The Things We Leave Behind

Photo by Evan Brandt

Front pages and special sections I rescued in my last visit to The Mercury building.

These things always seem to come in threes.

First was the news that management at The Mercury had left behind personnel files of current and former employees, complete with Social Security numbers, birthdays, addresses and even bank account numbers, when it abandoned our landmark building in June of 2018.

This has of course left all of us vulnerable to identity thieves, but in many ways, those of us who are left and who identify themselves as journalists first and foremost, have been experiencing a slow identity theft for years as profits and resources have been siphoned away from The Mercury by the New York hedge fund that owns us, Alden Global Capital.

Among those resources was the landmark Mercury building which, like the other properties it obtained when it purchased the majority of shares in what was once known as Digital First Media, it has sold off for cash that was not put to any use for the newspaper itself, but rather to fund Alden's other business ventures.

The building was sold on Oct. 22 for $440,000 to a company controlled by April Barkasi, the woman who founded and is the CEO of Cedarville Engineering Group, LLC.

She also purchased the bank building across the street at the northwest corner of High and North Hanover streets.

By all reports, she intends to turn it into a "boutique hotel" with a whiskey bar and cigar lounge in the basement where the newspaper's "vault" of old papers used to be housed.

When the Alden shell company 24 North Hanover St. LLC bought the building in 2013, it paid nearly  $1.2 million, according to Montgomery County property records.

I'm pleased to see this grand old building will get a new life and contribute to the ongoing revitalization of downtown Pottstown. (And let's face it, I never met a whiskey bar I didn't like.)

But before that happens, there is quite a bit of cleaning up to do.

Photo by Kevin Hoffman

You see, it wasn't just a few missed boxes of personnel records that were left behind,, a truly symbolic indication of the disregard the company had for the building and those who worked there.

They left everything. File cabinets, desks, old computers, furniture.

Those who have been in the building have marveled at the ghostly nature of how everything looks.

Desks with papers, chairs and staplers; used computers in a storeroom; someone even joked that there was a half-filled cup of coffee sitting on a desk.

It was as if everyone was coming back to work the next day.

Photo by Kevin Hoffman

Computer and office equipment abandoned by the management

of The Mercury in our old building at King and Hanover streets.

But of course, that's not going to happen, not here and not at dozens of local newspapers across the country, where the crisis in local news is being accelerated by private equity firms, like the one that owns The Mercury and the other local papers in Southeast Pennsylvania.

Which brings us to the second of the three.

News that Warren Buffet, who had once seemed like one of the billionaires who might save some of the nation's local newspapers, gave up and sold his chain of papers.

As Julie Reynolds, the remarkable investigative reporter for The Newspaper Guild reported, Warren Buffett’s sold his BH Media newspapers to Lee Enterprises for $140 million. That deal is expected to close in mid-March.

Alden CEO Heath Freeman

Like a shark drawn to blood in the water, "Alden Global Capital, the New York vulture hedge fund gutting Digital First Media newspapers (and owner of The Mercury), has acquired a $9.2 million stake in Lee Enterprises, siphoning money from Alden’s highly profitable and understaffed papers to finance the stock purchase," Reynolds reported.

The purchase was made through one of Alden's shell companies, some of which, Reynolds has discovered, are incorporated in secrecy-friendly Delaware and the Cayman Islands. The methodology hasn't changed and neither will the outcome.

Alden CEO Heath Freeman, Reynold's reported, “intends to engage in discussions” with Lee’s management and/or board of directors about “certain operational and strategic matters, including, but not limited to the recently announced acquisition of Berkshire Hathaway’s newspaper operations and matters pertaining to (Lee’s) 2020 Annual Meeting.”

In other words, like it did when it bought stock in Gannett after it merged with Gateway; and when it purchased Michael Ferro's Tribune Publishing stock after he was forced out, it wants to feed on the corpse.

There is no thought to investing in these papers to make them sustainable and thus sustain the crucial work of local journalism, keeping the powerful accountable. 

The only motive is greed, which is a sad but all-too-familiar mindset in these times. 

Gone is any sense of corporate responsibility to the community its newspapers serve.

Mercury clip files have been abandoned by Mercury management.
Below, former Mercury Editor Nancy March looks through the
clip files for things worth saving.

Which brings us to instance number three, which is likely my final visit to the inside of The Mercury building before renovations begin.

I accepted an invitation to join former Mercury Editor Nancy March to drop in Friday morning.

Like so many others, I went to the desk where I had worked for decades, and found a few things I should not have left behind. 

