Somehow the HBO’s fictional drama series Succession (about the Roy family, which controls one of the biggest media and entertainment companies in the world) feels surprisingly relevant right now.

In the series, Logan Roy, the fictional media mogul, tells his son he is a fool when he tries to bring private equity investors into the firm. Is he right? Is there another choice? I am still in the middle of the series, so hard to say. In real life, we know private equity companies now own a big chunk of the U.S. newspaper market.

In her report, The Rise of a New Media Baron (2016), Penelope Muse Abernathy notes the “private equity funds, pension funds, and other investment partnerships have moved quickly to acquire hundreds of distressed papers” — and the trend is continuing. As Bloomberg puts it, New Media Investment Group’s purchase of Gannett “further solidifies the power of private equity firms and hedge funds in the newspaper business.”

New Media is part of the Fortress Investment Group, a private equity company. Alden Global, yet another private equity firm, owns 60 daily newspapers in the United States. The hedge fund Chatham Asset Management is one of the largest shareholders in McClatchy, and the story continues.

There is plenty of evidence that the arrival of private equity has meant hard cost-cutting in media firms. The New Media and Gannett deal is funded by Apollo Global Management — yet another private equity firm — by a bridge loan, which is costly. This means New Media Investment Group has substantially cut costs to pay the loan back. It has been suggested the New Media Investment Group and Gannett deal will create around US$300 million in cost savings — and plenty of that will come from newsrooms.

Private equity firms are not just heavily involved with reorganisation of media sectors in the United States; they are involved in other markets as well. Most recently, it was revealed that German publishing group Axel Springer is on the path of leaving stock markets to become a private company with the help of a private equity firm. According to the Financial Times, more than 20% of the company’s shareholders have agreed to sell their stock to the U.S. private equity group KKR.

Additionally, private equity group BlackRock recently took a US$875 million stake in Authentic Brands, which owns American sports magazine Sports Illustrated among other brands. Finally, don’t forget that in April this year, Univision sold Gizmodo Media Group to private equity group Great Hill Partners.

When commenting on the Gizmodo deal, Christine Schmidt wrote that “it seems depressingly predestined” that one of the early Internet upstarts “which brought bloggy energy to digital media — is now in the hands of a private equity firm that bought it for the spare change.” And, as she points out, “private equity firms don’t exactly have the greatest track record for keeping media organisations alive and well.”

There are some mixed messages where the media market is heading in terms of the deals. PwC notes that while deals in the U.S. media, telecom, and technology sector were at a two-year low in the first quarter of this year, the numbers for the second quarter are up. In the second quarter, there were 159 deals in the media and telecom sectors with a valuation of just under US$37 billion. The consultancy firm notes private equity firms were heavily involved in the deals made on the sector, presenting 46% of the total announced.

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