Google Has Maimed Texas Press, New Report Says

Newspapers across Texas are struggling, according to a new report.
Jim Schutze
Newspapers across Texas are struggling, according to a new report.
Over the last decade and a half, the American press has been bloodied and battered, pushed to the end of its rope by vulture capitalism, evolving technology and economic shocks like the 2008 housing crisis. There was a time when it was hard to own a newspaper and not make money. Now the opposite is true, especially in Texas.

Across the state and particularly in rural areas, newspapers have shut down at a tremendous clip in recent years, according to a new study from the Save Journalism Project.

Over the last 15 years, 194 newspapers have ceased operation in Texas, according to the report. Rural communities have been hardest hit by the closures — 180 of the papers that no longer exist were weeklies serving small towns.

When rural areas lose papers, news deserts, as the study calls them, swallow them up. As Beto O'Rourke could readily tell you, Texas has 254 counties. Twenty-one of them have no local newspaper.

"One of them is Hartley County, located in North Texas and is larger than the state of Rhode Island," the study says. "Hartley County is in Texas’ 13th Congressional district, which is represented by Rep. Mac Thornberry. The 13th Congressional district is the second largest in Texas and is bigger than 13 entire states. It also is one of the least served local news jurisdictions in America. In addition to Hartley County, four other counties — Collingsworth, Hall, Kent and Motley — have no local newspaper."

Many of the journalism industry's struggles in Texas, the report says, can be chalked up to two things: private equity firms and Google.

"Part of the reason that we chose Texas to highlight in the report," said John Stanton, laid-off former Washington, D.C., bureau chief of BuzzFeed and co-founder of the Save Journalism Project, "is that (Google) is now being investigated by state attorneys general for their monopolistic activities. One of the lead attorneys general is Ken Paxton, who's taken the issue up. We think it's important that folks in Texas understand the influence that (Google's) had and the impact that they've had on the news industry within the state."

Google, Stanton said Friday, is able to control both ad revenue and traffic for media companies.

"Over the last seven years, news publishers saw their profits decline by about 50%, to a combined $14.3 billion." — John Stanton

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"It gives them a huge advantage and that power has a direct impact on (the news business). Over the last seven years, news publishers saw their profits decline by about 50%, to a combined $14.3 billion," he said. "Google, their profits tripled over that same period to $116.3 billion. While that includes a lot of things other than the news business, it's a clear indication that they're reaping the benefits of their control and their monopoly of the ad space and making it harder and harder (for news organizations) to pay journalists."

When Google says jump — as it did when it forced providers to adopt its Accelerated Mobile Pages standard, which strips ads and helps pages load faster — newspapers are forced to respond "How high?" or else see their search rankings tank, according to the report.

The company also changed its incognito web browsing mode in 2019 in order to get around paywalls set up by media companies. In 2021, Google will ban third-party cookies from Chrome, further limiting news organizations' ability to profit from ads.

In order to level the playing field, the Save Journalism Project argues, Google must be busted up so it can't leverage its ubiquitous browser, Chrome, and its dominant positions in the web search and ad industry.

"We think it is absolutely essential that Attorney General Paxton and the other state attorneys general who are examining Google for possible antitrust violations examine the role that Chrome has in the competition for ad revenue that Google is in with news publishers in Texas and around the country," said Ken Gude, policy director of the Save Journalism Project.

To highlight the issues private equities can create for journalists, the report looks at GateHouse Media, which has acquired newspapers across the country and recently purchased Gannett, another large publisher.

From the report:

"GateHouse is owned by the New Media Investment Group, which is managed by the hedge fund Fortress Investment Group, which itself is owned by SoftBank. SoftBank is a Japanese investment company headquartered in Tokyo, recently making headlines for its $1.5 billion bailout of WeWork. The Gannett acquisition added dailies in El Paso, Corpus Christi, San Angelo, Wichita Falls and Abilene to those GateHouse already owned in Austin, Lubbock, Sherman, Amarillo, Stephenville, Brownwood and Waxahachie. Tokyo is a long way from Amarillo.

"Even before it bought Gannett, GateHouse was criticized by local Texas reporters for 'gutting' the newspapers it owns. Texas Monthly reported that the GateHouse-owned Amarillo Globe News was down to just one reporter covering a community of 200,000 people."
The report highlights the nonprofit Texas Tribune as a rare bright spot in Lone Star journalism, but even that designation comes with caveat.

"That Texas’ only growing news publication is a nonprofit (underscores) the extent that Google and other tech giants have destroyed the business model that used to sustain high-quality local journalism, with profits flowing to Silicon Valley rather than local community newspapers," the report concludes. "That has been a signal for Wall Street and foreign investors to sweep in and make a tidy profit off the collapse of local newspapers across Texas, leaving hundreds of thousands of Texans little or no local news coverage."