Japanese tycoon buys Journal Star

BY CLARE HOWARD

Peoria’s only daily newspaper, once family owned, was purchased by a privately held Japanese conglomerate aiming to become a global telecommunications leader.

The sale is expected to close by year-end.

SoftBank, owned by Japanese billionaire Masayoshi Son, 59, bought Fortress Capital that owns New Media Investment Group (GateHouse).  The Peoria Journal Star, Galesburg Register-Mail, Pekin Daily Times, Canton Daily Ledger and Springfield State Journal Register are in the GateHouse newspaper portfolio.

SoftBank has no background in journalism. The acquisition was likely based on revenue, not mission.

That raises concern for foundational journalism in central Illinois.

“When the owner doesn’t care about the mission of a free press,” that’s a problem, said Shannon Duffy, business representative at United Media Guild, the union representing journalists working in the newsroom at the Journal Star and some other GateHouse papers.

The purchase likely was motivated by skyrocketing revenues from Fortress’ subprime lending that can charge up to 38 percent on some loans.

After this acquisition is finalized, if GateHouse becomes a “smoking ruin,” SoftBank still makes money on the deal, Duffy said.

New Media remains publicly traded and subject to SEC regulations. Fortress Investment Group is a huge private equity firm that went public in 2007 just before the financial crisis. Fortress has $70 billion in assets and the acquisition by SoftBank means Fortress goes private, without mandated SEC public disclosures.

Masayoshi Son met with Donald Trump in early December and promised to bring jobs to America. Trump repeatedly expresses his scorn for independent journalism and routinely hurls insults at journalists, calling them the most disgusting and dishonest people in the world.

Contrary to the widely held notion that the Internet undermined newspapers, the actual damage to a free press and newspapers has been corporate ownership, Duffy said.

“To them (corporations), it makes no difference if they own a newspaper or a bottling plant,” he said, noting that it was investigative journalism that revealed the connection between national security advisor Michael Flynn and his extensive conversations before the Trump inauguration with the Russian ambassador to discuss the Obama sanctions.

“Certainly, this acquisition is a cause for concern,” Duffy said. “Many newspapers used to be owned by families but more and more are owned by hedge funds” and that has meant a loss of local reporting on issues ranging from the school board to county board, and what has been eliminated is journalism’s watchdog role on the local level.

Meanwhile, the union representing journalists in the newsroom at the Journal Star received notification almost two days past a deadline established in the contract that the company planned to start negotiations on a new contract. However, according to the existing contract, missing that deadline means the existing contract must be automatically extended for one year.

The sale to SoftBank is expected to be finalized just prior to the start of contract negotiations for reporters and photographers at the Journal Star.

Clare Howard

Clare Howard is the editor of the Community Word. She can be reached at communityword@yahoo.com



Leave a Reply