Tuesday, June 26, 2012

The new media moguls (they're not journalists)

A problematic development of recent years is the take-over of significant media companies by investment firms in the roles of equity investment or venture capital financiers. Whereas even most media conglomerates had been headed by people with experience in some field of journalism, these investment firms are non-journalism enterprises focused solely on profits.

Martin Langeveld of the Nieman Journalism Lab put a spotlight on these new private financial firms taking over media companies in January 2011. <link> He followed that up with another in-depth look at these non-journalism entities and their media holdings in March 2011. <link>

Editor James O’Shea described the new finance: “By early 2007, Wall Street had undergone a dramatic transformation. The investors and investment banks circling (media companies) were . . . creating fee-laden packages of loans that could be converted into securities and peddled to big pension funds, institutional investors, or hedge funds and make even more money.” The most active private investment firm now is Alden Global Capital. <link>

Clear Channel Communications, the nation’s largest operator of local radio stations, and the newspaper chains Journal Register Co. and Freedom Communications, are just three of several media companies taken over recently by investment consortiums. There have been many other post-2000 media buyouts by investment firms, including Univision, TV Guide, Warner Music, and Reader’s Digest.

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