They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 The firm has a history of purchasing newspapers to cut costs wherever . All good works, and Knight is to be commended for them. A vulture doesnt hold a wounded animals head underwater. PDF GateHouse Media Alden Global Capital Tribune Media McClatchy Lee . Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune 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%. 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. Ken Kelleher - Creative Director / Artist - LinkedIn 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. It seemed reasonable to ask that they answer a few questions. A century later, the Tribune Tower has retained its grandeur. Tuesday, 23 November 2021 07:46 PM EST. In a news release Monday, Alden said it sent Lee's board a letter with the offer. 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. Already the largest shareholder . Hedge fund Alden Global is buying newspaper chain Tribune Publishing - CNN Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . Collectively, they control about one-half of daily newspapers in the U.S. The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen beforeromance in stone and steel, as one writer described it. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. but sadly on a global scale there is hardly any independent news sources left currently. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. John Temple: My newspaper died 10 years ago. 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. Some have even suggested that this represents Americas last chance to save its local-news industry. . Theres little evidence that Alden cares about the sustainability of its newspapers. Yes, today, it's a newspaper without a newsroom. My answer is its hard to know. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. 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. The shadow of hedge fund and corporate ownership leaves newsrooms in Why Chicago Tribune Staffers Are Terrified Of Their Hedge Fund - Forbes Hedge fund Alden Global is buying newspaper chain Tribune Publishing 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. 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. * Edited from 'independent . You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. 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 . The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. . Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. Alden Global Looks to Buy Newspaper Publisher Lee Enterprises Since Alden's . 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.). [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Alden Global Capital Is Killing the Newsroom - Common Dreams Hedge fund Alden's bid to buy Chicago Tribune, other papers approved by A look at Alden Global Capital is the cover story of the latest . In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. 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. 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. Hedge fund Alden's bid for owner of Virginian-Pilot, Daily Press [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. Those that have survived are smaller, weaker, and more vulnerable to acquisition. 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. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. . 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.. So who is investing with them? 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. 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. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. Billionaires battle for Tribune Publishing | The Economist Alden is in the business of making money, not journalism. How do you know who wins? the boy asks. Baltimore has always had its problems, he told me. [10][19][20], The company has its origins in R.D. 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. , 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. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. What happens next? On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. When it was over, a quarter of the newsroom was gone. This Is How a Newspaper Dies - POLITICO Magazine At their worst, they used their papers to maintain oppressive social hierarchies. 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. (Freeman denied this characterization through a spokesperson. You need real capital to move the needle, he told me. Its hard to imagine theyd show, anyway. 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. After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. 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. When The New York Times profiles him in 1991, it notes that he excels at profiting from other peoples misery and quotes a parade of disgruntled clients and partners. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, 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. Margaret Sullivan: The Constitution doesnt work without local news. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? 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. Scott Olson/Getty Images On Monday, Dail "A lot of cities almost operate with the assumption that there will be at least one local newspaper, in some cases several local newspapers, acting as a check on the authorities," he says. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. This company that owns us now seems to still be prettyI dont even know how to put it, the editor said, according to a recording of the meeting obtained by The Atlantic. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. This is a subscription-based business.. 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 . Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Its not the name or the flag., He may get his wish. Alden Launches $142 Million Bid for Publisher Lee Enterprises He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. The question was how. Heath hopes the well never runs dry, but hes going to keep pumping until it does. NPR reached out to Alden for a response. Now it might be facing extinction. The shows premise pits two couples against each other for the chance to win a home. They had a father-figure relationship, one told me. Youd be surprised. For those who cared about the future of local news, it was hard to imagine a better outcomewhich made it all the more devastating when the bid fell through. Its a hedge that went and bought up some titles that it milks for cash.. A spokesman took issue with the entirety of the story, and laid out a long list of questions attacking the integrity of the reporter, The Atlantic and some of his sources without addressing some of the more specific claims within the report. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. He started as a general-assignment reporter, covering local crime and community events. 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. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. Feb. 16, 2021 8:04 PM PT. 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. It is the nations second-largest newspaper owner by circulation. 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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. The Tribune had been profitable when Alden took over. 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. No response came back. It has not, however, retained the Chicago Tribune. Alden Global Capital is a hedge fund based in Manhattan, New York City. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers 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. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. . 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. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Coordinated by . [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . 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. Alden currently owns 32%. Alden, which already owned one-third of . 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? The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. Financially, it was a raw deal. By McKay Coppins. This investment strategy does not come without social consequences. 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. By Julie Reynolds. It was founded in 2007 by Randall D. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. 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. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. I felt like a terrible reporter because I couldnt get to everything.. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? Lee blocks Alden Global Capital move for more board control - STLPR When a reporter asked if their work was still valued, the editor sounded deflated. 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 . I put the question to Freeman, but he declined to answer on the record. Hedge Fund Alden in Hunt for Another Big Newspaper Chain "[18], Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. Its a game, Randy explains to his son. 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. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. How Alden Global Capital will make money owning Tribune Publishing But that would require slow, painstaking workand there are easier ways to make money. [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. 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. 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. Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. One, the warning shot was fired in 2011, in a Poynter Institute article titled Who is investor Randall Smith and why is he buying up newspaper companies? Randall Smith is the co-founder of Alden, together with his young protg, Heath Freeman, and has been called the grandfather of vulture investing. Vulture funds by definition dont reinvest in their properties they suck them dry. Some of these papers likely would have been liquidated if the fund had not stepped in to buy them, as Alden's president told Coppins. City budgets balloon, along with corruption and dysfunction. [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. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper (Freeman has, in the past, disputed Bainums account of the negotiations.) Digital First Media - Wikipedia Media . Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. 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. Alden is known for . Live news: US manufacturing sector contracts for fourth straight month Im worried the worst is yet to come. 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. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. 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 . But whats happening in Chicago is different. 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. Updated May 21, 2021 at 2:13 PM ET. During its five-year run with Alden, it seems quite unlikely that no one at Knight knew about the hedge funds slash-and-burn strategy for two reasons. As a privately held hedge fund, Alden doesnt have to reveal much to the public. Somehow, no one's buying it. "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.". Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. Smith began investing in newspapers and media around the same time. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. Freeman never responded. 'Sobs, gasps, expletives' over latest Denver Post layoffs", "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat", "How Massive Cuts Have Remade The Denver Post", "Newsonomics: By selling to Americas worst newspaper owners, Michael Ferro ushers the vultures into Tribune", "A Secretive Hedge Fund Is Gutting Newsrooms", "Affiliated Media Files for Bankruptcy to Restructure (Update2)", "The shakeup at MediaNews: Why it could be the leadup to a massive newspaper consolidation", "Alden Global Capital to buy Tribune in deal valued at $630 million", "Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover", "Lee Enterprises Board Rejects Alden's Acquisition Offer", "Alden Global Capital takes Lee Enterprises to court over failed board nominations", "Alden Global Capital sues Lee Enterprises after rejected takeover bid", "Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board", "Lee Enterprises shareholders reelect three directors amid hedge fund fight", "Tampa Bay Times sells printing plant to developer for $21 million", "A hedge fund's 'mercenary' strategy: Buy newspapers, slash jobs, sell the buildings", "The hedge fund trying to buy Gannett faces federal probe after investing newspaper workers' pensions in its own funds", https://en.wikipedia.org/w/index.php?title=Alden_Global_Capital&oldid=1130942589, This page was last edited on 1 January 2023, at 19:27. AP. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. 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? 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. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. The 1% own and operate the . 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. Is this company saving newspapers or profiting from their demise? - The Feb 16, 2021 at 8:05 pm. 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. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. 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.
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