Press

Floor Speech

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Mr. SCHUMER. Madam President, on another matter, late last week, I had the privilege of addressing an audience at the Newseum about the current challenges facing the free press in America.

One of the most significant challenges the press faces, of course, is economic. Besieged by a fractured media landscape and rapidly changing technology, newspapers have been forced to adapt or die. Some have adapted, but many have died.

One area in which it is particularly troubling to me is in smaller markets in midsized and smaller cities. In those areas, local newspapers have been the glue that keeps communities informed and stitched together. I have seen it. In cities in Upstate New York-- small- and middle-sized--big companies have left, and some of the community banks have been bought up by major large banks. The things that keep a community together are greatly deteriorating. Newspapers are one of the few glues these communities have. They are vital--way beyond the profit and loss that they might make. The external benefits of these newspapers, as the economists would say, are large, but they are in trouble because of all the economic issues I mentioned.

Now there is a new threat on the horizon. A few weeks ago, a hedge fund, known as the ``destroyer of newspapers,'' announced a bid to take over Gannett, which, in addition to USA Today, publishes a lot of small- and medium-sized newspapers and four important papers in my State, those being the Democrat and Chronicle in Rochester, the Press & Sun in Binghamton, the Poughkeepsie Journal, the Journal News in Westchester, and newspapers in Elmira and Ithaca.

This morning, on the front page of the Washington Post, there is an article about the business practices of Alden and its subsidiaries. Essentially, Alden's strategy is to buy up newspapers, cut staff, and then sell the commercial real estate of newsrooms and printing presses for profit. The article quotes several experts who have said of Alden:

They are the ultimate cash flow mercenary. They want to find cash flow and bleed it to death.

Their principle is ``no new investment and sell off what you can while you can,'' according to analysts who have studied it.

An analysis of the newspapers owned by Alden revealed that it cut newspaper staff at more than twice the rate of its competitors. In all likelihood, when it sells the real estate, the vast majority of the money does not go to revitalizing newspapers, as a newspaper itself would do when it sells real estate; it goes elsewhere. For Alden Global Capital, the hedge fund, the acquisition and streamlining of Gannett papers might increase its profits a couple of percentage points, but the loss of the Press & Sun and the Democrat and Chronicle would be incalculable.

Let me ask the American people and every one of my colleagues here: What is more important--having our newspapers go on, which is so important to local communities, or having a hedge fund raise its market profits by five points, if it is public, or by a certain amount? What is more important? I would argue: the newspapers.

The Gannett consortium was already the result of a consolidated news business, with one reporter working multiple beats and placing stories in multiple newspapers. I have seen that in Upstate New York. What was already an overburdened, undersourced operation now faces potential annihilation by an indifferent media conglomerate that is backed by an even more indifferent hedge fund.

What do we do about this?

I don't know how to solve the broader economic problem for newspapers, big and small. I hope there is a solution. The only antidote to these problems, as I have seen, is the rarer and rarer presence of generous, civic-minded families and individuals who own news outlets for the right reasons, not simply to maximize profits-- although profit is still important--but because they feel an obligation to advance journalism for the greater benefit of us all. Everyone has seen this work at flagship newspapers, but the family model has worked in smaller markets as well, including at several papers in Upstate New York.

So I would propose that charitably inclined institutions and individuals should begin to think of journalism as a philanthropic endeavor. If it becomes a worthy endeavor to buy a local newspaper and preserve its size and independence--just as it is a worthy endeavor to support the local hospital, school, charity--many more might consider doing it.

As Americans, we must continue to support the First Amendment--the freedom and viability of the press. Our democracy depends on it.

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