Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . At the Pioneer Press , where its staff is down to 60, the paper produced a . At the time, even savvy media insiders like Martin Langeveld wistfully predicted Alden would keep newspapers future in mind: Smith knows that the only way to win his big bet on the future of newspapers is to turn them into nimble, modern digital news enterprises.. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? This summer, Alden Global Capital acquired Tribune Publishing and its titles, from small community newspapers to major metro titles like its flagship, The Chicago Tribune, and The Baltimore Sun. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Im worried the worst is yet to come. It is the nations second-largest newspaper owner by circulation. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. [2] Its managing director is Heath Freeman. Since Alden's . He started as a general-assignment reporter, covering local crime and community events. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. While some finance reporters noted that Smiths newspaper investments were all losing value, none seemed to notice that Smith and Aldens president Heath Freeman would soon start strip mining their news companies real estate and other assets. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. They want to know who exactly profits when we learn, as Harvard Nieman Labs Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media newspapers. The practical effect of the death of local journalism is that you get what weve had, he told me, which is a halcyon time for corruption and mismanagement and basically misrule.. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in creative destruction, dismantling outmoded businesses to make room for more innovative insurgents. Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers its alienating. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. He declined to meet me in person or to appear on Zoom. A former Sun reporter whose work on the police beat famously led to his creation of The Wire on HBO, Simon told me the paper had suffered for years under a series of blundering corporate ownersand it was only a matter of time before an enterprise as cold-blooded as Alden finally put it out of its misery. Alden currently owns 32%. The Ubiquity - The student news site of Quartz Hill High School I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Alden Global Capital is a hedge fund based in Manhattan, New York City. Randy claims no editorial role in the Press, and his investment in the projectwhich has little chance of producing the kind of return hes accustomed tocould be chalked up to brotherly loyalty. [7][8] Alden's purchase price was $635 million, or $17.25 per share. October 14, 2021. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. I asked Knight about those investments and whether the Foundations officers had any regrets, knowing what we now do about Aldens devastating effect on its own newspapers. Senior lenders under the deal were to swap debt for stock. On the surface, the answer might seem obvious. Otherwise, youre just peeing in the ocean.. But a sense of fatalism permeated the work. A Secretive Hedge Fund Is Gutting Newsrooms. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers web and mobile offerings and increased online ad revenue. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . After college he worked at Hudson Studio, Art Foundry in Niverville, NY . When he did, he exhibited a casual contempt for the journalists who worked there. The one central theme, the Times reports, seems to be that Smith and its web of affiliates are out, first and foremost, for themselves. If this reputation bothers Randy and his colleagues, they dont let on: For a while, according to The Village Voice, his firm proudly hangs a painting of a vulture in its lobby. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. We dont hear from them Theyre, like, nameless, faceless people., In the months that followed, the Sun did not immediately experience the same deep staff cuts that other papers did. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. "[18], Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. He took particular pride in finding novel ways to give away his family fortune, funding child-poverty initiatives in Baltimore and prenatal care for women in Liberia. Those that have survived are smaller, weaker, and more vulnerable to acquisition. Smith began investing in newspapers and media around the same time. "The question is, will local communities decide that this is an important issue, that it's worth saving these newspapers, protecting them from firms like Alden, or will they decide that they don't really care?" The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. That may well be the future of local news, he says. When hed agreed to the interview, Id expected him to say the things he was supposed to saythat the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. When I asked Freeman what he thought was broken about the newspaper industry, he launched into a monologue that was laden with jargon and light on insightsummarizing what has been the conventional wisdom for a decade as though it were Aldens discovery. 'Sobs, gasps, expletives' over latest Denver Post layoffs", "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat", "How Massive Cuts Have Remade The Denver Post", "Newsonomics: By selling to Americas worst newspaper owners, Michael Ferro ushers the vultures into Tribune", "A Secretive Hedge Fund Is Gutting Newsrooms", "Affiliated Media Files for Bankruptcy to Restructure (Update2)", "The shakeup at MediaNews: Why it could be the leadup to a massive newspaper consolidation", "Alden Global Capital to buy Tribune in deal valued at $630 million", "Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover", "Lee Enterprises Board Rejects Alden's Acquisition Offer", "Alden Global Capital takes Lee Enterprises to court over failed board nominations", "Alden Global Capital sues Lee Enterprises after rejected takeover bid", "Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board", "Lee Enterprises shareholders reelect three directors amid hedge fund fight", "Tampa Bay Times sells printing plant to developer for $21 million", "A hedge fund's 'mercenary' strategy: Buy newspapers, slash jobs, sell the buildings", "The hedge fund trying to buy Gannett faces federal probe after investing newspaper workers' pensions in its own funds", https://en.wikipedia.org/w/index.php?title=Alden_Global_Capital&oldid=1130942589, This page was last edited on 1 January 2023, at 19:27. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. One tagline he was considering was Marylands Best Newsroom., When I asked, half in jest, if he planned to raid the Sun to staff up, he responded with a muted grin. What threatens local newspapers now is not just digital disruption or abstract market forces. At the end of last month, Alden Global Capital, a notorious newspaper-owning hedge fund, sought to stake its claim on one of the last newspaper chains it hasn't yet touched: Lee Enterprises, which owns 90 publications across the country.Alden, which currently owns six percent of Lee's stock, sent an unsolicited offer to purchase the newspaper chain for $24 per share. . Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. They are also defined by an obsessive secrecy. The New York-based hedge fund Alden Global Capital - known for slashing its newspapers' budgets to extract escalated profits - won shareholder approval Friday for its $633 million bid to acquire the Tribune Publishing newspaper chain.. It was founded in 2007 by Randall D. Alden Global Capital is a hedge fund based in Manhattan, New York City. Yes, today, it's a newspaper without a newsroom. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. It felt important. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . [13], Newspapers in Alden's portfolio include Chicago Tribune, The Denver Post, the St. Paul Pioneer Press, the Boston Herald, The Mercury News, East Bay Times, The Orange County Register, and Orlando Sentinel. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. As the months passed, things kept getting worse. Hedge fund Alden Global Capital, one of the country's largest newspaper owners with a reputation for intense cost cuts and layoffs, has offered to buy the local newspaper chain Lee Enterprises for . Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. In the face of that setback, Alden said it would turn to the tactic of filing a proxy statement asking the company's shareholders to vote no on board members Mary Junck and Herbert Moloney during the March 2022 board elections. | Michael Gray, WIkimedia Commons. Alden Global Capital, the New York hedge fund that bought Tribune Publishing this year, said on Monday that it was making an offer for another big American newspaper chain, Lee . Alden, which took Chicago-based newspaper chain Tribune Publishing private in May, said it made a proposal to buy Lee for $24 a share in cash, a 30% premium to Friday's closing price for . Plus how Facebook is a hostile foreign power, the engineers daughter, the collapse of music genres, Dostoyevsky, W. G. Sebald, nasty return logistics, and more. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. Well, he told me, they have some very good reporters., This article appears in the November 2021 print edition with the headline The Men Who Are Killing Americas Newspapers., A Secretive Hedge Fund Is Gutting Newsrooms, I Dont Know That I Would Even Call It Meth Anymore, W. G. Sebald Ransacked Jewish Lives for His Fictions. Alden's holdings already spanned the country, including the . In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. The rationale offered by the board was, Consistent with its fiduciary duties, Lees Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Aldens unsolicited proposal to acquire Lee. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. Tuesday, 23 November 2021 07:46 PM EST. Dec 9, 2021. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. By McKay Coppins. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Im repulsed by the incestuous world of New York journalism, he tells New York magazine. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. Coordinated by . [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. But that's not true for all of them. In legal filings, Alden has acknowledged diverting hundreds of millions of dollars from its newspapers into risky bets on commercial real estate, a bankrupt pharmacy chain, and Greek debt bonds. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. Below are highlights from his conversation with Morning Edition's A Martnez. Two veteran journalists from the Chicago Tribune published an op-ed on Sunday challenging one of the paper's principal owners, the New York hedge fund Alden Global Capital. Smith. Alden Global Capital already had a 32% stake in Tribune Publishing, which owns famous names like the Tribune, Daily News, the Hartford Courant and others, and on Tuesday announced it would pay . By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. After a contentious presidential race and amid a still-raging pandemic, there was a limited supply of outrage and sympathy to spare for local reporters. Now it might be facing extinction. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. The model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self. Nov. 22, 2021. The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. Its not the name or the flag., He may get his wish. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Some in the city started to wonder if the paper was even worth saving. A young man named Randall Duncan SmithRandy for shortstands next to his wife, Kathryn, answering quick-fire trivia questions in front of a live studio audience. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. He can cite decades-old scoops and tell you whom they pissed off. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. , From the February 1905 issue: The confessions of a newspaper woman, The papers union hired a PR firm to launch a public-awareness campaign under the banner Save Our Sun and published a letter calling on the Tribune board to sell the paper to local owners. Feb 16, 2021 at 8:05 pm. Convinced that the Sun wont be able to provide the kind of coverage the city needs, he has set out to build a new publication of record from the ground up. The Alden Global Capital . Last week, Alden Global Capital, the hedge fund notorious for slashing costs at its local titles, came down on the No side of the question, with editorial boards at papers that it owns stating that they will no longer endorse candidates for governor, US senator, or president. But he has a big idea: He believes theres serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. But by 2013, despite deep losses to Alden funds overall values in the previous two years, Smith was able to begin buying his now infamous swath of South Florida mansions for $58 million and Freeman was acquiring multi-million-dollar New York condos. As a privately held hedge fund, Alden doesnt have to reveal much to the public. Media . The pitch had a certain romantic appeal to the reporters in the room. But as an organization that believes that quality information is essential for individuals and communities to make their own bestchoices, it was disappointing that the foundation couldnt simply own up to its error in judgment when it came to Alden. And everyone knows its going to run dry.. Alden, a New York City-based firm that has become the grim reaper of American newspapers, had recently increased its stake in Tribune Publishing to 32%making it the largest shareholder of the . He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. But that would require slow, painstaking workand there are easier ways to make money.
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