Is the US media layoffs phenomenon the next housing crisis?
Al Jazeera
The media sector’s challenges amplify shadow banks’ toll on the US economy and mirror the 2008 housing crisis.
In the past few months, the media sector in the United States has gone through one of its worst rounds of layoffs in decades, with some voices within the sector even asking if journalism is a viable career path despite surging subscriptions at publications like The New York Times.
Most recently, outlets like Vice and the sports blog Deadspin were decimated in a massive round of job cuts. Vice ended its online publication, and Deadspin laid off its entire editorial team.
These are the latest in a slew of headcount reductions at countless newsrooms around the US over the past decade at the hands of wealthy owners. The latter overwhelming have the backing of some of the biggest private equity and wealth management firms in the US like Apollo Global Management, Fortress Investment Group and Alden Capital, to name a few. These institutions are also called shadow banks.
A surge in private equity investments in media, experts said, has led to decisions that benefit investors but not always the companies and their employees, similar to the 2008 housing crisis and private equity’s ability to flourish during that time.
While the media business is in the spotlight now, it is a microcosm of a bigger challenge across the US economy. What makes it stand out is that it’s been a long and high-profile battle.
