When a reporter asked if their work was still valued, the editor sounded deflated. . 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. 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. . And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. He used his own money to pull court records, and went years without going on a vacation. Some people believe that local newspapers will eventually be replaced by new publications, which Coppins describes as "built from the ground-up for the digital era." 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. Hedge fund Alden Global is buying newspaper chain Tribune Publishing - CNN To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. Tribune Sale to Alden Approved by Shareholders - The New York Times Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. 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.. Already the largest shareholder . A vulture doesnt hold a wounded animals head underwater. Controversial hedge fund Alden Global wins bidding for Chicago Tribune Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. Inside Alden Global Capital. They were very tight. Freeman has resisted elaborating on his relationship with Smith, saying simply that they were family friends before going into business together. 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. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. 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. Alden Global Capital has currently bid to buy all of Tribune. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. [8][24] Tribune Publishing publishes nine major metropolitan dailies. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. 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.. Denver Post reporters vs 'vulture capitalist' hedge fund Alden - CNBC Opinions - Help yourself. Is it ever okay to nick an idea? Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. 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. 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. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. 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 . So who is investing with them? But whats happening in Chicago is different. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. To be sure, the Knight Foundation does much to help promote and sustain local news. Alden Global Capital makes an offer for Lee Enterprises, a big Misinformation proliferates. The 21st century has seen many of these generational owners flee the industry, to devastating effect. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. [2] Its managing director is Heath Freeman. 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. 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. Instead, the money was used to finance the hedge funds other ventures. After all, it has a long and venerable history of supporting local news. Former Knight-Ridder headquarters. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. Im worried the worst is yet to come. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. 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 . Gerry Smith. 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. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. But for Simon, that paper exists entirely in the past. 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. hide caption. [3] [4] With its acquisition of Tribune Publishing in late . But that's not true for all of them. So far, Alden has limited its closures primarily to weekly newspapers, but Doctor argues its only a matter of time before the firm starts shutting down its dailies as well. The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. Financially, it was a raw deal. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. The 1% own and operate the . Around this time, Randy becomes preoccupied with privacy. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. But Glidden felt sure he knew the real reason: Alden wanted him gone. [33], Alden Global Capital's management of American newspapers has been criticized. [7][8] Alden's purchase price was $635 million, or $17.25 per share. Billionaires battle for Tribune Publishing | The Economist 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.. 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. 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. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune The shadow of hedge fund and corporate ownership leaves newsrooms in 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. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. 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. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. It played with my mind a little bit, Glidden told me. Freeman never responded. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. Freeman was only slightly more accessible. Have you heard of the hedge fund Alden Global Capital? Read: What we lost when Gannett came to town. "[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. It emphasizes supporting the emergence of new, sustainable models for local news, through both grantmaking and research, Sherry told me, including grant programs for nonprofit news organizations. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. 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. For two men who employ thousands of journalists, remarkably little is known about them. But this acquisition was profound, making Alden Global . 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. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. When he did, he exhibited a casual contempt for the journalists who worked there. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. ", "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? '60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. It was founded in 2007 by Randall D. Smith. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. A young man named Randall Duncan SmithRandy for shortstands next to his wife, Kathryn, answering quick-fire trivia questions in front of a live studio audience. Daily News spinoff stirs anxiety after Alden takeover - New York Post John Temple: My newspaper died 10 years ago. 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 . Alden Global Capital Is Killing the Newsroom - Common Dreams Now he was feeling the effects of their management. he asks. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. 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. 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. but sadly on a global scale there is hardly any independent news sources left currently. Alden is in the business of making money, not journalism. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . The firm has a history of purchasing newspapers to cut costs wherever . The pay was terrible and the work was not glamorous, but Glidden loved his job. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . . Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. 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. A century later, the Tribune Tower has retained its grandeur. As a reporter whos 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 Americas largest newspaper chains? Alden Launches $142 Million Bid for Publisher Lee Enterprises Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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. 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 him, its the same as oil, the publisher said. He had spoken on this issue before, and it was easy to see why. Its a game, Randy explains to his son. 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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. 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. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. No response came back. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. He stops talking to the press, refuses to be photographed, and rarely appears in public. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. What happens next? Fears for future of American journalism as hedge funds flex power If accepted, the $24 per share purchase price would . I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. 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. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Those that have survived are smaller, weaker, and more vulnerable to acquisition. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. 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. My answer is its hard to know. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. 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. Alden currently owns 32%. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. By McKay Coppins. Live news: US manufacturing sector contracts for fourth straight month A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. . The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Well, he told me, they have some very good reporters., This article appears in the November 2021 print edition with the headline The Men Who Are Killing Americas Newspapers., A Secretive Hedge Fund Is Gutting Newsrooms, I Dont Know That I Would Even Call It Meth Anymore, W. G. Sebald Ransacked Jewish Lives for His Fictions. Lee blocks Alden Global Capital move for more board control - STLPR But there are some clues here and there. Heath Freeman in an undated photo provided by Goldin Solutions . He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. On the surface, the answer might seem obvious. Alden Global Capital is a hedge fund based in Manhattan, New York City. He can cite decades-old scoops and tell you whom they pissed off. 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. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. 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. 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. They are also defined by an obsessive secrecy. 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. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. 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. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. For Baltimore to avoid a similar fate, Simon told me, something new would have to come alonga spiritual heir to the Sun: A newspaper is its contents and the people who make it. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. We were like, Theyre not going to take our newspaper from us! 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. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. 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. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. 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. 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. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. As the months passed, things kept getting worse. Hedge fund known for cutting journalism jobs is seeking to buy - CNN But a sense of fatalism permeated the work. Updated May 21, 2021 at 2:13 PM ET. In the past 15 years, more than a quarter of American newspapers have gone out of business. 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?.

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