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. 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. Meanwhile, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. G ARY MARX and David Jackson, two veteran investigative reporters at the Chicago Tribune, spent most of last year seeking potential buyers who might save their newspaper from Alden Global Capital . But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. Im worried the worst is yet to come. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. Layout design was outsourced to freelancers in the Philippines. Otherwise, youre just peeing in the ocean.. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. 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. 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 story of Alden Capital begins on the set of a 1960s TV game show called Dream House. 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. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. 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. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? [33], Alden Global Capital's management of American newspapers has been criticized. Its hard to imagine theyd show, anyway. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. [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. If you went into a lab to create the perfect bro, Heath would be that creation, says one former executive at an Alden-owned company, who, like others in this story, requested anonymity to speak candidly. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. A look at Alden Global Capital is the cover story of the latest . But in the case of local news, nothing comparable is ready to replace these papers when they die. Who is investor Randall Smith and why is he buying up newspaper companies, deep losses to Alden funds overall values, Denver Post newsroom workers invoke Thirst Amendment to raise awareness about conditions under Alden, Pittsburgh newspaper workers are making history, The NewsGuild urges public pension funds to divest from Cerberus, NewsGuild to Lee Shareholders: Reject Aldens Vote No Campaign. 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 . The scene was somehow even grimmer than Id imagined. I felt like a terrible reporter because I couldnt get to everything.. 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. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. 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. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . 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. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. 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. ", "The most feared owner in American journalism looks set to take some of its greatest assets", "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty', "What does the Chicago Tribune sale mean for the future of newsrooms? The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. Feb 16, 2021 at 8:05 pm. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. 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. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. When the city-hall reporter left a few months later, he picked up that beat too. One researcher tells me that if that money were invested in the S&P 500 Index Fund, it would have earned roughly $11 million over the same period. Send any friend a story As a subscriber, you . I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. They are also defined by an obsessive secrecy. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. 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. 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? Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. 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 . Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige. 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. 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. Alden completed its takeover of the Tribune papers in May. Ken Kelleher is an American sculptor. "[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. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. This story originally appeared on the Morning Edition live blog. (Freeman denied this characterization through a spokesperson. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. 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. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. Alden Global Capital is a hedge fund based in Manhattan, New York City. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. All good works, and Knight is to be commended for them. The question was how. Next up: Chicago, Baltimore, and the New York Daily News. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. The hollowing-out of the Chicago Tribune was noted in the national press, of course. (Freeman denied this through a spokesperson.) Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Smith began investing in newspapers and media around the same time. The newsroom was moved to a single room rented from the local chamber of commerce. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. 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. It felt important. I asked if anyone there at the time was aware of Aldens vulture business strategy. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. But that's not true for all of them. He can cite decades-old scoops and tell you whom they pissed off. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. 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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Margaret Sullivan: The Constitution doesnt work without local news. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. 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 . For a fleeting moment, Aldens newspapers became unexpected darlings of the journalism industrywritten about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. 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. A vulture doesnt hold a wounded animals head underwater. 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. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! 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. Maybe this obscure hedge fund had a plan. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. "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.". 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?. 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 . By Julie Reynolds. 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. By McKay Coppins. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. At the same time, he increased subscription prices in many markets; it would take awhile for subscribersmany of them older loyalists who didnt carefully track their billsto notice that they were paying more for a worse product. [3] [4] With its acquisition of Tribune Publishing in late . The Tribune Company (which owns the newspapers mentioned above) was still turning a profit when Alden bought it, but the hedge fund immediately offered aggressive rounds of buyouts and shrunk its newsrooms in the name of increasing profit margins. . The 21st century has seen many of these generational owners flee the industry, to devastating effect. It was founded in 2007 by Randall D. Smith. In the past 15 years, more than a quarter of American newspapers have gone out of business. Smith & Company. 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. 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] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . | Michael Gray, WIkimedia Commons. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. [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. Below are highlights from his conversation with Morning Edition's A Martnez. 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. "[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.
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