What threatens local newspapers now is not just digital disruption or abstract market forces. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." Alden, which owns more than 200 newspapers across the country, has developed a reputation for using extensive layoffs and severe cost cuts at the newspapers it owns. 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. The vulture is hungry again: Alden Global Capital wants to buy a few You need real capital to move the needle, he told me. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. Alden Global Capital, a New York-based hedge fund that this year became the second largest newspaper publisher in the United States, has made an offer to purchase Lee Enterprises, the media company that owns 75 daily newspapers, including the St. Louis Post-Dispatch. When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. If accepted, the $24 per share purchase price would . It is the nations second-largest newspaper owner by circulation. In its bid to acquire Tribune Publishing, the hedge fund Alden Global Capital vowed to provide $375 million in cash to the owner of the Chicago Tribune, the Baltimore Sun and other titles a . It wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. (Freeman denied this characterization through a spokesperson. Have you heard of the hedge fund Alden Global Capital? Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. 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. 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 . For two men who employ thousands of journalists, remarkably little is known about them. 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.. A century later, the Tribune Tower has retained its grandeur. To replace a paper like the Sun would require a large, talented staff that covers not just government, but sports and schools and restaurants and art. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? After all, it has a long and venerable history of supporting local news. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Alden Global Capital Is Killing the Newsroom - Common Dreams Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. With full control of Tribune Publishing, Alden Global Capital is scrambling to squeeze out a return on its $600 million investment in the struggling Chicago-based newspaper company. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. It financed the deal with the help of Cerberusa private-equity firm that owned, among other businesses, the security company that trained Saudi operatives who participated in the murder of the journalist Jamal Khashoggi. A group of 11 community newspapers owned by Red Wing Publishing Co. have been sold to MediaNews Group, owner of the St. Paul Pioneer Press and more than 100 newspapers across the country. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. Now he was feeling the effects of their management. Tampa Bay Times sells printing plant to developer for $21 million But if you really started fucking up in grandiose and belligerent ways, if you started stealing and grifting and lying, eventually somebody would come up behind you and say, Youre grifting and youre lying and theyd put it in the paper., The bad stuff runs for so long now, he went on, that by the time you get to it, institutions are irreparable, or damn near close., Take away the newsroom packed with meddling reporters, and a city loses a crucial layer of accountability. We must finally require the online tech behemoths, such as Google, Apple, and Facebook, to fairly compensate us for our original news content, he told me. Alden Global Looks to Buy Newspaper Publisher Lee Enterprises I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Its not the name or the flag., He may get his wish. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen beforeromance in stone and steel, as one writer described it. 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. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. It . Some have even suggested that this represents Americas last chance to save its local-news industry. It was clear that they didnt care about this being a business in the future. But for all the theatrics, his marching orders were always the same: Cut more. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. 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. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. But a sense of fatalism permeated the work. Alden-owned newspapers have cut their staff at twice the rate of their competitors, for all of Tribune Publishings newspapers, security company that trained Saudi operatives. Alden's holdings already spanned the country, including the . Alden completed its takeover of the Tribune papers in May. Youd be surprised. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. But outside the industry, few seemed to notice. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. Here was one of Americas most storied newspapersa publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizesreduced to a newsroom the size of a Chipotle. The 21st century has seen many of these generational owners flee the industry, to devastating effect. [10] With its acquisition of Tribune Publishing in late May 2021, Alden is collectively the second-largest owner of newspapers in the United States, as calculated by average daily print circulation, second only to Gannett. [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. Some of these papers likely would have been liquidated if the fund had not stepped in to buy them, as Alden's president told Coppins. By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. AP. Live news: US manufacturing sector contracts for fourth straight month Alden Global Capital is buying and gutting local newspapers : NPR - NPR.org He was fired after criticizing Alden in a Washington Post interview. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. The Tribune Company (which owns the newspapers mentioned above) was still turning a profit when Alden bought it, but the hedge fund immediately offered aggressive rounds of buyouts and shrunk its newsrooms in the name of increasing profit margins. The 1% own and operate the . The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. So who is investing with them? But as long as Alden had made back its money, the investment would be a success. Heath hopes the well never runs dry, but hes going to keep pumping until it does. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. But this acquisition was profound, making Alden Global . The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. "[34], In October 2021, The Atlantic examined the impact of Alden's acquisition of the Chicago Tribune, noting that, "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. Or to nearby Monterey, where the former Herald reporter Julie Reynolds says staffers were pushed to stop writing investigative features so they could produce multiple stories a day. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Margaret Sullivan: The Constitution doesnt work without local news. Many in the journalism industry, watching lawsuits play out in Australia and Europe, have held out hope in recent years that Google and Facebook will be compelled to share their advertising revenue with the local outlets whose content populates their platforms. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Hedge fund Alden's bid for owner of Virginian-Pilot, Daily Press And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. All good works, and Knight is to be commended for them. Alden Global Capital has currently bid to buy all of Tribune. Gerry Smith. To be sure, the Knight Foundation does much to help promote and sustain local news. