His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Other records turned up from public pension funds and filings of publicly traded companies. 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. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. 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. Morale tanked; reporters burned out. On . Those that have survived are smaller, weaker, and more vulnerable to acquisition. He declined to meet me in person or to appear on Zoom. 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. It financed the deal with the help of Cerberusa private-equity firm that owned, among other businesses, the security company that trained Saudi operatives who participated in the murder of the journalist Jamal Khashoggi. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. All good works, and Knight is to be commended for them. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. Hellman and BNP together own 46.4 per cent of Allfunds' shares. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. 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.. 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. But in the case of local news, nothing comparable is ready to replace these papers when they die. "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.". Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. 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 . At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. 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 . In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. 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. With full control of Tribune Publishing, Alden Global Capital is scrambling to squeeze out a return on its $600 million investment in the struggling Chicago-based newspaper company. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. 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. 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. They are also defined by an obsessive secrecy. Smith began investing in newspapers and media around the same time. Alden gradually took control of the papers that would become DFM. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. Alden completed its takeover of the Tribune papers in May. You need real capital to move the needle, he told me. Instead, they gutted the place. It was clear that they didnt care about this being a business in the future. Freeman would show up at business meetings straight from the gym, clad in athleisure, the executive recalled, and would find excuses to invoke his college-football heroics, saying things like When I played football at Duke, I learned some lessons about leadership. (Freeman was a walk-on placekicker on a team that won no games the year he played.). That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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. By McKay Coppins. This is predatory.. A native of Vallejo, he was proud to work for his hometown paper. It was founded in 2007 by Randall D. Smith. 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. 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. He had spoken on this issue before, and it was easy to see why. But that would require slow, painstaking workand there are easier ways to make money. Aldens calculus was simple. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. Aldens Distressed Opportunities Fund was launched in 2008 and saw astounding success in its first few months, showing returns of more than 30 percent a big rescue for Alden, whose investments in Russia the year before had lost more than 61 percent of their value. 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? Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. You have no way of knowing that if you dont have some nosy son of a bitch asking a lot of questions down there, he told me. Read: What we lost when Gannett came to town. 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. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. The pitch had a certain romantic appeal to the reporters in the room. The newsroom was moved to a single room rented from the local chamber of commerce. 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. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Gerry Smith. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. If accepted, the $24 per share purchase price would . That's because the fund is stepping in to buy and then gut newsrooms across the country. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. During its five-year run with Alden, it seems quite unlikely that no one at Knight knew about the hedge funds slash-and-burn strategy for two reasons. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. 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. It seemed reasonable to ask that they answer a few questions. We were like, Theyre not going to take our newspaper from us! Its hard to imagine theyd show, anyway. For two men who employ thousands of journalists, remarkably little is known about them. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. After all, it has a long and venerable history of supporting local news. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. (Freeman denied this characterization through a spokesperson. But outside the industry, few seemed to notice. That may well be the future of local news, he says. They could be vain, bumbling, even corrupt. about two hundred American newspapers. So Freeman pivoted. Alden Global Capital has currently bid to buy all of Tribune. I asked Knight about those investments and whether the Foundations officers had any regrets, knowing what we now do about Aldens devastating effect on its own newspapers. 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 . 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Alden is known for . After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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. Of course, its easy to romanticize past eras of journalism. 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. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. A century later, the Tribune Tower has retained its grandeur. 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. He says he visited the Tribune's office and was "really shocked by how grim the scene was." Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. October 14, 2021. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. When a reporter asked if their work was still valued, the editor sounded deflated. It is a subsidiary of Alden Global Capital, the New York City hedge fund that backed the purchase of and dramatic cost-cutting at more than 100 newspapers causing more than 1,000 lost jobs. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Freeman was only slightly more accessible. 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. [15][16] In March 2018, Margaret Sullivan, the media columnist for The Washington Post, called Alden "one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism. But whats happening in Chicago is different. Layout design was outsourced to freelancers in the Philippines. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. "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?" . Its not the name or the flag., He may get his wish. 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. 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. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. [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. 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. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. At their worst, they used their papers to maintain oppressive social hierarchies. [7][8] Alden's purchase price was $635 million, or $17.25 per share. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Smith & Company. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. 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.
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