Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. City budgets balloon, along with corruption and dysfunction. Why Chicago Tribune Staffers Are Terrified Of Their Hedge Fund - Forbes Alden Global Capital aims to buy Lee Enterprises | The Gazette Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. [3] [4] With its acquisition of Tribune Publishing in late . 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 about $141 million. Craigslist killed the Classified section, Google and Facebook swallowed up the ad market, and a procession of hapless newspaper owners failed to adapt to the digital-media age, making obsolescence inevitable. Maybe this obscure hedge fund had a plan. But this acquisition was profound, making Alden Global . [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. 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. Next up: Chicago, Baltimore, and the New York Daily News. The scene was somehow even grimmer than Id imagined. Its a game, Randy explains to his son. Im worried the worst is yet to come. 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. Now it might be facing extinction. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. They could be vain, bumbling, even corrupt. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. Tampa Bay Times sells printing plant to developer for $21 million Now he was feeling the effects of their management. He says he visited the Tribune's office and was "really shocked by how grim the scene was." And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. For a fleeting moment, Aldens newspapers became unexpected darlings of the journalism industrywritten about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. 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 . 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. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. On more than one occasion, according to people I spoke with, he asked aloud, What do all these people do? According to the former executive, Freeman once suggested in a meeting that Aldens newspapers could get rid of all their full-time reporters and rely entirely on freelancers. 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. 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.. The endorsement debate swings around again - Columbia Journalism Review Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. Before our interview, Id contacted a number of Aldens reporters to find out what they would ask their boss if they ever had the chance. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. 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. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. Like many alumni of the Sun, Simon is steeped in the papers history. Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Aldens commitment to cost-cutting as a badge of honorthe thing that distinguished him from the saps and cowards who made up Americas previous generation of newspaper owners. If Knights total divestment from Alden in 2014 was because someone made an ethical decision to stop dealing with the vulture fund, good for them. AP. Other records turned up from public pension funds and filings of publicly traded companies. Several years later, when Heath was still in his mid-20s, Smith co-founded Alden Global Capital with him, and eventually put him in charge of the firm. Alden Global Looks to Buy Newspaper Publisher Lee Enterprises The California Public Employees Retirement System, a few European banks, and Citigroup and Coca Cola Companys pension funds have all invested in Alden, along with charities such as the Circle of Service Foundation and the Alfred University Endowment. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. My answer is its hard to know. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. When plans for the building were announced in 1922, Colonel Robert R. McCormick, the longtime owner of the Chicago Tribune, said he wanted to erect the worlds most beautiful office building for his beloved newspaper. A vulture doesnt hold a wounded animals head underwater. A Cornell grad with an M.B.A., Randy is on a partner track at Bear Stearns, where hes poised to make a comfortable fortune simply by climbing the ladder. (Freeman denied this through a spokesperson.) But that would require slow, painstaking workand there are easier ways to make money. 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. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. Aldens calculus was simple. Tuesday, 23 November 2021 07:46 PM EST. We were like, Theyre not going to take our newspaper from us! Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. But he says the worst culprit is the hedge fund Alden Global Capital, which bought the Mercury in 2011 and has since sold the paper's building and slashed newsroom staff by about 70%. 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. In Orlando, the Sentinel ran an editorial pleading with the community to deliver us from Alden and comparing the hedge fund to a biblical plague of locusts. In Allentown, Pennsylvania, reporters held reader forums where they tried to instill a sense of urgency about the threat Alden posed to The Morning Call. 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 Global Capital revealed a proposal Monday to purchase Lee Enterprise Inc. and its newspapers at $24 a share, casting alarm through the many newsrooms owned by Lee. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. Denver Post reporters vs 'vulture capitalist' hedge fund Alden - CNBC The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Alden Global Capital makes offer for Lee Enterprises, owner of Winston The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. Hedge fund known for cutting journalism jobs is seeking to buy - CNN , 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Otherwise, youre just peeing in the ocean.. [2] Its managing director is Heath Freeman. Smith & Company. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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. 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. Hellman and BNP together own 46.4 per cent of Allfunds' shares. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Nov. 22, 2021. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . "And what we've seen in a lot of these places where newspapers have been scaled back or even closed is there really is no comparable product in place, whether it's by the government or by another news organization, to do what these local newspapers have done for hundreds of years.". In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldnt manipulate, and the photographer who had produced beautiful portraits of the states undocumented immigrants, and the investigative reporter whod helped expose the governors offshore shell companies. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. This once-proud publication is now owned and run by Alden Global Capital, a multibillion-dollar hedge fund with a long record of buying papers on the cheap, selling off their assets and slashing pay and jobs. Well, that wasnt the point. A native of Vallejo, he was proud to work for his hometown paper. But we dont know, because they arent saying. Who Profits From Alden Global Capital? You'd be surprised. Since Alden's . 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. On . A century later, the Tribune Tower has retained its grandeur. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. Its hard to imagine theyd show, anyway. hide caption. Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. But for Simon, that paper exists entirely in the past. ", "Denver Post Rebels Against Its Hedge-Fund Ownership", "Tribune Says Sale to Alden Wins Approval Amid Confusion Over Key Shareholder's Vote", "Lee Enterprises Shares Jump on Takeover Offer From Alden", "The vulture is hungry again: Alden Global Capital wants to buy a few hundred more newspapers", "Colorado Group Pushes to Buy Embattled Denver Post From New York Hedge Fund", "The battle for Tribune: Inside the campaign to find new owners for a legendary group of newspapers", "Is this strip-mining or journalism? 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. . Heath Freeman in an undated photo provided by Goldin Solutions . Or to Denver, where the Posts staff was cut by two-thirds, evicted from its newsroom, and relocated to a plant in an area with poor air quality, where some employees developed breathing problems. 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. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. In 2011, Paton launched an ambitious initiative he called Project Thunderdome, hiring more than 50 journalists in New York and strategically deploying them to supplement short-staffed local newsrooms. "A lot of cities almost operate with the assumption that there will be at least one local newspaper, in some cases several local newspapers, acting as a check on the authorities," he says. but sadly on a global scale there is hardly any independent news sources left currently. Digital First Media - Wikipedia 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. Hedge Fund Alden in Hunt for Another Big Newspaper Chain Theres little evidence that Alden cares about the sustainability of its newspapers. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 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. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. Read: Local news is dying, and Americans have no idea, From 2015 to 2017, he presided over staff reductions of 36 percent across Aldens newspapers, according to an analysis by the NewsGuild (a union that also represents employees of The Atlantic). NPR's A Martnez talks to McKay Coppins of The Atlantic about how a hedge fund, Alden Global Capital, is buying and then gutting newspapers and the implications for democracy. Yes, today, it's a newspaper without a newsroom. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. 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? The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. He started as a general-assignment reporter, covering local crime and community events. The 5 global Trends in Journalism: 1 We've moved from a world where media organizations were gatekeepers to a world where media still creates the news agenda, but platform companies control access to audiences 2 this move to digital media generally does not generate filter bubbles Instead automated Serendipity + incidental exposure drive people . But as long as Alden had made back its money, the investment would be a success. Hedge fund Alden Global is buying newspaper chain Tribune Publishing What's in the fine print in Alden's offer to takeover Tribune? - The It seemed reasonable to ask that they answer a few questions. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. But in the case of local news, nothing comparable is ready to replace these papers when they die. He can cite decades-old scoops and tell you whom they pissed off. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. | Michael Gray, WIkimedia Commons. 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. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. But there are some clues here and there. Alden completed its takeover of the Tribune papers in May. Module 5- Journalism.pdf - Journalism Modules - The 5 Ws On Monday, Dail One acquaintance tells The Village Voice that hes the kind of guy who divests himself every couple of years to avoid ending up on lists of the worlds richest people. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Newspapers Have Been Struggling And Then Came The Pandemic - Forbes
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