How private equity kills companies and communities

Today, I’m talking with Megan Greenwell, a former top editor at Wired and Deadspin, about her new book Bad Company: Private Equity and the Death of the American Dream. It comes out on June 10th, and it’s a searing account of how private equity goes far beyond impacting failing businesses and deeply affects and transforms the lives of everyday Americans.

Decoder is very much a show about the systems and frameworks that explain tech, policy, and business, and that means we’ve talked about private equity a number of times on the show. Private equity is everywhere across the business landscape, even though its massive influence on how so many companies operate is pretty hidden from view.

But once you see it, you start to notice it everywhere, and it’s incredibly validating to hear that so many people have had similar experiences with companies managed by private equity. I know this, because it’s in our numbers and the feedback we get here on Decoder — our 2023 episode with lawyer and author Brendan Ballou about his book on private equity, Plunder, is one of our most popular episodes.

Megan’s interest in private equity came from her experience as editor-in-chief of Deadspin, the famous and now-defunct sports and culture website. Deadspin was part of Gawker, and Gawker was taken over by a private equity firm called Great Hill Partners, which began to immediately micromanage Deadspin’s content. That was when Megan first realized that the goals and financial results of a private equity firm were very disconnected from the goals and financial results of the companies it had taken over.

Megan’s book is a deep dive into the private equity industry, as expressed in four parts of the economy: retail, media, housing, and — maybe the most maddening of them all — healthcare. My family has a lot of doctors in it, and I’ve heard so much about how private equity has changed healthcare in the US. You’ll hear Megan connect the dots between the financialization of healthcare and the poor experiences many people have with healthcare today.

We also spent some time talking about the history of private equity, and the throughline from the New York City real estate world that gave birth to Donald Trump all the way to the private equity industry of today. I think you’ll find there is a surprising amount of history here that really does help explain not just how the incentives of finance have come to dominate the American way of life, but also how it’s seeped into the highest levels of the government. Perhaps most surprisingly, you’ll hear Megan take great pains to differentiate private equity from venture capital, which is very different — and with very different problems.

I always really enjoy talking to other editors, especially about something they’re so curious about. Let me know what you think about this one. I suspect you will have a lot to say.

If you’d like to read more on what we talked about in this episode, check out the links below:

_{Questions or comments about this episode? Hit us up at [email protected]. We really do read every email!}