But taking the seven drawers of files I had accumulated over the years was impractical. And frankly, I ceased to make much use of them even when I was still in

the office.

A greater loss is The Mercury clip files. Back when we had a staff, we had employees who would clip every story in every day's paper. 

Whenever a reporter was assigned a story, the first step was to go to the clip file to get background on the subject.

At least the "bound volumes," physical copies of each edition of the paper found into annual books, have been moved to the company offices at the printing plant in Exton and are being preserved.

But that preservation is only a sliver of the region's history The Mercury has recorded.

As I walked through the newsrooms (we had two locations during my tenure there) and advertising rooms, the publisher's office, the composing room, I could not escape thinking about what is being lost; not only the history of the community, but the history of The Mercury's involvement in that community.

Photo by Kevin Hoffman

Nancy March's old office looked out onto King Street. It can't
have been easy for her to say goodbye one last time.

After the visit, I was covering a visit by Pennsylvania Department of Human Services Teresa Miller to Montgomery County Community College. It began in the North Hall which, I could not resist telling Miller, had once been the Kiwi Shoe Polish factory and was later known as the Nittany Warehouse.

That warehouse was storing dangerous chemicals, and doing it so badly, that former Fire Chief Rich Lengel had told me if it caught fire, he would not allow any firefighters inside because it was too dangerous.

Kevin Hoffman and I climbed up onto the railroad tracks and he took photos through the windows of chemicals leaking out of bins and unclosed containers and that lead to coverage that got the attention of the EPA, who shut the place down.

Now, it's a unique part of the community college and an asset instead of a liability. 

Sure enough, as I looked through the piles of old Mercury editions strewn about the office, I found one of those front pages from 2000 when we helped to expose that danger and get it taken care of, making Pottstown a safer and more vibrant community.

This is the kind of value local journalism brings to a community, the kind that doesn't show up on a quarterly report, the kind Mr. Freeman does not seem to consider as being worth saving.

So as I left the building where I had worked for more than 20 years, and housed the people who chronicled the life of the greater Pottstown area for nearly 90 years, I reflected on the fact that its not just desks, clip files and memories that are being left behind.
 
Also being left behind is the value we place on community, nationally and locally; on having a common set of facts, a common starting point for discussions about what's best for the future, where we go from here.

That is the true loss, one that is only now just being recognized, perhaps too late.

I will be sure to toast its memory in the whiskey bar that replaces it.

Another Sign Local Journalism is on the Ropes

The Reading Eagle building

"The crisis in local news continues unabated," is what I wrote on my Facebook page when the news broke that The Reading Eagle has entered bankruptcy and is actively seeking a buyer.

Although I was less then pleased when the Eagle decided to try to expand their coverage into the Pottstown area a few years ago, just as company that owns The Mercury went through some contractions, in retrospect I think that in many ways it made me a better reporter.

Competition does sharpen one's skills and knowing that I was up against a better-resourced news operation hungry to "steal our lunch," as my former editor used to say, I felt more compelled to jump on stories and make sure we didn't get scooped.

Now that better-resourced competitor has run up against the same economic reality with which The Mercury has been struggling for many years. It does not make me happy.

First, the nation has already lost enough journalists and enough local newspapers and perhaps more than most, I know that Berks County relies heavily on The Eagle.

Secondly, I know a lot of people who work there and they are committed to the same mission I am, keeping their neighbors informed as clearly, accurately, fairly and quickly as they can.

The latest headline in that saga is that the CFO is trying to put together a group of local investors to buy the paper. I pray, for their sake and the sake of Eagle readers, that they are successful.

The alternative, as I know well, can be troubling.

There are not too many buyers out there for local newspapers, which have been weathering economic declines for decades thanks largely to ad revenue being scooped up by Internet giants whose real product is not news coverage but your personal data.

Years ago, as former Mercury photographer Kevin Hoffman used to say repeatedly, newspapers made a mistake by putting their content on websites for free.

Now, a generation of readers that has grown used to that model expects news to continue to be free, particularly if it is online.

And, although it is a little bit like closing the barn door after the horses have all escaped, many newspapers are once again charging for their work product, putting it behind paywalls in a scramble for any revenue they can find.

Whether or not that will work remains to be seen, but readers, ESPECIALLY those on Facebook, are not having it. Many are not only unwilling, but downright outraged that we are trying to get paid for our journalism.

Just last week, the "news deserts," created by the collapse of the local newspaper industry was discovered, a bit too late, by one of the things that helped destroy it.

Associated Press reported  that Facebook "said it has found that 40 percent of Americans live in places where there weren’t enough local news stories to support it."

