Heath Freeman in an undated photo provided by Goldin Solutions . They want to know who exactly profits when we learn, as Harvard Nieman Labs Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media newspapers. . What happens next? The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. The scene was somehow even grimmer than Id imagined. 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. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. Lee Enterprises, the owner of daily newspapers in Winston-Salem and Greensboro, this morning rejected a hedge fund's proposal to take over the company. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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. 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. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. Some have even suggested that this represents Americas last chance to save its local-news industry. Instead, they gutted the place. Connecting this to the current state of American newspaper ownership seems rather tenuous.. Have you heard of the hedge fund Alden Global Capital? By 2011, when Aldens Distressed Opportunities Fund lost more than 20 percent of its value, Knights holdings in the fund were valued at $10.7 million. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. (Freeman denied this through a spokesperson.) MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. 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. Somehow, no one's buying it. They could be vain, bumbling, even corrupt. He declined to meet me in person or to appear on Zoom. Aldens calculus was simple. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. . 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. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. Hedge fund Alden Global Capital will acquire the rest of what it does not already own of Tribune Publishing, owner of the Chicago Tribune, the New York Daily News and other local newspapers, in a . 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. 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. 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. Probably not.. A recent Financial Times analysis found that half of all daily newspapers in the U.S. are controlled by financial firms, and Coppins says that number is all but certain to keep growing. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. 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. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. 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). One tagline he was considering was Marylands Best Newsroom., When I asked, half in jest, if he planned to raid the Sun to staff up, he responded with a muted grin. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. NPR reached out to Alden for a response. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. Tuesday, 23 November 2021 07:46 PM EST. When a reporter asked if their work was still valued, the editor sounded deflated. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. Read: What we lost when Gannett came to town. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. No response came back. 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.. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. 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. 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.. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. Now it might be facing extinction. 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 . Media . It played with my mind a little bit, Glidden told me. A native of Vallejo, he was proud to work for his hometown paper. 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. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. 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. 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? 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. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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. A century later, the Tribune Tower has retained its grandeur. "[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. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters ability to sort the honest politicians from the political whores by exposing abuses of power. Theres little evidence that Alden cares about the sustainability of its newspapers. 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. Im worried the worst is yet to come. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. 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. 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. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. So who is investing with them? 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. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. [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. Alden currently owns 32%. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. The pitch had a certain romantic appeal to the reporters in the room. 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 story of Alden Capital begins on the set of a 1960s TV game show called Dream House. It was clear that they didnt care about this being a business in the future. AP. 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. [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. They are also defined by an obsessive secrecy. 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. 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. Scott Olson/Getty Images He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. . 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?. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . 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. '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. 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. | Michael Gray, WIkimedia Commons. Alden's holdings already spanned the country, including the . And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 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. He had spoken on this issue before, and it was easy to see why. But as an organization that believes that quality information is essential for individuals and communities to make their own bestchoices, it was disappointing that the foundation couldnt simply own up to its error in judgment when it came to Alden. 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. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. Youd be surprised. (Freeman has, in the past, disputed Bainums account of the negotiations.) [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. As a privately held hedge fund, Alden doesnt have to reveal much to the public. I asked. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. A look at Alden Global Capital is the cover story of the latest . A former Sun reporter whose work on the police beat famously led to his creation of The Wire on HBO, Simon told me the paper had suffered for years under a series of blundering corporate ownersand it was only a matter of time before an enterprise as cold-blooded as Alden finally put it out of its misery. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit.
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