The Impacts of Hedge Fund Ownership on the Role of Journalism in Democracy through the Lens of Media Management

This study is the first attempt to examine the impacts of hedge fund ownership in the fields of media management and journalism. While the effects of hedge fund ownership have been studied across various industries (Morgenson, G., and J. Rosner. [2023. <i>These Are the Plunderers: How Private Equity Runs—and Wrecks—America</i>. Simon and Schuster.]), they have not been systematically examined in this context. This study was designed based on Drucker’s theoretical ideas (Drucker, P. [2008. “Introduction: Management and Managers Defined; Management as a Social Function and Liberal art; Knowledge is all.” <i>Management</i>, 1–25]) regarding knowledge worker management, and the results should contribute to an extension of the impact of an extreme form of outside ownership and motivation. Prior to the arrival of hedge fund ownership, newspaper companies may have been influenced by outside financial investors (Lacy, S., and A. Blanchard. [2003. “The Impact of Public Ownership, Profits, and Competition on Number of Newsroom Employees and Starting Salaries in mid-Sized Daily Newspapers.” <i>Journalism &amp; Mass Communication Quarterly</i> 80 (4): 949–968.]; Picard, R. G., and A. Van Weezel. [2008. “Capital and Control: Consequences of Different Forms of Newspaper Ownership.” <i>The International Journal on Media Management</i> 10 (1): 22–31.]), but they were never subject to full governance control from outside. Given that hedge funds already own half of the nation’s newspapers in the U.S. (Abernathy, P. M. November, [2023. More than half of U.S. counties have no access or very limited access to local news. Northwestern Medill. https://www.medill.northwestern.edu/news/2023/more-than-half-of-us-counties-have-no-access-or-very-limited-access-to-local-news.html.]), it is time to discuss the impact of outside ownership in the newspaper industry and journalism – specifically, how the owner’s short-term profit return motivations influence media management, such as operational objectives, and organizational social impacts (Drucker, P. [2008. “Introduction: Management and Managers Defined; Management as a Social Function and Liberal art; Knowledge is all.” <i>Management</i>, 1–25]).