Local Journalism under Private Equity Ownership
Local daily newspapers historically played an important role in U.S. democracy by providing citizens with information about local policy issues. In recent decades, local newspapers have struggled to compete with new online platforms. In the first study of private equity (PE) in a struggling industry, we find nuanced effects. PE leads to higher digital circulation and lower chances of newspaper exit. However, the composition of news shifts away from local governance, the number of reporters and editors falls, and participation in local elections declines. The results have implications for knowledge about local policy issues and highlight trade-offs surrounding media ownership.
We are grateful to Joshua Coven, Ammon Lam, Jun Wong, and Shiyu Zhang for excellent research assistance. The authors would like to thank Victoria Ivashina, Arthur Korteweg, Theresa Kuchler, Jesse Shapiro, Andrei Shleifer, Johannes Stroebel, David Yermack, and seminar and conference participants at NYU Stern, the Southern California Private Equity Conference, the Western Finance Association, and the Utah Winter Finance Conference. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.