So Facebook gloms up all the ad revenue that remained on the Internet while using others to provide your content and, susprise!, the content creators go out of business. Who woulda thought?

With revenues in doubt, those willing to buy local papers are often more interested in the assets than in continuing the mission of local journalism -- particularly the real estate.

That was the revelation made in an investigative article by The Washington Post last month headlined: "A hedge fund’s ‘mercenary’ strategy: Buy newspapers, slash jobs, sell the buildings," which looked at Alden Global Capital, the company that owns The Mercury.

The print edition of that story is posted here.

(Full disclosure: I was interviewed for that article and I am quoted within).

Spurring the interest of the Post which -- owned as it is by one of the world's richest men, does not suffer from the same revenue deficits as the rest of us -- was a bid to buy Gannett, one of the nation's largest newspaper chains and publisher of USA Today.

The hedge fund making that bid is Alden Global Capital, which owns The Mercury and has recently re-branded itself from Digital First Meda to MediaNews Group in the wake of a wave of negative press about its business practices.

In addition to The Mercury, Alden owns The Daily Local News in West Chester, The Times-Herald in Norristown, The Reporter in Lansdale, The Delaware County Daily Times, The Trentonian in Trenton, N.J., as well as papers in California, Ohio, Michigan, New York and Colorado, including The Denver Post.

The Denver Post's special editorial section focusing on staff
cuts under ownership by Alden Global Capital.

It was about a year ago that the editorial page at The Denver Post surprised the world by slamming its owners as "vultures" in its own pages for its staff-cutting practices.

Here in Colorado, Alden has embarked on a cynical strategy of constantly reducing the amount and quality of its offerings, while steadily increasing its subscription rates. In doing so, the hedge fund managers — often tellingly referred to as “vulture capitalists” — have hidden behind a narrative that adequately staffed newsrooms and newspapers can no longer survive in the digital marketplace. Try to square that with a recent lawsuit filed by one of Digital First Media’s minority shareholders that claims Alden has pumped hundreds of millions of dollars of its newspaper profits into shaky investments completely unrelated to the business of gathering news.

The News Guild, the national union of which I am a member and shop steward, is currently negotiating with Alden on a new contract after nearly 10 years without raises -- this despite earning what analyst Ken Doctor reported last year are profit margins of $159 million or 17 percent above expenses.

By way of local interest, Doctor's piece, titled "Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon," found that the $11 million Alden made on the Philadelphia-area papers it owns had a profit margin at 30 percent, the highest percentage in the company.

Yay us.

The Mercury building is now for sale.

Doctor's report came out one month before The Mercury closed the doors on its landmark building at High and King streets and put the property up for sale, as it has at dozens of other locations including The Daily Local News and The Times-Herald.

Julie Reynolds, an excellent investigative reporter who works for the News Guild and has uncovered many of Alden's financial legerdemain, wrote about that here.

Flash forward to the New Year and Alden's surprise bid to buy Gannett. Alden, which is a privately held company is a stockholder of 7.5 percent in Gannett which is a publicly held company.

Describing itself without apparent irony as a company "that saves newspapers," Alden argued that it could better manage the chain than the current management.

“Frankly, the team leading Gannett has not demonstrated that it’s capable of effectively running this enterprise as a public company,” said the letter, signed by MNG chairman Joseph Fuchs.

Gannett said the bid was too low, but the latest is that on Wednesday, "MNG Enterprises, also known as Digital First Media, issued a statement that Oaktree Capital Management said in a letter that it 'is highly confident' that the deal could be arranged using at least $1.725 billion in debt financing," USA Today reported.

Alden declined to provide copies of the full letter.

Last month, as the deal became public, the minority leader in the U.S. Senate spoke out about the potential damage to local news posed by Alden's bid.

Chuck Schumer, D-NY, said he is concerned that local newspapers in New York now owned by Gannett would suffer staff cuts if the chain is purchased by Alden Global Capital.

"An analysis of the newspapers owned by Alden reveals they cut newspapers’ staff at

U.S. Sen Chuck Schumer, D-NY

more than twice the rate of competitors, and in all likelihood when they sell the real estate, the vast majority of the money does not go to revitalizing newspapers as the newspaper itself would do when it sells real estate, but goes elsewhere," Schumer said.

"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 (local upstate New York papers) "would be incalculable," said Schumer.

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

On Wednesday, Schumer's colleague, Pennsylvania Democrat Bob Casey was in Pottstown and echoed similar concerns.

He told me he is "concerned about what is happening to local newspapers and how community newspapers are being undermined by corporate interests."

