But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. A native of Vallejo, he was proud to work for his hometown paper. 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. For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. 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. 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. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in creative destruction, dismantling outmoded businesses to make room for more innovative insurgents. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. Fears for future of American journalism as hedge funds flex power Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Send any friend a story As a subscriber, you . Alden Global Capital has currently bid to buy all of Tribune. Coppins notes that there's even some research indicating that city budgets increase as a result, because corruption and dysfunction can take hold without a newspaper to hold powerful people to account. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. 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. Before our interview, Id contacted a number of Aldens reporters to find out what they would ask their boss if they ever had the chance. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. 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. 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. 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. 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?. 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. 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. Dec 9, 2021. Smith began investing in newspapers and media around the same time. [3] [4] With its acquisition of Tribune Publishing in late . Youd be surprised. [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. 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 . In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. He used his own money to pull court records, and went years without going on a vacation. Alden Global Capital makes an offer for Lee Enterprises, a big 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 . (Freeman has, in the past, disputed Bainums account of the negotiations.) So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? 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. 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.). [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. A vulture doesnt hold a wounded animals head underwater. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. Coordinated by . The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. When he did, he exhibited a casual contempt for the journalists who worked there. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. 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. 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. Its a game, Randy explains to his son. '60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. 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. The firm has a history of purchasing newspapers to cut costs wherever . Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. 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. 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. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. Live news: US manufacturing sector contracts for fourth straight month So what is this Distressed Opportunities fund? 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. [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. 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.. 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? [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. It felt important. Alden's holdings already spanned the country, including the . 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 . In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. 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. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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. [33], Alden Global Capital's management of American newspapers has been criticized. When it was over, a quarter of the newsroom was gone. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. 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 Tribune had been profitable when Alden took over. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. How Alden Global Capital will make money owning Tribune Publishing The practical effect of the death of local journalism is that you get what weve had, he told me, which is a halcyon time for corruption and mismanagement and basically misrule.. That gave the journalists at the Sun a brief window to stop the sale from going through. 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Im worried the worst is yet to come. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. You need real capital to move the needle, he told me. 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. Freeman never responded. 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. When the city-hall reporter left a few months later, he picked up that beat too. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Alden Global to buy Tribune Publishing for $630 million - Los Angeles Times 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. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. Feb. 16, 2021 8:04 PM PT. Many in the journalism industry, watching lawsuits play out in Australia and Europe, have held out hope in recent years that Google and Facebook will be compelled to share their advertising revenue with the local outlets whose content populates their platforms. Alden Global Capital makes offer for Lee Enterprises, owner of Winston After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. [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. ", "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? Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. 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. It seemed reasonable to ask that they answer a few questions. 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. 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 . Alden is in the business of making money, not journalism. To be sure, the Knight Foundation does much to help promote and sustain local news. 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 Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. This was the core of Freemans argument. Its hard to imagine theyd show, anyway. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. Alden currently owns 32%. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. It wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. but sadly on a global scale there is hardly any independent news sources left currently. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. Alden-owned newspapers have cut their staff at twice the rate of their competitors, for all of Tribune Publishings newspapers, security company that trained Saudi operatives. 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. Alden Global Capital - Wikipedia Iowa's Lee Enterprises seeks help to fight Alden's takeover bid 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. 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 . [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . Around this time, Randy becomes preoccupied with privacy. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. 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. If accepted, the $24 per share purchase price would . 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. But that would require slow, painstaking workand there are easier ways to make money. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. 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. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . On the surface, the answer might seem obvious. Aldens calculus was simple. 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. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. Instead, the money was used to finance the hedge funds other ventures. The pitch had a certain romantic appeal to the reporters in the room. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. [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. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. But outside the industry, few seemed to notice. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. "[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. Hedge fund Alden's bid for owner of Virginian-Pilot, Daily Press But in the case of local news, nothing comparable is ready to replace these papers when they die. I asked if anyone there at the time was aware of Aldens vulture business strategy. At their worst, they used their papers to maintain oppressive social hierarchies. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. 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. Yes, today, it's a newspaper without a newsroom. By the time the FBI caught them, in 2017, the conspiracy had resulted in one dead civilian and a rash of wrongful arrests and convictions. This summer, Alden Global Capital acquired Tribune Publishing and its titles, from small community newspapers to major metro titles like its flagship, The Chicago Tribune, and The Baltimore Sun. "[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. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . 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. Those that have survived are smaller, weaker, and more vulnerable to acquisition. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. Probably not.. 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. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. 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. But there are some clues here and there. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, 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. But this acquisition was profound, making Alden Global . Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. 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. Read: What we lost when Gannett came to town. 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. But by 2014, it was becoming clear to Aldens executives that Patons approach would be difficult to monetize in the short term, according to people familiar with the firms thinking. The shows premise pits two couples against each other for the chance to win a home. . Tribune shareholders approve takeover by Alden Global Capital But a sense of fatalism permeated the work. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. Collectively, they control about one-half of daily newspapers in the U.S. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 The 1% own and operate the . Alden, which already owned one-third of . 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 . At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. 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 . He can cite decades-old scoops and tell you whom they pissed off. This Is How a Newspaper Dies - POLITICO Magazine MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers 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. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. 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 men killing Americas newspapers, how Slack upended the workplace, and the new meth. This story originally appeared on the Morning Edition live blog. He was fired after criticizing Alden in a Washington Post interview. 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. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. The pay was terrible and the work was not glamorous, but Glidden loved his job. What threatens local newspapers now is not just digital disruption or abstract market forces. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. Gerry Smith. 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.
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