Financial Markets

LOCAL NEWS CRISIS DEEPENS: ONE THIRD OF 2005'S US NEWSPAPERS TO BE GONE BY 2024, LEAVING COMMUNITIES IN NEWS BLACKOUT

The accelerating demise of U.S. newspapers is not just reshaping the landscape of American journalism but is also foreboding an intensified crisis for democracy itself. Analysts now predict that by the end of 2024, America will have lost one-third of its newspapers, a dire scenario unfolding faster than the previously forecasted 2025. Considering the current count of approximately 6,000 newspapers, down from 8,891 in 2005, this prediction paints a stark picture of the future: whole swathes of the country becoming "news deserts".

The term "news desert" is gaining traction as a majority of communities losing their local newspaper do not get a replacement. As a testament to this increasing phenomenon, more than two newspapers have ceased publication per week on average since 2023. The result: half of U.S. counties are left with only a single source of local news, and that typically entails a weekly newspaper.

Ironically, the regions most at risk of parching into news deserts are those already suffering hardship. Counties at high risk are usually those straddling high poverty lines, serving significant minorities, already marginalized and in dire need of robust, local news coverage. This growing divide in local news access represents a major crisis for democracy, contributing to political polarization, decreased civic participation, and the spread of misinformation.

Hedge funds, which in years past bought newspapers in droves, are now having second thoughts. Unprofitability and rapid industry changes are forcing them to retract and abandon these assets, leading to closures or sales. As these traditional newspapers fade into obscurity, the digital news frontier, which could have potentially filled the void, remains severely under-invested and localized mainly in metropolitan areas already saturated with coverage.

In response to the impending news drought, several potential solutions are being explored. The urgency of the situation is prompting regulators and philanthropists to explore alternatives such as substantial financial commitments to journalism and innovative regulatory actions like news vouchers and tax credits.

The goal is clear and pressing: halt the expanding "news desert," replenish the journalistic landscape, and embolden democracy. This crisis underscores the critical need to foster equitable access to information, maintaining an informed public that forms the very bedrock of democracy. As we stare into this impending reality, the ability of communities to sustain democratic principles in an era marred by news disparities will be the litmus test of our collective resilience.

In essence, this report is a call to arms - to innovators, entrepreneurs, philanthropists, and policymakers alike - to ensure a future where every American, regardless of geographical or socioeconomic boundaries, retains that essential access to local news, the lifeblood of a thriving democracy. It's a future that seems indomitable but no more so than the spirit of truth and press freedom at the heart of American journalism.

The stark predictions provide both a challenge and an opportunity. The opportunity: to reimagine the paradigm of news dissemination, bias against socio-economic injustices, and strive for a landscape where news coverage is a right, not a privilege. For the challenge: tackling the transformation and ensuring the survivability, sustainability, and relevance of local news. In the wake of disappearing newspapers, the future of United States democracy hangs in the balance. The actions we undertake today will invariably shape this eventuality.