As he travels around the Commonwealth, Casey said he sees evidence everywhere that local papers

U.S. Sen. Bob Casey, D-PA

he has known for years "are cutting staff, making it harder to do public-service journalism."

Tellingly, public service journalism spurred Casey to join his Republican colleague Pat Toomey earlier this month in a joint letter to the Centers for Medicare and Medicaid Services seeking information about the agency’s “special focus facility” program for troubled nursing homes.

Their concerns were prompted, he confirmed, by an investigation into failing nursing homes titled "Still failing the frail."

The investigation was published by PennLive, which most of us grew up knowing as the Harrisburg Patriot-News, whose 24-year-old reporter Sara Gannim won the 2012 Pultizer Prize for Local Reporting for her coverage of the Joe Paterno scandal at Penn State.

Casey told me the kind of investigative reporting that spurred a bi-partisan effort to learn more about nursing home oversight is crucial to keeping government agencies and elected officials accountable.

"But I know that with the staff cuts and corporate mindset these owners have, it's virtually impossible for smaller papers to do this kind of investigative reporting and that is a real concern for all of us," Casey said.

And it's not just the Senate that's worried.

Friday, U.S. Rep. Chrissy Houlahan, D-6th Dist., issued a statement in the wake of the Reading Eagle's bankruptcy announcement.

U.S. Rep. Chrissy Houlahan, D-6th Dist.

“The free press is the bedrock of our democracy, entrusted with holding elected representatives accountable and shedding light on the news and stories concerning the public,” said Houlahan. “The Reading Eagle has served our community for over 150 years," she said. 

"We are facing a crisis in local journalism around the country. Transparency in government and public affairs is something I take seriously, and I understand just how important a local and free press is to that mission," Houlahan said. "Without experienced journalists investigating and searching for truth, our country’s ability to engage in productive debate and successfully progress into the future is hindered.”

Indeed it is.

And it should be a concern for you a well dear reader, because studies have shown that a lack of a local news source not only has an impact on democracy, but also on your wallet.

Without local news around to keep a watchful eye on things, public financing companies have found local governments become more wasteful. As a result, public financing agencies charge higher interest rates for government borrowings for schools, roads and other projects in communities without a local news outlet.

You know who pays for that increased cost. You do.

But the public interest aspect of this business is lost on many owners who fail to realize it is more than a business. It is a public trust.

There are two kinds of newspaper owners, a newspaper company and a company that owns newspapers.

We have too much of the latter and not enough of the former.

A newspaper company -- traditionally a locally owned, often by a family as was the case with the Eagle -- understands the business it is in and understands its responsibility to the community it serves.

Being sustainable, making a profit if possible, serves the purpose.

For a company that owns newspapers, like Alden Global Capital, it is just another product, like the PayLess Shoes chain it ran into bankruptcy, or the Fred's Pharmacy chain it bought and plundered.

Friday, LNP, Lancaster County's locally owned newspaper, made note of what the Eagle's troubles mean for dwindling local ownership.

"Under national media companies, regional newsrooms have been cut and services consolidated as the industry tries to adjust as readers and advertisers migrate online," wrote reporter Chad Umble.

Friday's story about local newspaper ownership in LNP.

Noting that few of the papers surrounding Lancaster enjoy local ownership, Umble wrote "MNG Enterprises, which does business as Digital First Media, offered to buy Gannett Co. for $1.36 billion in January.

Both companies have a record of buying media companies and slashing costs, but Colorado-based Digital First has a reputation for being especially ruthless, according to the Associated Press."

Bankruptcy, which has occurred twice during my time at The Mercury, can often put a paper in a better position, often to be sold, which the Eagle's owners have evidently been trying to do since January.
That is better than the alternative, but not a guarantee of continued publication.

I suppose I'm guilty here of doing what former Pottstown Schools Superintendent Reed Lindley used to call "worshiping the problem."

Newspeople are much better at discovering and outlining a problem than providing possible solutions. that's a characteristic now being turned on its head by a practice called literally "solutions journalism."

I don't know if that is the answer to saving local journalism, or if its more transparency, better use of social media, or crowd-source funding.

Lots of people smarter than me have been trying for years to figure out how to save the function of local journalism, whether it's printed on paper, shows up on your phone or gets beamed into your brain.

Either way, until we figure it out, it's dangerous to lose what we now know works, even if it works imperfectly.

Best of luck to The Eagle.

And to The Eagle's sometimes unappreciative readers, I'll leave you with the wisdom of Joni Mitchell: "Don't it always seem to go that you don't know what you've got till its gone."