A recession, then a collapse

“The last recession was brutal for newspapers and local news. The next one could be an extinction-level event, especially for small dailies owned by big corporate chains that have pillaged local newsrooms and local leadership.”

The last recession was brutal for newspapers and local news. The next one could be an extinction-level event, especially for small dailies owned by big corporate chains that have pillaged local newsrooms and local leadership.

It will rapidly accelerate a transition that’s well underway. Local newspapers that used to “do it all” will be replaced by a diverse ecosystem of independent and authentically local grassroots news and information sources.

It will be painful, and messy — for some communities more than others — and difficult to measure.

With only one exception in its history, the country has never gone more than eight years without experiencing a recession. It’s been eight and a half since we emerged from the last one.

The last recession was especially tough on newspapers because disruptive technologies emerged at the same time. Help wanted and other classified advertising dried up because no one was hiring. And when it came back, it was on Craigslist, not in newspapers.

The next recession could wipe out some of the remaining revenue categories that are keeping small daily newspapers afloat — preprints, for example. And it’s a pretty safe bet that a technological shift will emerge to make sure they never come back.

Since 2009, ownership of local newspapers has consolidated rapidly to a handful of big companies, and several of the biggest — including GateHouse and Digital First Media — are owned by hedge funds with no background or commitment to the journalism business, and likely no long-term future, either. Hundreds of small local dailies are in the hands of owners who are using newsroom cuts to milk profits for the short-term.

They aren’t making any investment in the future of these newspapers, because their future existence isn’t even in the business plan. They’ll run them with as little staff as possible, as long as there is profit to take, and then they’ll shut them down. Some might as well be shut down now, as they’re operating without news staffs that make an appreciable contribution to local journalism.

The recession will be blamed when these chains start closing dozens of small local dailies, but the prescription has already been written.

It will be left to individual communities to take responsibility for their own local news and information needs, and support grassroots replacements of what is lost. In almost every case, that will take a patchwork quilt of solutions — a general-interest local online news site, a niche nonprofit going in-depth on one particular topic, public radio, a local access cable television station, the library, activists, Facebook groups, and the closest surviving metro, all playing off each other, and maybe even collaborating.

It might take 5,000 local independent online news efforts to replace what would be lost by the demise of 1,300 daily newspapers. But from Berkeley, California, to Luther, Oklahoma, Great Falls, Montana, to Burlington, Vermont, there are at least 600-plus nonprofit and for-profit local online news sites, possibly hundreds more, already operating in the U.S. The solution that’s emerging is so grassroots that it’s difficult to even know what already exists. Sites are being launched in tiny Midwestern towns and in big city neighborhoods by instant local news entrepreneurs who’ve never even heard of Nieman Lab or the Knight Foundation.

In some ways, it’s a great equalizer. You don’t have to own a printing press or a radio tower to play a crucial role in local journalism. And you don’t have to return a 25 percent profit margin to some out-of-town investor. This new crop of local independent online news publishers usually just want to make an adequate living doing journalism in their communities.

In some cases, that’s giving voice to people and communities who were never well-served by newspapers and producing journalism on niche topics that was never pursued adequately under the legacy structure, even in the glory days.

But it’s far from an easy business, and displaced journalists who go into it without a serious commitment to revenue, not just newsgathering, won’t make it. Even those who do could face difficult circumstances in some communities, where a nonprofit model and outside support might be required. The next recession will likely wipe out some existing online local news efforts before it creates the need and opportunity for a lot more of them.

The challenge for funders, academics, vendors and others who are invested in the future of news is how to create an environment where these enterprises are more likely to be successful and sustainable.

Matt DeRienzo is executive director of LION Publishers, a national nonprofit that supports the publishers of local independent online news sites.

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