It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. Who Profits From Alden Global Capital? Heath Freeman in an undated photo provided by Goldin Solutions . Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. It was founded in 2007 by Randall D. Smith. . On . My request for an interview with Smith was dismissed by his spokesperson before I finished asking. 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). On the surface, the answer might seem obvious. But we dont know, because they arent saying. On Monday, Dail The details of how Smith got to know him are opaque, but the resulting loyalty was evident. Spend some time around the shell-shocked journalists at the Tribune these days, and youll hear the same question over and over: How did it come to this? To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. 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 . They are also defined by an obsessive secrecy. It felt important. about two hundred American newspapers. He had spoken on this issue before, and it was easy to see why. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. 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. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. Ken Kelleher is an American sculptor. but sadly on a global scale there is hardly any independent news sources left currently. If you went into a lab to create the perfect bro, Heath would be that creation, says one former executive at an Alden-owned company, who, like others in this story, requested anonymity to speak candidly. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. 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. Prior to the acquisition of the Tribune Company, we purchased substantially all of our newspapers out of bankruptcy or close to liquidation, he told me. Morale tanked; reporters burned out. 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 . 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 . Hedge fund Alden Global Capital is attempting to acquire Davenport-based Lee Enterprises, one of the country's largest newspaper chains, in all the markings of a hostile takeover. But there are some clues here and there. 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. By McKay Coppins. . "[21], shareholder rights plan, colloquially known as a "poison pill", "Alden Global Capital LLC NEW YORK , NY", "Company Overview of Alden Global Capital LLC", "Heath Freeman of Alden Global Capital says he wants to save local news. What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. Aldens calculus was simple. Yes, today, it's a newspaper without a newsroom. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. ", "The most feared owner in American journalism looks set to take some of its greatest assets", "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty', "What does the Chicago Tribune sale mean for the future of newsrooms? 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. The shows premise pits two couples against each other for the chance to win a home. You need real capital to move the needle, he told me. Today, we know that Knight, CalPERS and others no longer invest with Alden. From the March 1914 issue: H. L. Mencken on newspaper morals, A story circulated throughout the companypossibly apocryphal, though no one could say for surethat when Freeman was informed that The Denver Post had won a Pulitzer in 2013, his first response was: Does that come with any money?. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. Below are highlights from his conversation with Morning Edition's A Martnez. Alden is in the business of making money, not journalism. Am I going to win against capitalism in America? 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 . Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. Former Knight-Ridder headquarters. 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. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. 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. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? How do you know who wins? the boy asks. NPR reached out to Alden for a response. 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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Hes acutely aware of the risksI may end up with egg on my face, he saidbut he believes its worth trying to develop a successful model that could be replicated in other markets. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. When the sale failed to attract a sufficiently high offer, Freeman turned his attention to squeezing as much cash out of the newspapers as possible. Alden Global Capital is a hedge fund based in Manhattan, New York City. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. . Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. (Freeman denied this through a spokesperson.) It seemed reasonable to ask that they answer a few questions. Connecting this to the current state of American newspaper ownership seems rather tenuous.. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. If you want to know what its like when Alden Capital buys your local newspaper, you could look to Montgomery County, Pennsylvania, where coverage of local elections in more than a dozen communities falls to a single reporter working out of his attic and emailing questionnaires to candidates. Its not as if the Tribune is just withering on the vine despite the best efforts of the gardeners, Charlie Johnson, a former Metro reporter, told me after the latest round of buyouts this summer. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. October 14, 2021. But that would require slow, painstaking workand there are easier ways to make money. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. Baltimore has always had its problems, he told me. It played with my mind a little bit, Glidden told me. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Hellman and BNP together own 46.4 per cent of Allfunds' shares. If accepted, the $24 per share purchase price would . Scott Olson/Getty Images [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. This is predatory.. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. he asks. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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%. Rapid-fire changes underway at newspapers sold to cost-slashing hedge fund Alden Global Capital have led to a profound case of the jitters at newsrooms like the New York Daily News. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. 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 . After all, it has a long and venerable history of supporting local news. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. 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. My question was did Knight know what Alden was doing to newspapers when it invested with the hedge fund, and does it regret that investment now? 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. By Julie Reynolds. 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. Located in the same Manhattan office building as Alden, it funds stem-cell research, health-related charities, arts and culture and Duke University, alma mater of Smiths protg Heath Freeman. 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. Its hard to imagine theyd show, anyway. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. A native of Vallejo, he was proud to work for his hometown paper. '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. Enter the email address you signed up with and we'll email you a reset link. All good works, and Knight is to be commended for them. I felt like a terrible reporter because I couldnt get to everything.. | Michael Gray, WIkimedia Commons. 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. [10][19][20], The company has its origins in R.D. Smith began investing in newspapers and media around the same time. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. Next up: Chicago, Baltimore, and the New York Daily News. [2] Its managing director is Heath Freeman. But for all the theatrics, his marching orders were always the same: Cut more. 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 . Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. 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. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. John Temple: My newspaper died 10 years ago. Send any friend a story As a subscriber, you . Well, that wasnt the point. 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. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. "[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. 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. Today, half of all daily newspapers in the U.S. are controlled by financial firms, according to an analysis by the Financial Times, and the number is almost certain to grow. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. 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. It was founded in 2007 by Randall D. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. * Edited from 'independent . His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Two days after the deal was finalized, Alden announced an aggressive round of buyouts. 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. Smith. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. 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. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Since they bought their first newspapers a decade ago, no one has been more mercenary or less interested in pretending to care about their publications long-term health. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. 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. A quarter of the newsroom (including many big-name reporters, columnists and photographers) took the buyouts Alden offered, and while some great reporters remain on staff, it's nearly impossible for them to fill those gaps, Coppins says. He gained 100 pounds and started grinding his teeth at night. He stops talking to the press, refuses to be photographed, and rarely appears in public. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. After weeks of back-and-forth, he agreed to a phone call, but only if parts of the conversation could be on background (which is to say, I could use the information generally but not attribute it to him). 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. But this acquisition was profound, making Alden Global . 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. 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 World War II correspondent brought firsthand news of Nazi concentration camps to American readers; its editorial page had the power to make or break political careers in Maryland. The Tampa Bay Times has sold its printing plant at 1301 34th St. N to a real estate arm of Alden Global Capital, a New York hedge fund that is the second-largest newspaper owner in the country. . 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 not the name or the flag., He may get his wish. Smith & Company. This company that owns us now seems to still be prettyI dont even know how to put it, the editor said, according to a recording of the meeting obtained by The Atlantic. My answer is its hard to know. When a reporter asked if their work was still valued, the editor sounded deflated. 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. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. It has figured out how to make a profit by driving newspapers into the ground, he says, since Alden's aim is not to make them into long-term sustainable businesses but rather maximize profits quickly to show it has made a winning investment. 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. It is the nations second-largest newspaper owner by circulation. 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. I put the question to Freeman, but he declined to answer on the record. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. "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?" [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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. 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. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. . This story originally appeared on the Morning Edition live blog. City budgets balloon, along with corruption and dysfunction. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million.

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