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. What Alden's potential acquisition of Lee Enterprises means for 20-plus The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. You need real capital to move the needle, he told me. Module 5- Journalism.pdf - Journalism Modules - The 5 Ws . But we dont know, because they arent saying. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. All good works, and Knight is to be commended for them. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. 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. Alden Global Capital, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, has proposed purchasing Lee Enterprises, the Iowa-based owner of the Richmond Times-Dispatch and most other major Virginia newspapers, for approximately $144 million, Alden announced Monday. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. 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. [3] [4] With its acquisition of Tribune Publishing in late . The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . 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. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. about two hundred American newspapers. Several years later, when Heath was still in his mid-20s, Smith co-founded Alden Global Capital with him, and eventually put him in charge of the firm. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. Hedge fund Alden in hunt for another big newspaper chain - WKMG 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. 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. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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. Ken Kelleher is an American sculptor. October 14, 2021. This story originally appeared on the Morning Edition live blog. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. Alden Global Capital makes offer for Lee Enterprises, owner of Winston Coppins describes Alden as a specific type of firm: a "vulture hedge fund." Instead, they gutted the place. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. Hedge fund Alden Global is buying newspaper chain Tribune Publishing 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. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. 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. [33], Alden Global Capital's management of American newspapers has been criticized. How Alden Global Capital will make money owning Tribune Publishing But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. When The New York Times profiles him in 1991, it notes that he excels at profiting from other peoples misery and quotes a parade of disgruntled clients and partners. 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. 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. Here was one of Americas most storied newspapersa publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizesreduced to a newsroom the size of a Chipotle. 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 . Theres little evidence that Alden cares about the sustainability of its newspapers. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. What's in the fine print in Alden's offer to takeover Tribune? - The [2] Its managing director is Heath Freeman. He took particular pride in finding novel ways to give away his family fortune, funding child-poverty initiatives in Baltimore and prenatal care for women in Liberia. Lee Enterprises rejects Alden Global Capital's unsolicited proposal 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. 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. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. [8][24] Tribune Publishing publishes nine major metropolitan dailies. He was fired after criticizing Alden in a Washington Post interview. Its not the name or the flag., He may get his wish. Financially, it was a raw deal. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. But Glidden felt sure he knew the real reason: Alden wanted him gone. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. No response came back. Many of the operators were looking at the newspaper business as a local advertising business, he said, and we didnt believe that was the right way to look at it. By the 1980s, this strategy has made Randy luxuriously wealthyvacations in the French Riviera, a family compound outside New York Cityand he has begun to school his children on the wonders of capitalism. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. In the Hyatt meeting, Ted Venetoulis, a former Baltimore politician, advised the reporters to pick a noisy public fight: Set up a war room, circulate petitions, hold events to rally the city against Alden. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. 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. '60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter Billionaires battle for Tribune Publishing | The Economist 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. 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. Alden Global Capital Is Killing the Newsroom - Common Dreams Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. 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. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. I asked. John Temple: My newspaper died 10 years ago. 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? 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. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Smith. But in the case of local news, nothing comparable is ready to replace these papers when they die. 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. Alden Global Capital - Wikipedia Daily News spinoff stirs anxiety after Alden takeover - New York Post You can bypass most soft paywalls with a little CSS knowledge Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. Digital First Media - Wikipedia Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Tuesday, 23 November 2021 07:46 PM EST. Hedge fund Alden Global Capital is attempting to acquire Davenport-based Lee Enterprises, one of the country's largest newspaper chains, in all the markings of a hostile takeover. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. 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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. Lee blocks Alden Global Capital move for more board control - STLPR The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. As a privately held hedge fund, Alden doesnt have to reveal much to the public. Tribune Sale to Alden Approved by Shareholders - The New York Times That may well be the future of local news, he says. Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. 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. 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.. 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. 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. They are also defined by an obsessive secrecy. But as long as Alden had made back its money, the investment would be a success. Send any friend a story As a subscriber, you . On Monday, Dail Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . Coordinated by . 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. This was the core of Freemans argument. In legal filings, Alden has acknowledged diverting hundreds of millions of dollars from its newspapers into risky bets on commercial real estate, a bankrupt pharmacy chain, and Greek debt bonds. 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%. Opinions - Help yourself. Is it ever okay to nick an idea? The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. This Is How a Newspaper Dies - POLITICO Magazine Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Freeman was only slightly more accessible. 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. Instead, the money was used to finance the hedge funds other ventures. Former Knight-Ridder headquarters. "[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. 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.
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