Gerry Smith. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. 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. Maybe this obscure hedge fund had a plan. 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. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. He can cite decades-old scoops and tell you whom they pissed off. 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. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. 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. [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. 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. In the past 15 years, more than a quarter of American newspapers have gone out of business. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. When a reporter asked if their work was still valued, the editor sounded deflated. The papers printing was moved to a plant more than 100 miles outside town, Glidden told me, which meant that the news arriving on subscribers doorsteps each morning was often more than 24 hours old. At their worst, they used their papers to maintain oppressive social hierarchies. 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 . At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. 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. I asked if anyone there at the time was aware of Aldens vulture business strategy. City budgets balloon, along with corruption and dysfunction. Like many alumni of the Sun, Simon is steeped in the papers history. Margaret Sullivan: The Constitution doesnt work without local news. What threatens local newspapers now is not just digital disruption or abstract market forces. . , 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. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Lee's board of directors . In recent months, hes been meeting with leaders of local-news start-ups across the countryThe Texas Tribune, the Daily Memphian, The City in New Yorkand collecting best practices. 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. It seemed reasonable to ask that they answer a few questions. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. 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. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. 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. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. 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. Tuesday, 23 November 2021 07:46 PM EST. 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 . 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.. Senior lenders under the deal were to swap debt for stock. It has not, however, retained the Chicago Tribune. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. A century later, the Tribune Tower has retained its grandeur. The shows premise pits two couples against each other for the chance to win a home. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Alden gradually took control of the papers that would become DFM. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. On the surface, the answer might seem obvious. By Julie Reynolds. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. But Glidden felt sure he knew the real reason: Alden wanted him gone. | Michael Gray, WIkimedia Commons. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. 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. Inside Alden Global Capital. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. 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. ", "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? Already the largest shareholder . Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. "[21], shareholder rights plan, colloquially known as a "poison pill", "Alden Global Capital LLC NEW YORK , NY", "Company Overview of Alden Global Capital LLC", "Heath Freeman of Alden Global Capital says he wants to save local news. Heath hopes the well never runs dry, but hes going to keep pumping until it does. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. So who is investing with them? So Freeman pivoted. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. 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. That's because the fund is stepping in to buy and then gut newsrooms across the country. While some finance reporters noted that Smiths newspaper investments were all losing value, none seemed to notice that Smith and Aldens president Heath Freeman would soon start strip mining their news companies real estate and other assets. 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. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. I put the question to Freeman, but he declined to answer on the record. Read: Local news is dying, and Americans have no idea, From 2015 to 2017, he presided over staff reductions of 36 percent across Aldens newspapers, according to an analysis by the NewsGuild (a union that also represents employees of The Atlantic). If accepted, the $24 per share purchase price would . 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 audio for this interview was produced by Ryan Benk and edited by Scott Saloway. 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. Alden currently owns 32%. . They are also defined by an obsessive secrecy. This is predatory.. 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. Its a game, Randy explains to his son. [27] The Alden lawsuit asserts that the members of the Lee board "have every reason to maintain the status quo and their lucrative corporate positions" and that they are "focused more on [their] own power than what's best for the company. 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. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. On . 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. In a news release Monday, Alden said it sent Lee's board a letter with the offer. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. The one central theme, the Times reports, seems to be that Smith and its web of affiliates are out, first and foremost, for themselves. If this reputation bothers Randy and his colleagues, they dont let on: For a while, according to The Village Voice, his firm proudly hangs a painting of a vulture in its lobby. 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. 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. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. [7][8] Alden's purchase price was $635 million, or $17.25 per share. [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. The hollowing-out of the Chicago Tribune was noted in the national press, of course. 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?. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. The Tampa Bay Times has sold its printing plant at 1301 34th St. N to a real estate arm of Alden Global Capital, a New York hedge fund that is the second-largest newspaper owner in the country. This investment strategy does not come without social consequences. 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. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. Feb 16, 2021 at 8:05 pm. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. A Secretive Hedge Fund Is Gutting Newsrooms. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. The pay was terrible and the work was not glamorous, but Glidden loved his job. Have you heard of the hedge fund Alden Global Capital? Theres little evidence that Alden cares about the sustainability of its newspapers. 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. 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. They could be vain, bumbling, even corrupt. The 21st century has seen many of these generational owners flee the industry, to devastating effect. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. 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. he asks. 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?. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. That may well be the future of local news, he says. 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. This story originally appeared on the Morning Edition live blog. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. For two men who employ thousands of journalists, remarkably little is known about them. [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. 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 . 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. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. Alden, which already owned one-third of . After all, it has a long and venerable history of supporting local news. By McKay Coppins. 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. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. Those that have survived are smaller, weaker, and more vulnerable to acquisition. 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 . "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 . Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. At the time, finalternatives.com reported that the Global Distress Opportunities fund would focus on financial firms as well as homebuilding, gaming and auto-related names.. 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.
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