[11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Its not as if the Tribune is just withering on the vine despite the best efforts of the gardeners, Charlie Johnson, a former Metro reporter, told me after the latest round of buyouts this summer. Since they bought their first newspapers a decade ago, no one has been more mercenary or less interested in pretending to care about their publications long-term health. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. 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. We were like, Theyre not going to take our newspaper from us! Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. A look at Alden Global Capital is the cover story of the latest . . Am I going to win against capitalism in America? . What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. [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. [7][8] Alden's purchase price was $635 million, or $17.25 per share. 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. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. To find the papers current headquarters one afternoon in late June, I took a cab across town to an industrial block west of the river. 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. It has figured out how to make a profit by driving newspapers into the ground, he says, since Alden's aim is not to make them into long-term sustainable businesses but rather maximize profits quickly to show it has made a winning investment. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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. 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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. They want to know who exactly profits when we learn, as Harvard Nieman Lab's Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media . Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. Dec 9, 2021. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. The practical effect of the death of local journalism is that you get what weve had, he told me, which is a halcyon time for corruption and mismanagement and basically misrule.. Somehow, no one's buying it. At the Pioneer Press , where its staff is down to 60, the paper produced a . The men killing Americas newspapers, how Slack upended the workplace, and the new meth. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. 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. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. The California Public Employees Retirement System, a few European banks, and Citigroup and Coca Cola Companys pension funds have all invested in Alden, along with charities such as the Circle of Service Foundation and the Alfred University Endowment. 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. 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. 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.. Well, that wasnt the point. When the city-hall reporter left a few months later, he picked up that beat too. "[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. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. Hes acutely aware of the risksI may end up with egg on my face, he saidbut he believes its worth trying to develop a successful model that could be replicated in other markets. 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. This investment strategy does not come without social consequences. Alden is in the business of making money, not journalism. October 14, 2021. * Edited from 'independent . 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. As a reporter whos 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 Americas largest newspaper chains? Margaret Sullivan: The Constitution doesnt work without local news. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. Heath hopes the well never runs dry, but hes going to keep pumping until it does. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. The show draws from a book written by a Sun reporter, and Simon was quick to point out that the paper still has good journalists covering important stories. He says he visited the Tribune's office and was "really shocked by how grim the scene was." The 21st century has seen many of these generational owners flee the industry, to devastating effect. 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? 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. Heath Freeman in an undated photo provided by Goldin Solutions . That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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). 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 . "[25], In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today. A vulture doesnt hold a wounded animals head underwater. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. Alden Global Capital is a hedge fund based in Manhattan, New York City. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. Since Alden's . MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. If accepted, the $24 per share purchase price would . 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. Of course, its easy to romanticize past eras of journalism. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. 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.. Instead, they gutted the place. 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. Its a hedge that went and bought up some titles that it milks for cash.. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. Its not the name or the flag., He may get his wish. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. 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. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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 . Two days after the deal was finalized, Alden announced an aggressive round of buyouts. "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 . 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 . I asked if anyone there at the time was aware of Aldens vulture business strategy. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. 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. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. Coordinated by . More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. It seemed reasonable to ask that they answer a few questions. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. So what is this Distressed Opportunities fund? They were very tight. Freeman has resisted elaborating on his relationship with Smith, saying simply that they were family friends before going into business together. It was founded in 2007 by Randall D. Financially, it was a raw deal. 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. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. Its hard to imagine theyd show, anyway. Youd be surprised. Scott Olson/Getty Images It . 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. 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. The specific shareholder rights plan adopted by the Lee board forbids Alden from purchasing more than 10% of the company, and will be in force for one year. 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. Today, we know that Knight, CalPERS and others no longer invest with Alden. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. Im worried the worst is yet to come. But that's not true for all of them. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. It felt important. Below are highlights from his conversation with Morning Edition's A Martnez. 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 pitch had a certain romantic appeal to the reporters in the room. "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. But there are some clues here and there. 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.