what newspapers does alden global capital own

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I put the question to Freeman, but he declined to answer on the record. They are also defined by an obsessive secrecy. It seemed reasonable to ask that they answer a few questions. [10][19][20], The company has its origins in R.D. When he did, he exhibited a casual contempt for the journalists who worked there. 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). 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. When a reporter asked if their work was still valued, the editor sounded deflated. . Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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? When it was over, a quarter of the newsroom was gone. 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. But this acquisition was profound, making Alden Global . [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 1% own and operate the . Feb. 16, 2021 8:04 PM PT. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. He started as a general-assignment reporter, covering local crime and community events. 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. 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. . Its not the name or the flag., He may get his wish. Instead, the money was used to finance the hedge funds other ventures. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. 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. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. Dec 9, 2021. But we dont know, because they arent saying. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. 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 scene was somehow even grimmer than Id imagined. Randy claims no editorial role in the Press, and his investment in the projectwhich has little chance of producing the kind of return hes accustomed tocould be chalked up to brotherly loyalty. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. Otherwise, youre just peeing in the ocean.. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. The Alden Global Capital . But he has a big idea: He believes theres serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. 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. Freeman never responded. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. Meanwhile, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. 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 . Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Alden's holdings already spanned the country, including the . Coppins notes that there's even some research indicating that city budgets increase as a result, because corruption and dysfunction can take hold without a newspaper to hold powerful people to account. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. But Glidden felt sure he knew the real reason: Alden wanted him gone. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. Instead, they gutted the place. 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. [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. With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers its alienating. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. If accepted, the $24 per share purchase price would . Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . 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. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. Today, we know that Knight, CalPERS and others no longer invest with Alden. 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. The hollowing-out of the Chicago Tribune was noted in the national press, of course. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. [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. 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. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Aldens calculus was simple. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . So I was more than a little shocked to learn that, according to its tax filings, Knight had invested $13 million with Aldens Distressed Opportunities Fund by 2010 and kept investing through 2014. 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. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. We were like, Theyre not going to take our newspaper from us! Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. 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%. Yes, today, it's a newspaper without a newsroom. 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. This was the core of Freemans argument. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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. 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. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . Morale tanked; reporters burned out. 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. Somehow, no one's buying it. "[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. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and theyd gotten there by dismantling local journalism. Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. The 21st century has seen many of these generational owners flee the industry, to devastating effect. [33], Alden Global Capital's management of American newspapers has been criticized. Instead, they gutted the place. Rapid-fire changes underway at newspapers sold to cost-slashing hedge fund Alden Global Capital have led to a profound case of the jitters at newsrooms like the New York Daily News. "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. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. The rationale offered by the board was, Consistent with its fiduciary duties, Lees Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Aldens unsolicited proposal to acquire Lee. , 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. After all, it has a long and venerable history of supporting local news. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. Gerry Smith. [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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. 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. Former Knight-Ridder headquarters. 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. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. By McKay Coppins. 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. Its a hedge that went and bought up some titles that it milks for cash.. In legal filings, Alden has acknowledged diverting hundreds of millions of dollars from its newspapers into risky bets on commercial real estate, a bankrupt pharmacy chain, and Greek debt bonds. On . If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Aldens Distressed Opportunities Fund was launched in 2008 and saw astounding success in its first few months, showing returns of more than 30 percent a big rescue for Alden, whose investments in Russia the year before had lost more than 61 percent of their value. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. [3] [4] With its acquisition of Tribune Publishing in late . 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. It wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. 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. And everyone knows its going to run dry.. I asked if anyone there at the time was aware of Aldens vulture business strategy. At their worst, they used their papers to maintain oppressive social hierarchies. Feb 16, 2021 at 8:05 pm. 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. 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 . John Temple: My newspaper died 10 years ago. This story originally appeared on the Morning Edition live blog. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. 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. But outside the industry, few seemed to notice. He used his own money to pull court records, and went years without going on a vacation. You need real capital to move the needle, he told me. 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. but sadly on a global scale there is hardly any independent news sources left currently. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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 . by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. 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. 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. 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. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. So Freeman pivoted. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. Vallejo deserves better. A few weeks after the story came out, he was fired. 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. Tuesday, 23 November 2021 07:46 PM EST. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. A quarter of the newsroom (including many big-name reporters, columnists and photographers) took the buyouts Alden offered, and while some great reporters remain on staff, it's nearly impossible for them to fill those gaps, Coppins says. 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 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. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. . Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . Youd be surprised. 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 . Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. 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. Nov. 22, 2021. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. He stops talking to the press, refuses to be photographed, and rarely appears in public. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. 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. 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. Like many alumni of the Sun, Simon is steeped in the papers history. about two hundred American newspapers. 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. Baltimore has always had its problems, he told me. 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. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. These papers would have been liquidated if not for us stepping up.. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. It . Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. Smith began investing in newspapers and media around the same time. 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. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Coordinated by . 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. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. Its hard to imagine theyd show, anyway. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. Who Profits From Alden Global Capital? 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. 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. It has not, however, retained the Chicago Tribune. It hurts to see the paper like this, he told her. When the sale failed to attract a sufficiently high offer, Freeman turned his attention to squeezing as much cash out of the newspapers as possible. 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. 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. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. A century later, the Tribune Tower has retained its grandeur. What happens next? 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. The pay was terrible and the work was not glamorous, but Glidden loved his job. 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.). It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. 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? Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. Already the largest shareholder . On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers.

