'60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter At the Pioneer Press , where its staff is down to 60, the paper produced a . Feb 16, 2021 at 8:05 pm. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. 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. How this 'vulture' hedge fund's gutting of local newsrooms could hurt When it was over, a quarter of the newsroom was gone. In 2011, Paton launched an ambitious initiative he called Project Thunderdome, hiring more than 50 journalists in New York and strategically deploying them to supplement short-staffed local newsrooms. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. Aldens calculus was simple. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper To be sure, the Knight Foundation does much to help promote and sustain local news. After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his fathers death. . Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. 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. The Ubiquity - The student news site of Quartz Hill High School When he did, he exhibited a casual contempt for the journalists who worked there. Youd be surprised. What Alden's potential acquisition of Lee Enterprises means for 20-plus Opinions - Help yourself. Is it ever okay to nick an idea? Since Alden's . Controversial hedge fund Alden Global wins bidding for Chicago Tribune Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. The question was how. He had spoken on this issue before, and it was easy to see why. A Secretive Hedge Fund Is Gutting Newsrooms. 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. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. Alden Global Capital moves to buy Lee Enterprises, owner of the St [4][5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune Publishing and became the second-largest newspaper publisher in the United States. [8][24] Tribune Publishing publishes nine major metropolitan dailies. But that would require slow, painstaking workand there are easier ways to make money. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? Alden Global Capital, the Hedge Fund Killing Newspapers - The Atlantic He stops talking to the press, refuses to be photographed, and rarely appears in public. 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. qhhsubiquity.com Informacin detallada del sitio web y la empresa More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. Hedge fund Alden Global is buying newspaper chain Tribune Publishing - CNN His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. As a privately held hedge fund, Alden doesnt have to reveal much to the public. These papers would have been liquidated if not for us stepping up.. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. 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. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. It seemed reasonable to ask that they answer a few questions. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. The Alden Global Capital . 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. Smith began investing in newspapers and media around the same time. Media . A native of Vallejo, he was proud to work for his hometown paper. Hedge fund Alden's bid to buy Chicago Tribune, other papers approved by 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 . In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. 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. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . Alden Global Capital is a hedge fund based in Manhattan, New York City. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. 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. Instead, the money was used to finance the hedge funds other ventures. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. 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 . 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. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. 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. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! 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 . Alden Global Capital is buying and gutting local newspapers : NPR - NPR.org [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. 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. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. City budgets balloon, along with corruption and dysfunction. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. But for all the theatrics, his marching orders were always the same: Cut more. What threatens local newspapers now is not just digital disruption or abstract market forces. [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. In a news release Monday, Alden said it sent Lee's board a letter with the offer. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Alden gradually took control of the papers that would become DFM. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. (Freeman has, in the past, disputed Bainums account of the negotiations.) Hedge fund Alden in hunt for another big newspaper chain Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. [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. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." The endorsement debate swings around again - Columbia Journalism Review [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. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. Send any friend a story As a subscriber, you . 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. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. Local newsrooms strained by budget-slashing financial firms Tribune shareholders approve takeover by Alden Global Capital Some of these papers likely would have been liquidated if the fund had not stepped in to buy them, as Alden's president told Coppins. The pay was terrible and the work was not glamorous, but Glidden loved his job. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. Alden Global Capital, the New York hedge fund that bought Tribune Publishing this year, said on Monday that it was making an offer for another big American newspaper chain, Lee . It was founded in 2007 by Randall D. 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%. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. But there are some clues here and there. '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. . Of course, its easy to romanticize past eras of journalism. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. 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 . 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. 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. 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. When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. 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 . 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 . Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Prior to the buildings completion, McCormick directed his foreign correspondents to collect fragments of various historical sitesa brick from the Great Wall of China, an emblem from St. Peters Basilicaand send them back to be embedded in the towers facade. 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). 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. 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. Hedge fund Alden Global Capital, one of the country's largest newspaper owners with a reputation for intense cost cuts and layoffs, has offered to buy the local newspaper chain Lee Enterprises for about $141 million. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. 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. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . Read: What we lost when Gannett came to town. It was clear that they didnt care about this being a business in the future. Lee's board of directors . 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 . But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. He can cite decades-old scoops and tell you whom they pissed off. He used his own money to pull court records, and went years without going on a vacation. It was founded in 2007 by Randall D. Smith. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. Feeling burned by the hedge fund, Bainum decided to make a last-minute bid for all of Tribune Publishings newspapers, pledging to line up responsible buyers in each market. 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?. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. Gerry Smith. 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. | Michael Gray, WIkimedia Commons. 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 . The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. Lee Enterprises holds off an Alden takeoverfor now One, the warning shot was fired in 2011, in a Poynter Institute article titled Who is investor Randall Smith and why is he buying up newspaper companies? Randall Smith is the co-founder of Alden, together with his young protg, Heath Freeman, and has been called the grandfather of vulture investing. Vulture funds by definition dont reinvest in their properties they suck them dry. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 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. 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. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. Ken Kelleher - Creative Director / Artist - LinkedIn Alden completed its takeover of the Tribune papers in May. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. 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. 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. Smith & Company. 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. 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. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. 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. 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. 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. Misinformation proliferates. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers 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. Hedge fund known for cutting journalism jobs is seeking to buy - CNN but sadly on a global scale there is hardly any independent news sources left currently. 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. Alden Global Capital makes an offer for Lee Enterprises, a big Today, we know that Knight, CalPERS and others no longer invest with Alden. 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. 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 . 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. Coordinated by . [13], In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. 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 . Alden is known for . Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Aldens commitment to cost-cutting as a badge of honorthe thing that distinguished him from the saps and cowards who made up Americas previous generation of newspaper owners. 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. 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? Convinced that the Sun wont be able to provide the kind of coverage the city needs, he has set out to build a new publication of record from the ground up. The newsroom was moved to a single room rented from the local chamber of commerce. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. He teaches his 8-year-old son, Caleb, to make trades on a Quotron computer, and imparts the value of delayed gratification by reportedly postponing his familys Christmas so that he can use all their available cash to buy stocks at lower prices in December. 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. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? It felt important. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and theyd gotten there by dismantling local journalism. With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the countrys most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News.

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