Those kind of profit-oriented financial institutions are not part of the answer to the conundrum of how to sustain the news business, said Kim Kleman, Report for America’s executive director.
“Hedge fund ownership of local newsrooms is not a business model we support,” she told The Washington Post. “America has seen the results: an axing of staff and also local news coverage.”
That means that some major chains — including Gannett and Tribune Publishing — will no longer receive new reporters from the Report for America corps, though those currently placed in newsrooms will be able to finish their service.
Kleman first commented publicly about the decision at an industry panel last week. Considering the overwhelming demand by newspapers to host Report for America corps members, she said, the program “has to be very strategic and very picky about who we work with.”
To date, Report for America has placed 607 journalists in some 339 newsrooms, including nonprofit organizations, locally owned business and public media outlets. The organization initially covers half the salary of its journalists, with the participating news organizations on the hook for about a quarter.
Some 15 percent of those corps members (as they are called) have worked at news organizations owned by or associated with hedge funds, including 21 current journalists.
Lark-Marie Antón, a spokeswoman for Gannett, declined to comment on Report for America’s announcement but argued that the company is investing in local journalism. A representative for Tribune Publishing did not immediately respond to a request for comment.
Some journalists and industry-observers cheered the decision. American University journalism professor Margot Susca said it was “a long time coming.”
Underwriting salaries at those newsrooms is simply “helping the firms that are most responsible for destroying American newspapers,” said Susca, author of the recent book “Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy.”
Others, though expressed concern Monday that journalists working at hedge fund-associated newspapers would be hurt by the disappearance of corps members, who fill staffing gaps and report on under-covered issues and communities.
“Ah yes, making zero difference to the greedy hedge fund owners who could not care less and negatively impacting the hard-working journalists who already suffer under hedge fund ownership and the deserving communities they serve. Excellent, good,” wrote Elizabeth Hernandez, a reporter for the Denver Post, which is owned by the Alden Global Capital-controlled MediaNews Group.
The union that represents the Morning Call of Allentown, Pa., which is owned by the same conglomerate, wrote on X: “We get the sentiment at work here but it’s just another way the journalists at these papers will pay for the sins of their owners.”
While success can be hard to quantify, Kleman said that corps members have published about 60,000 stories and that 82 percent have remained in journalism after they finished their stints.
“We are not only helping to grow the pipeline but sustain it,” she said.
Report for America’s leaders had previously maintained that working with hedge fund-controlled publications could accomplish their mission of aiding communities by providing trustworthy local news.
While Report for America sent some corps members to work for Tribune Publishing-owned publications, including the Baltimore Sun, Kleman said they mostly stopped after it became clear that Alden Global Capital would purchase the company.
The McClatchy newspaper chain, which is owned by Chatham Asset Management, decided in 2021 to stop participating in Report for America, Columbia Journalism Review reported that year. That came a few months after the co-founder of the program, Steven Waldman, wrote an op-ed for the Los Angeles Times accusing hedge funds of “wrecking local news.”
“Their entire business model is based on maximizing profit for what is often a very small number of investors,” Susca said. “The losers in the game are citizens who rely on the local journalism that these firms control across the country. It is really an American tragedy.”
Despite her organization’s decision to “phase out” hedge fund-controlled newspapers, Kleman said she wishes those organizations and journalists well.
“We support these newsrooms. We support the staff. We support people doing local journalism no matter who their owners are,” she said.