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Alden Global Capital already had a 32% stake in Tribune Publishing, which owns famous names like the Tribune, Daily News, the Hartford Courant and others, and on Tuesday announced it would pay . In a news release Monday, Alden said it sent Lee's board a letter with the offer. I asked. What happens next? Alden gradually took control of the papers that would become DFM. 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. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. But that's not true for all of them. NPR reached out to Alden for a response. Now he was feeling the effects of their management. "[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. 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. 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. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. So what is this Distressed Opportunities fund? How do you know who wins? the boy asks. but sadly on a global scale there is hardly any independent news sources left currently. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Like many alumni of the Sun, Simon is steeped in the papers history. Hedge fund Alden Global Capital, known for making deep newsroom cuts, won approval to acquire Tribune Publishing, which includes the Chicago Tribune, The Baltimore Sun and New York Daily News. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. Former Knight-Ridder headquarters. 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. Nov. 22, 2021. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. 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. 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. Some in the city started to wonder if the paper was even worth saving. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. Am I going to win against capitalism in America? 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. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. 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? This was the core of Freemans argument. Feb 16, 2021 at 8:05 pm. 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. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. AP. 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. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. One acquaintance tells The Village Voice that hes the kind of guy who divests himself every couple of years to avoid ending up on lists of the worlds richest people. 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 . Morale tanked; reporters burned out. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. To be sure, the Knight Foundation does much to help promote and sustain local news. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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. [7][8] Alden's purchase price was $635 million, or $17.25 per share. So Freeman pivoted. 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. 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. Alden, which took Chicago-based newspaper chain Tribune Publishing private in May, said it made a proposal to buy Lee for $24 a share in cash, a 30% premium to Friday's closing price for . by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. 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. He had spoken on this issue before, and it was easy to see why. 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. 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. Feb. 16, 2021 8:04 PM PT. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. Gerry Smith. 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. But for all the theatrics, his marching orders were always the same: Cut more. Next up: Chicago, Baltimore, and the New York Daily News. He started as a general-assignment reporter, covering local crime and community events. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. Around this time, Randy becomes preoccupied with privacy. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. He used his own money to pull court records, and went years without going on a vacation. Who Profits From Alden Global Capital? 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 began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. 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. ", "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? 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. The 5 global Trends in Journalism: 1 We've moved from a world where media organizations were gatekeepers to a world where media still creates the news agenda, but platform companies control access to audiences 2 this move to digital media generally does not generate filter bubbles Instead automated Serendipity + incidental exposure drive people . [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers web and mobile offerings and increased online ad revenue. 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. In the past 15 years, more than a quarter of American newspapers have gone out of business. And everyone knows its going to run dry.. "Local newspaper brands and operations are the engines that power trusted local news in communities across the United States," Heath Freeman, president of Alden Global Capital, said in a . At the time, even savvy media insiders like Martin Langeveld wistfully predicted Alden would keep newspapers future in mind: Smith knows that the only way to win his big bet on the future of newspapers is to turn them into nimble, modern digital news enterprises.. 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. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. 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. Located in the same Manhattan office building as Alden, it funds stem-cell research, health-related charities, arts and culture and Duke University, alma mater of Smiths protg Heath Freeman. One early article, in the trade publication Poynter, suggested that Aldens interest in the local-news business could be seen as flattering and quoted the owner of The Denver Post as saying he had enormous respect for the firm. 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. Instead, they gutted the place. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. When the city-hall reporter left a few months later, he picked up that beat too. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. On . So who is investing with them? Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. It is the nations second-largest newspaper owner by circulation. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. 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 . I felt like a terrible reporter because I couldnt get to everything.. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Its a game, Randy explains to his son. [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. [33], Alden Global Capital's management of American newspapers has been criticized. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. Vallejo deserves better. A few weeks after the story came out, he was fired. 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 . 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. [10][19][20], The company has its origins in R.D. Smith began investing in newspapers and media around the same time. It hurts to see the paper like this, he told her. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. Alden Global Capital has currently bid to buy all of Tribune. Layout design was outsourced to freelancers in the Philippines. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. 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. "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?" 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. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. 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. Probably not.. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. Scott Olson/Getty Images , From the February 1905 issue: The confessions of a newspaper woman, The papers union hired a PR firm to launch a public-awareness campaign under the banner Save Our Sun and published a letter calling on the Tribune board to sell the paper to local owners. 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. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. 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.. Tuesday, 23 November 2021 07:46 PM EST. Send any friend a story As a subscriber, you . 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. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. Read: What we lost when Gannett came to town. * Edited from 'independent . 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. The Ubiquity - The student news site of Quartz Hill High School 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. 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. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. No response came back. By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. 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. 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? At their worst, they used their papers to maintain oppressive social hierarchies. 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. Freeman never responded.