioNTech Covid-19 vaccine at the Key Biscayne Community Center on Aug. 24, 2021. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

A key Food and Drug Administration advisory panel on Friday overwhelmingly voted against recommending Pfizer vaccine booster shots for younger Americans, but unanimously recommended approving the third shots for individuals 65 and older, as well as those at high-risk of severe COVID-19.

Why it matters: While the votes are non-binding, and the FDA must still make a final decision, Friday's move pours cold water on the Biden administration's plan to begin administering boosters to most individuals who received the Pfizer vaccine later this month.

15 hours ago - World

France recalls ambassadors from U.S. and Australia over submarine deal

Secretary of State Antony Blinken (L), French Foreign Minister Jean-Yves Le Drian (C), and French ambassador to the U.S. Philippe Etienne. Photo: Nicholas Kamm/AFP via Getty Images

France has taken the extraordinary step of recalling its ambassadors to the U.S. and Australia after both countries blindsided their French allies with a new military pact and submarine contract, the French Foreign Ministry announced on Friday.

The backstory: While sealing an agreement with the U.S. and U.K. to acquire nuclear submarines, Australia ripped up an existing $90 billion submarine deal with France. That led senior French officials to accuse the U.S. of a "stab in the back."