Layout design was outsourced to freelancers in the Philippines. The specific shareholder rights plan adopted by the Lee board forbids Alden from purchasing more than 10% of the company, and will be in force for one year. He gained 100 pounds and started grinding his teeth at night. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. 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. Instead, they gutted the place. Nov. 22, 2021. 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. Coordinated by . For those who cared about the future of local news, it was hard to imagine a better outcomewhich made it all the more devastating when the bid fell through. 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 . So what is this Distressed Opportunities fund? The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Freeman was only slightly more accessible. Now he was feeling the effects of their management. 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. Alden completed its takeover of the Tribune papers in May. Like many alumni of the Sun, Simon is steeped in the papers history. The Denver Post has become the face of this struggle, due to an editorial published in its own pages lashing out against owners, New York-based hedge fund Alden Global Capital. Its a hedge that went and bought up some titles that it milks for cash.. 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. It hurts to see the paper like this, he told her. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. By 2011, when Aldens Distressed Opportunities Fund lost more than 20 percent of its value, Knights holdings in the fund were valued at $10.7 million. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. Inside Alden Global Capital. 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 . 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. The hollowing-out of the Chicago Tribune was noted in the national press, of course. Heath Freeman in an undated photo provided by Goldin Solutions . Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. If accepted, the $24 per share purchase price would . and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . 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. 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. As a privately held hedge fund, Alden doesnt have to reveal much to the public. "[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. But there are some clues here and there. 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. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. The firm has a history of purchasing newspapers to cut costs wherever . 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. 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. What threatens local newspapers now is not just digital disruption or abstract market forces. City budgets balloon, along with corruption and dysfunction. Its not the name or the flag., He may get his wish. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. Lee, which owns the St. Louis Post Dispatch, the Omaha World-Herald and many other daily newspapers throughout the region, is staving off a takeover attempt by Alden Global Capital, a New-York . According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. (Freeman denied this characterization through a spokesperson. 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. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. 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. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. It was clear that they didnt care about this being a business in the future. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. These papers would have been liquidated if not for us stepping up.. Vallejo deserves better. A few weeks after the story came out, he was fired. Instead, they gutted the place. 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. On Monday, Dail 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. The question was how. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. 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. Smith began investing in newspapers and media around the same time. 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. 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. In May, the Tribune was acquired by Alden Global Capital, a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. They could be vain, bumbling, even corrupt. 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. 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. But that would require slow, painstaking workand there are easier ways to make money. Margaret Sullivan: The Constitution doesnt work without local news. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. 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. To many, it just didnt seem possible that Alden would instead choose to destroy newspapers by laying off the workforce en masse and stripping papers of all their assets. Alden Global Capital had recently purchased a nearly one-third stake in the Suns parent company, Tribune Publishing, and the firm was signaling that it would soon come for the rest. By the time the FBI caught them, in 2017, the conspiracy had resulted in one dead civilian and a rash of wrongful arrests and convictions. 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 . 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. Hedge fund Alden Global Capital, known for making deep newsroom cuts, won approval to acquire Tribune Publishing, which includes the Chicago Tribune, The Baltimore Sun and New York Daily News. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. [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. but sadly on a global scale there is hardly any independent news sources left currently. 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 . Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. 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 . It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. This was the core of Freemans argument. Ken Kelleher is an American sculptor. The 21st century has seen many of these generational owners flee the industry, to devastating effect. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. 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. 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. A vulture doesnt hold a wounded animals head underwater. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. When it was over, a quarter of the newsroom was gone. hide caption. For two men who employ thousands of journalists, remarkably little is known about them. 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. Alden, which already owned one-third of . The men killing Americas newspapers, how Slack upended the workplace, and the new meth. 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 . Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. 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. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. Smith & Company. Alden Global Capital, the hedge fund that owns the Chicago Tribune and New York Daily News, offered to buy Lee Enterprises Inc. for about $142 million, seeking a larger share of the . The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. On the surface, the answer might seem obvious. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. 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. The papers printing was moved to a plant more than 100 miles outside town, Glidden told me, which meant that the news arriving on subscribers doorsteps each morning was often more than 24 hours old. 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 . 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. A month after he started, one of his fellow reporters left and Glidden was asked to start covering schools in addition to his other responsibilities. 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. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. In a news release Monday, Alden said it sent Lee's board a letter with the offer. My answer is its hard to know. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. No response came back. 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. Aldens calculus was simple. 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. 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. Collectively, they control about one-half of daily newspapers in the U.S. "60 Minutes" correspondent Jon Wertheim did a strong piece that aired Sunday night about the grim state of local newspapers, in part because of how hedge funds, such as Alden Global Capital . I felt like a terrible reporter because I couldnt get to everything.. The 1% own and operate the . I put the question to Freeman, but he declined to answer on the record. 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. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. 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. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Feb. 16, 2021 8:04 PM PT. Who Profits From Alden Global Capital? But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. "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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. He started as a general-assignment reporter, covering local crime and community events. Alden is known for . 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. So I was more than a little shocked to learn that, according to its tax filings, Knight had invested $13 million with Aldens Distressed Opportunities Fund by 2010 and kept investing through 2014. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. This is a subscription-based business.. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. Who is investor Randall Smith and why is he buying up newspaper companies, deep losses to Alden funds overall values, Denver Post newsroom workers invoke Thirst Amendment to raise awareness about conditions under Alden, Pittsburgh newspaper workers are making history, The NewsGuild urges public pension funds to divest from Cerberus, NewsGuild to Lee Shareholders: Reject Aldens Vote No Campaign. A native of Vallejo, he was proud to work for his hometown paper. 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 . NPR reached out to Alden for a response. Alden Global Capital, a hedge fund known for gutting local newsrooms, is seeking to buy Lee Enterprises (LEE), a publicly traded company with a chain of daily newspapers and other publications . Dec 9, 2021. But as long as Alden had made back its money, the investment would be a success. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . "[25], In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today. It played with my mind a little bit, Glidden told me. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . [3] [4] With its acquisition of Tribune Publishing in late . Updated May 21, 2021 at 2:13 PM ET. 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%. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. 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. It makes me profoundly sad to think about what the Trib was, what it is, and what its likely to become, says David Axelrod, who was a reporter at the paper before becoming an adviser to Barack Obama. 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. 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?. As the months passed, things kept getting worse. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. 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.. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? 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. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. Around this time, Randy becomes preoccupied with privacy. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? It was founded in 2007 by Randall D. Smith. One researcher tells me that if that money were invested in the S&P 500 Index Fund, it would have earned roughly $11 million over the same period. Alden's holdings already spanned the country, including the . When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. In budget meetings, according to the former executive, Freeman hectored local publishers, demanding that they produce detailed numbers off the top of their head and then humiliating them when they couldnt. As a reporter who's covered Alden Global Capital for more than two years, people often ask me who are the investors behind the hedge fund that owns one of America's largest newspaper chains?. Since Alden's . The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. 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. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. 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? A century later, the Tribune Tower has retained its grandeur. 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. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige. He says he visited the Tribune's office and was "really shocked by how grim the scene was." 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. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. At the Pioneer Press , where its staff is down to 60, the paper produced a . 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. Media . This investment strategy does not come without social consequences. ", "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? New York hedge fund and U.S. newspaper consolidator Alden Global Capital LLC has made a proposal to take Lee Enterprises Inc. private in a deal that values the company at around $141 million. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy.

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