A native of Vallejo, he was proud to work for his hometown paper. 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. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? It is the nations second-largest newspaper owner by circulation. But that would require slow, painstaking workand there are easier ways to make money. Alden Global Capital has currently bid to buy all of Tribune. This all seemed especially relevant considering many Alden/DFM papers were previously part of the Knight-Ridder chain, the family news empire from which the foundation sprang. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. For two men who employ thousands of journalists, remarkably little is known about them. The 21st century has seen many of these generational owners flee the industry, to devastating effect. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. 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. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. Alden currently owns 32%. Controversial hedge fund Alden Global wins bidding for Chicago Tribune The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. 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. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. But this acquisition was profound, making Alden Global . Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers So who is investing with them? [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. "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.". MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Knight spokesman Andrew Sherry declined to answer any of those questions, saying instead, Our endowment investments support our grantmaking., We invested approximately one half of one percent of our endowment in an Alden fund between late 2009 and early 2014, he said via email. But we dont know, because they arent saying. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. We dont hear from them Theyre, like, nameless, faceless people., In the months that followed, the Sun did not immediately experience the same deep staff cuts that other papers did. 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 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. Of course, its easy to romanticize past eras of journalism. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. Enter the email address you signed up with and we'll email you a reset link. A century later, the Tribune Tower has retained its grandeur. To find the papers current headquarters one afternoon in late June, I took a cab across town to an industrial block west of the river. 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. [33], Alden Global Capital's management of American newspapers has been criticized. Am I going to win against capitalism in America? 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. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. 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 Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . A look at Alden Global Capital is the cover story of the latest . [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . It was clear that they didnt care about this being a business in the future. 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 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?" How Alden Global Capital will make money owning Tribune Publishing At the Pioneer Press , where its staff is down to 60, the paper produced a . Alden Global Capital is a hedge fund based in Manhattan, New York City. 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 . When the city-hall reporter left a few months later, he picked up that beat too. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. 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. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. They could be vain, bumbling, even corrupt. Layout design was outsourced to freelancers in the Philippines. He says he visited the Tribune's office and was "really shocked by how grim the scene was." 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. But beneath all the recriminations and infighting was a cruel reality: When faced with the likely decimation of the countrys largest local newspapers, most Americans didnt seem to care very much. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. 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. 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. He had spoken on this issue before, and it was easy to see why. Now he was feeling the effects of their management. 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 . The 1% own and operate the . 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 . But by 2014, it was becoming clear to Aldens executives that Patons approach would be difficult to monetize in the short term, according to people familiar with the firms thinking. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Hedge fund Alden Global is buying newspaper chain Tribune Publishing - CNN But there are some clues here and there. Alden Global Capital aims to buy Lee Enterprises | The Gazette Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. Senior lenders under the deal were to swap debt for stock. As a privately held hedge fund, Alden doesnt have to reveal much to the public. Hellman and BNP together own 46.4 per cent of Allfunds' shares. That may well be the future of local news, he says. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Instead, they gutted the place. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Pioneer Press owner buys 11 more Minnesota papers - Star Tribune 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.. 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. He started as a general-assignment reporter, covering local crime and community events. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. 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. 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. Alden Global Capital Is Killing the Newsroom - Common Dreams Feb. 16, 2021 8:04 PM PT. 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. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. They are also defined by an obsessive secrecy. 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. 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. Lee's board of directors . 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. And everyone knows its going to run dry.. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. Dec 9, 2021. [13], Newspapers in Alden's portfolio include Chicago Tribune, The Denver Post, the St. Paul Pioneer Press, the Boston Herald, The Mercury News, East Bay Times, The Orange County Register, and Orlando Sentinel. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. "[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. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. Instead, the money was used to finance the hedge funds other ventures. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. Alden Global Looks to Buy Newspaper Publisher Lee Enterprises The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. (Freeman denied this through a spokesperson.) 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. On . . To be sure, the Knight Foundation does much to help promote and sustain local news. Live news: US manufacturing sector contracts for fourth straight month When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. Alden is in the business of making money, not journalism. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. I asked. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. One early article, in the trade publication Poynter, suggested that Aldens interest in the local-news business could be seen as flattering and quoted the owner of The Denver Post as saying he had enormous respect for the firm.