Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. 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. 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. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. What happens next? 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. That gave the journalists at the Sun a brief window to stop the sale from going through. 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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. Updated May 21, 2021 at 2:13 PM ET. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. 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. Of course, its easy to romanticize past eras of journalism. Instead, the money was used to finance the hedge funds other ventures. [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. ", "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? As a privately held hedge fund, Alden doesnt have to reveal much to the public. The 1% own and operate the . Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. But years later, when Randy relocates to Palm Beach and becomes a major donor to Donald Trumps presidential campaign, it will make a certain amount of sense that his earliest known media investment was conceived as a giant middle finger to the journalistic establishment. 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. Nov. 22, 2021. A century later, the Tribune Tower has retained its grandeur. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Enter the email address you signed up with and we'll email you a reset link. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. (Freeman has, in the past, disputed Bainums account of the negotiations.) 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.. 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. about two hundred American newspapers. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. He was fired after criticizing Alden in a Washington Post interview. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. Scott Olson/Getty Images The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. Misinformation proliferates. 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. but sadly on a global scale there is hardly any independent news sources left currently. 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. 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. "[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. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. 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. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. 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 . A Secretive Hedge Fund Is Gutting Newsrooms. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. 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. Around this time, Randy becomes preoccupied with privacy. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. Instead, they gutted the place. The Alden Global Capital . 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 even for a group of journalists, it was tough to keep the publics attention. 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. 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. 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%. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. 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 . The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. 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. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. 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 . Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? He used his own money to pull court records, and went years without going on a vacation. 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. But this acquisition was profound, making Alden Global . In a news release Monday, Alden said it sent Lee's board a letter with the offer. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. It hurts to see the paper like this, he told her. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. [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. [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. ", "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? [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. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. 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. When the city-hall reporter left a few months later, he picked up that beat too. Ken Kelleher is an American sculptor. When it was over, a quarter of the newsroom was gone. To be sure, the Knight Foundation does much to help promote and sustain local news. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. The scene was somehow even grimmer than Id imagined. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. Lee, which owns the St. Louis Post Dispatch, the Omaha World-Herald and many other daily newspapers throughout the region, is staving off a takeover attempt by Alden Global Capital, a New-York . 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. Below are highlights from his conversation with Morning Edition's A Martnez. 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. This investment strategy does not come without social consequences. The firm has a history of purchasing newspapers to cut costs wherever . Hellman and BNP together own 46.4 per cent of Allfunds' shares. 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. Already the largest shareholder . ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! After all, it has a long and venerable history of supporting local news. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. Alden gradually took control of the papers that would become DFM. Financially, it was a raw deal. "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.". 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . Those that have survived are smaller, weaker, and more vulnerable to acquisition. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. But Glidden felt sure he knew the real reason: Alden wanted him gone. After weeks of back-and-forth, he agreed to a phone call, but only if parts of the conversation could be on background (which is to say, I could use the information generally but not attribute it to him). [2] Its managing director is Heath Freeman. Other records turned up from public pension funds and filings of publicly traded companies. 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. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . At the Pioneer Press , where its staff is down to 60, the paper produced a . Lee's board of directors . Heath Freeman in an undated photo provided by Goldin Solutions . 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 . 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. 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. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. NPR's A Martnez talks to McKay Coppins of The Atlantic about how a hedge fund, Alden Global Capital, is buying and then gutting newspapers and the implications for democracy. Its not the name or the flag., He may get his wish. We were like, Theyre not going to take our newspaper from us! Vallejo deserves better. A few weeks after the story came out, he was fired. 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. . 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 says he visited the Tribune's office and was "really shocked by how grim the scene was." ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. He started as a general-assignment reporter, covering local crime and community events. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. "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?" "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 . A group of 11 community newspapers owned by Red Wing Publishing Co. have been sold to MediaNews Group, owner of the St. Paul Pioneer Press and more than 100 newspapers across the country. 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. 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. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. If you want to know what its like when Alden Capital buys your local newspaper, you could look to Montgomery County, Pennsylvania, where coverage of local elections in more than a dozen communities falls to a single reporter working out of his attic and emailing questionnaires to candidates. If accepted, the $24 per share purchase price would . 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. When hed agreed to the interview, Id expected him to say the things he was supposed to saythat the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. 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. He had spoken on this issue before, and it was easy to see why. 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. Alden Global Capital has currently bid to buy all of Tribune. 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. 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. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Layout design was outsourced to freelancers in the Philippines. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Alden is known for . Its World War II correspondent brought firsthand news of Nazi concentration camps to American readers; its editorial page had the power to make or break political careers in Maryland. Collectively, they control about one-half of daily newspapers in the U.S. They had a father-figure relationship, one told me. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. 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. he asks. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. It . 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. It played with my mind a little bit, Glidden told me. Tuesday, 23 November 2021 07:46 PM EST. Otherwise, youre just peeing in the ocean.. "60 Minutes" correspondent Jon Wertheim did a strong piece that aired Sunday night about the grim state of local newspapers, in part because of how hedge funds, such as Alden Global Capital . So Freeman pivoted. Alden currently owns 32%. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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. Have you heard of the hedge fund Alden Global Capital? Freeman never responded. Now he was feeling the effects of their management. Im worried the worst is yet to come. He gained 100 pounds and started grinding his teeth at night. 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.

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