Local Journalism under Private Equity Ownership

Local daily newspapers have historically played an important role in U.S. democracy by providing citizens with information about local policy issues. However, in recent decades local newspapers have struggled to compete with new online platforms for readers’ attention. Private equity investors—who specialize in reorganizing struggling firms in distressed sectors—have entered the industry. How do these new owners affect newspaper content, survival, and local civic engagement? We document nuanced effects, contrasting with the polarized debate on this topic in the media and political discourse. On one hand, we find that private equity ownership leads to higher digital circulation and lower chances of newspaper exit. On the other hand, we document a change in news composition away from information about local governance, and lower employment of reporters and editors. Finally, we find declines in participation in local elections, consistent with local newspaper content being relevant for civic engagement. The results have implications for knowledge about local policy issues and highlight trade-offs surrounding media ownership.