An Open IPO Window Will Save Investigative Journalism

Byrne Hobart
6 min readJul 5, 2019

In 2016, Mother Jones published an explosive account of what it’s like to work as a private prison guard. It was a classic piece of investigative journalism: four months of full-time under-cover work, leading to a polished, incisive piece that combined a smart 35,000 foot-view with plenty of harrowing on-the-ground detail.

It had a major impact, too: within months, the Justice Department announced that it would no longer contract with private prisons. (A move the current administration rescinded.)

This, you might think, is what journalism is for. But it’s certainly not what media companies are paid for. Per the editor:

Wow, a -6,900% profit margin! Series A, here we come!

OK, that was a cheap shot, but there is a financial angle here. Investigative journalism generally doesn’t pay very well. As media companies have lost their monopolistic traits and faced more market competition — as social media and search have unbundled them from a single publication into articles that get mixed into the Content Casserole — investigative journalism, with its subpar unit economics, has declined.

It doesn’t help that companies targeted by investigative journalists have sued. Your typical budget-conscious media outlet owner is not especially interested in paying endless legal fees to avoid seven-figure judgments. (Especially when, as happened in the ABC/Food Lion case, the trial reveals that the story was partially the result of selective editing, and that the journalists involved actively encouraged the behavior they were trying to draw attention to.)

Despite the financial pressures, there’s one kind of investigative journalism that’s thriving. Let’s return to that private prison story. Here’s a chart of Geo Group, a large operator of private prisons, from June through September, 2016:

Pop quiz: can you identify when the private prison ban was announced?

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Byrne Hobart

I write about technology (more logos than techne) and economics. Newsletter: https://diff.substack.com/