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BREAKING: The ways people hear about big news these days; “into a million pieces,” says source
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March 4, 2024, 2:42 p.m.
Business Models
LINK:  ➚   |   Posted by: Sophie Culpepper   |   March 4, 2024

Since Report for America launched in 2017, the nonprofit has placed more than 600 reporters in local newsrooms around the country, including for-profit and nonprofit newsrooms alike. The hundreds of newsrooms the organization has placed those reporters in vary in geography, size, business model, and funding sources. And they’ve included, somewhat controversially, chains owned by hedge funds — which are widely loathed within media as the vultures picking the bones of local news outlets clean.

But Report for America’s approach to those newsrooms is changing. At a Journal-isms roundtable last week on “Surviving the collapse of traditional business models,” Kim Kleman, Report for America’s executive director, told attendees that while the organization has had partnerships with hedge fund-owned news organizations in its time operating, “we are phasing those out.” Journal-isms, a blog about media and diversity, confirmed the news in an article published this weekend.

Kleman’s comments came in response to a question from Tracie Powell, founder and CEO of the Georgia-based Pivot Fund, which maps, funds, and supports news organizations trusted by people of color. Powell emphasized that while the Pivot Fund supports both for-profit and nonprofit outlets, like Report for America, Pivot specifically focuses on investing in “independently owned for-profit organizations — community-based, and serving, organizations.” She then asked Kleman, “Do you think there is an issue with nonprofit dollars going to corporate news organizations, specifically those that are owned by hedge funds?”

Kleman responded, “We started at Report for America working with what are now hedge fund-owned organizations because we considered ourselves as supporting communities, and sometimes, those newsrooms owned by those organizations, those companies, were the only game in town.”

She continued, “We have seen so much need over the years by independent for-profit [and] certainly nonprofit organizations that we have some newsrooms that are owned by hedge funds, but we are phasing those out.” (A clearly surprised Richard Prince, a longtime columnist writing about diversity issues in media and the roundtable host and moderator, interjected, “Oh really!” You can listen to the comments yourself in the recording around the 50-minute mark.)

Steven Waldman, Report for America co-founder and former president, and fellow co-founder Charles Sennott had both previously defended their decision to place reporters in such newsrooms. In 2020, for instance, Waldman told Dan Kennedy, “we have on occasion accepted applications from newspapers with the problems you mentioned if we were convinced that they would use the reporter to better serve their readers. If we can be a positive force in helping those newspapers tip more in the direction of great journalism, we view that as a real positive step.”

But in a way, this full break with hedge fund-owned outlets seems like the natural conclusion of a shift away from hedge fund-owned publications that RFA began in 2021. Despite defending RFA’s rationale for funding reporters in these newsrooms, Waldman also made no secret of his qualms about the damage hedge funds can do to local news. In late 2021, one of those hedge fund-owned chains took offense. Columbia Journalism Review reported then that Waldman’s LA Times op-ed questioning the viability of hedge fund ownership as a business model for sustainable, robust local news led McClatchy (controlled by the hedge fund Chatham Asset Management since 2020) to choose not to renew its partnership with RFA. At the time, 31 RFA journalists were reporting across 21 McClatchy newsrooms, per CJR.

Some local and national journalists, among others, voiced praise and critiques of Report for America’s decision on Twitter (or X).

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