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Hedge fund Alden Global Capital will acquire the rest of what it does not already own of Tribune Publishing, owner of the Chicago Tribune, the New York Daily News and other local newspapers, in a . [15][16] In March 2018, Margaret Sullivan, the media columnist for The Washington Post, called Alden "one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. A search through nonprofit groups publicly available financial reports, commonly known as Form 990s, reveals that all kinds of organizations some surprising have invested their monies with Alden over the years. 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. He stops talking to the press, refuses to be photographed, and rarely appears in public. . It turned out that those ownersNew York hedge funders whom Glidden took to calling the lizard peoplewere laser-focused on increasing the papers profit margins. They want to know who exactly profits when we learn, as Harvard Nieman Lab's Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media . Alden Global Capital is a hedge fund based in Manhattan, New York City. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. At the same time, he increased subscription prices in many markets; it would take awhile for subscribersmany of them older loyalists who didnt carefully track their billsto notice that they were paying more for a worse product. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. Layout design was outsourced to freelancers in the Philippines. After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. | Michael Gray, WIkimedia Commons. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). In recent months, hes been meeting with leaders of local-news start-ups across the countryThe Texas Tribune, the Daily Memphian, The City in New Yorkand collecting best practices. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. 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. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters ability to sort the honest politicians from the political whores by exposing abuses of power. This investment strategy does not come without social consequences. Former Knight-Ridder headquarters. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. At the time, finalternatives.com reported that the Global Distress Opportunities fund would focus on financial firms as well as homebuilding, gaming and auto-related names.. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the countrys most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News. I asked if anyone there at the time was aware of Aldens vulture business strategy. 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.. Senior lenders under the deal were to swap debt for stock. . I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. Inside Alden Global Capital. Feeling burned by the hedge fund, Bainum decided to make a last-minute bid for all of Tribune Publishings newspapers, pledging to line up responsible buyers in each market. When a reporter asked if their work was still valued, the editor sounded deflated. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. This is predatory.. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. Heath Freeman in an undated photo provided by Goldin Solutions . Those that have survived are smaller, weaker, and more vulnerable to acquisition. The Alden Global Capital . The scene was somehow even grimmer than Id imagined. The hollowing-out of the Chicago Tribune was noted in the national press, of course. 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 . [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . Digital First Media - Wikipedia The shadow of hedge fund and corporate ownership leaves newsrooms in A spokesman took issue with the entirety of the story, and laid out a long list of questions attacking the integrity of the reporter, The Atlantic and some of his sources without addressing some of the more specific claims within the report. 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. He had spoken on this issue before, and it was easy to see why. 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. But there was still a sliver of hope: Tribune and Alden agreed that the hedge fund would not increase its stake in the company for at least seven months. The pay was terrible and the work was not glamorous, but Glidden loved his job. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. Research shows that when local newspapers disappear or are dramatically gutted, communities tend to see lower voter turnout, increased polarization, a general erosion of civic engagement and an environment in which misinformation and conspiracy theories can spread more easily. Tribune Sale to Alden Approved by Shareholders - The New York Times 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. Otherwise, youre just peeing in the ocean.. 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. 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. One conclusions even these reporters are hesitant to make is that we are all dealing within a capitalist system which has none, or few, principles to guide itself, apart from making a profit, no matter how. As a young man, hed studied at divinity school before taking over his fathers company, and decades later he still carried a healthy sense of noblesse oblige. These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers A recent Financial Times analysis found that half of all daily newspapers in the U.S. are controlled by financial firms, and Coppins says that number is all but certain to keep growing. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. The show draws from a book written by a Sun reporter, and Simon was quick to point out that the paper still has good journalists covering important stories. You have no way of knowing that if you dont have some nosy son of a bitch asking a lot of questions down there, he told me. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. Alden Global Capital aims to buy Lee Enterprises | The Gazette At one point, he told me, the citys entire civil-service commission was abruptly fired without explanation; his sources told him something fishy was going on, but he knew hed never be able to run down the story. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. These papers would have been liquidated if not for us stepping up.. Iowa's Lee Enterprises seeks help to fight Alden's takeover bid But years later, when Randy relocates to Palm Beach and becomes a major donor to Donald Trumps presidential campaign, it will make a certain amount of sense that his earliest known media investment was conceived as a giant middle finger to the journalistic establishment. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. Hedge fund Alden in hunt for another big newspaper chain - WKMG The firm has a history of purchasing newspapers to cut costs wherever . He wrote, "Alden Global Capital has eliminated the jobs of scores of reporters and editors, and decimated journalism in cities all over the country: Denver, Boston, San Jose, Trenton, etc. 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 . Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Hedge fund known for cutting journalism jobs is seeking to buy - CNN [13], In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. Shares of Lee Enterprises Inc. rose sharply Monday after hedge fund Alden Global Capital LLC offered to buy the newspaper publisher for about $141 million.