Mark Hauser Explain Why Private Equity Firms are Buying Newspapers
According to Mark Hauser the newspaper industry has seen a significant decline since 2005. Researchers estimate that about 2,200 newspapers have gone out of business in the last six years. Most of these newspapers were located in small and rural communities. But it’s not just these little weeklies struggling to survive. Many longer-time newspapers are also feeling the pinch, in part because of the involvement of private equity firms.
Mark Hauser, founder and managing partner at Hauser Private Equity explains that while sometimes private equity firms can be beneficial for struggling news organizations, they have some negative effects. Mark Hauser talks about this problem on his podcast. For example, most newspapers are privately held companies, which means private equity firms may be able to purchase them relatively easily.
Once they take over, they may find ways to increase revenue and cut costs. While this strategy might make sense on paper, it’s less clear how well it will work. In this new era, businesses need to be mindful that while private equity firms can be great for a struggling company, there might be negative consequences. It all comes down to proper planning — if done properly, an investment from a private equity firm could revitalize an organization or bring it into profitability. If, however, the plan is wrong or poorly executed, it could result in layoffs and worse.
The Current State of Newspapers A recent study by Pew Research Center reports that while read circulation has been declining over the last decade, weekday newspaper circulation in 2020 will be 24.3 million, slightly higher than in 2016 when it was 23.3 million.
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