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what newspapers does alden global capital own

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I put the question to Freeman, but he declined to answer on the record. They are also defined by an obsessive secrecy. It seemed reasonable to ask that they answer a few questions. [10][19][20], The company has its origins in R.D. When he did, he exhibited a casual contempt for the journalists who worked there. 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). 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. When a reporter asked if their work was still valued, the editor sounded deflated. . Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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? When it was over, a quarter of the newsroom was gone. 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. But this acquisition was profound, making Alden Global . [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 1% own and operate the . Feb. 16, 2021 8:04 PM PT. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. He started as a general-assignment reporter, covering local crime and community events. 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. 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. . Its not the name or the flag., He may get his wish. Instead, the money was used to finance the hedge funds other ventures. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. 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. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. Dec 9, 2021. But we dont know, because they arent saying. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. 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 scene was somehow even grimmer than Id imagined. Randy claims no editorial role in the Press, and his investment in the projectwhich has little chance of producing the kind of return hes accustomed tocould be chalked up to brotherly loyalty. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. Otherwise, youre just peeing in the ocean.. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. The Alden Global Capital . But he has a big idea: He believes theres serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. 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. Freeman never responded. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. Meanwhile, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. 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 . Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Alden's holdings already spanned the country, including the . Coppins notes that there's even some research indicating that city budgets increase as a result, because corruption and dysfunction can take hold without a newspaper to hold powerful people to account. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. But Glidden felt sure he knew the real reason: Alden wanted him gone. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. Instead, they gutted the place. 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. [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. With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers its alienating. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. If accepted, the $24 per share purchase price would . Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . 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. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. Today, we know that Knight, CalPERS and others no longer invest with Alden. 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. The hollowing-out of the Chicago Tribune was noted in the national press, of course. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. [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. 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. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Aldens calculus was simple. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . So I was more than a little shocked to learn that, according to its tax filings, Knight had invested $13 million with Aldens Distressed Opportunities Fund by 2010 and kept investing through 2014. 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. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. We were like, Theyre not going to take our newspaper from us! Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. 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%. Yes, today, it's a newspaper without a newsroom. 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. This was the core of Freemans argument. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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. 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. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . Morale tanked; reporters burned out. 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. Somehow, no one's buying it. "[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. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and theyd gotten there by dismantling local journalism. Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. The 21st century has seen many of these generational owners flee the industry, to devastating effect. [33], Alden Global Capital's management of American newspapers has been criticized. Instead, they gutted the place. Rapid-fire changes underway at newspapers sold to cost-slashing hedge fund Alden Global Capital have led to a profound case of the jitters at newsrooms like the New York Daily News. "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. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. The rationale offered by the board was, Consistent with its fiduciary duties, Lees Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Aldens unsolicited proposal to acquire Lee. , 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. After all, it has a long and venerable history of supporting local news. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. Gerry Smith. [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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. 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. Former Knight-Ridder headquarters. 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. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. By McKay Coppins. 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. Its a hedge that went and bought up some titles that it milks for cash.. In legal filings, Alden has acknowledged diverting hundreds of millions of dollars from its newspapers into risky bets on commercial real estate, a bankrupt pharmacy chain, and Greek debt bonds. On . If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Aldens Distressed Opportunities Fund was launched in 2008 and saw astounding success in its first few months, showing returns of more than 30 percent a big rescue for Alden, whose investments in Russia the year before had lost more than 61 percent of their value. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. [3] [4] With its acquisition of Tribune Publishing in late . 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. It wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. 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. And everyone knows its going to run dry.. I asked if anyone there at the time was aware of Aldens vulture business strategy. At their worst, they used their papers to maintain oppressive social hierarchies. Feb 16, 2021 at 8:05 pm. 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. 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 . John Temple: My newspaper died 10 years ago. This story originally appeared on the Morning Edition live blog. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. 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. But outside the industry, few seemed to notice. He used his own money to pull court records, and went years without going on a vacation. You need real capital to move the needle, he told me. 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. but sadly on a global scale there is hardly any independent news sources left currently. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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 . by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. 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. 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. 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. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. So Freeman pivoted. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. Vallejo deserves better. A few weeks after the story came out, he was fired. 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. Tuesday, 23 November 2021 07:46 PM EST. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. A quarter of the newsroom (including many big-name reporters, columnists and photographers) took the buyouts Alden offered, and while some great reporters remain on staff, it's nearly impossible for them to fill those gaps, Coppins says. 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 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. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. . Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . Youd be surprised. 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 . Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. 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. Nov. 22, 2021. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. He stops talking to the press, refuses to be photographed, and rarely appears in public. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. 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. 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. Like many alumni of the Sun, Simon is steeped in the papers history. about two hundred American newspapers. 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. Baltimore has always had its problems, he told me. 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. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. These papers would have been liquidated if not for us stepping up.. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. It . Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. Smith began investing in newspapers and media around the same time. 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. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Coordinated by . 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. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. Its hard to imagine theyd show, anyway. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. Who Profits From Alden Global Capital? 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. 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. It has not, however, retained the Chicago Tribune. It hurts to see the paper like this, he told her. When the sale failed to attract a sufficiently high offer, Freeman turned his attention to squeezing as much cash out of the newspapers as possible. 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. 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. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. A century later, the Tribune Tower has retained its grandeur. What happens next? 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. The pay was terrible and the work was not glamorous, but Glidden loved his job. 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.). It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. 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? Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. Already the largest shareholder . On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. 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