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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

1 dead as severe storms pummel the South

A tree that fell on a home carport damaged a vehicle during a storm in Central, Louisiana. No injuries were reported, according to Central Fire Department. Photo: Central Fire Department/Twitter

Strong storms lashed the South early Saturday, spawning at least one tornado and unleashing powerful winds and hail. And forecasters warned more severe weather was expected to hit parts of the region in the coming hours.

Details: Thousands of customers lost power in Florida, Mississippi, Arkansas, Texas and Louisiana, according to tracking site poweroutage.us. An F3 tornado that hit St Landry Parish, Louisiana, killed one person and wounded seven others.

Scoop: Biden eyes Russia adviser criticized as soft on Kremlin

Photo: Alexander Shcherbak\TASS via Getty Images

President Biden is considering appointing Matthew Rojansky, head of the Wilson Center's Kennan Institute, as Russia director on the National Security Council, according to a source familiar with the situation.

Why it matters: Rojansky has been praised for his scholarship on Russia and is frequently cited in U.S. media for his expert commentary. But his work has drawn criticism — including in a 2018 open letter from Ukrainian alumni of Kennan that blasted the think tank he runs as an "unwitting tool of Russia’s political interference."

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Coronavirus cases hold steady at 65,000 per day — CDC declares racism "a serious public health threat" — WHO official: Brazil is dealing with "raging inferno" of a COVID outbreak.
  2. Vaccines: America may be close to hitting a vaccine wall — Pfizer asks FDA to expand COVID vaccine authorization to adolescents — CDC says Johnson & Johnson vaccine supply will drop 80% next week.
  3. Economy: Treasury says over 156 million stimulus payments sent out since March — More government spending expected as IMF projects 6% global GDP growth.
  4. Politics: Supreme Court ends California's coronavirus restrictions on home religious meetings.
  5. World: Iran tightens COVID restrictions amid fourth wave of pandemic.
  6. Variant tracker: Where different strains are spreading.