[4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. These include the Chicago Tribune, the New York Daily News, and The Baltimore Sun. My answer is its hard to know. 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. 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 . Im repulsed by the incestuous world of New York journalism, he tells New York magazine. The Alden Global Capital . Hedge fund Alden to buy Tribune Publishing in deal valued at $630 Billionaires battle for Tribune Publishing | The Economist But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. As a reporter who's 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 America's largest newspaper chains?. NPR reached out to Alden for a response. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. Alden Global Capital is buying and gutting local newspapers : NPR - NPR.org 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. 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. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. Below are highlights from his conversation with Morning Edition's A Martnez. 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. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. 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.. I felt like a terrible reporter because I couldnt get to everything.. Its hard to imagine theyd show, anyway. Its not the name or the flag., He may get his wish. Instead, they gutted the place. 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. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Alden Global to buy Tribune Publishing for $630 million - Los Angeles Times If you want to know what its like when Alden Capital buys your local newspaper, you could look to Montgomery County, Pennsylvania, where coverage of local elections in more than a dozen communities falls to a single reporter working out of his attic and emailing questionnaires to candidates. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. This is a subscription-based business.. Morale tanked; reporters burned out. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the 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. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. "[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 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. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). One acquaintance tells The Village Voice that hes the kind of guy who divests himself every couple of years to avoid ending up on lists of the worlds richest people. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. Some have even suggested that this represents Americas last chance to save its local-news industry. 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 . Live news updates from February 28: Tesla to build Mexico - ft.com Its a hedge that went and bought up some titles that it milks for cash.. "60 Minutes" correspondent Jon Wertheim did a strong piece that aired Sunday night about the grim state of local newspapers, in part because of how hedge funds, such as Alden Global Capital . You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. 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. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in creative destruction, dismantling outmoded businesses to make room for more innovative insurgents. The scene was somehow even grimmer than Id imagined. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. He says he visited the Tribune's office and was "really shocked by how grim the scene was." (Freeman denied this through a spokesperson.) Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. [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. That's because the fund is stepping in to buy and then gut newsrooms across the country. Alden Global Capital, the hedge fund that owns the Chicago Tribune and New York Daily News, offered to buy Lee Enterprises Inc. for about $142 million, seeking a larger share of the . The Ubiquity - The student news site of Quartz Hill High School Hedge fund Alden's bid for owner of Virginian-Pilot, Daily Press 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. 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. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Probably not.. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. Hedge fund Alden in hunt for another big newspaper chain [2] Its managing director is Heath Freeman. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. Since Alden's . Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. When he did, he exhibited a casual contempt for the journalists who worked there. When it was over, a quarter of the newsroom was gone. 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. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. He used his own money to pull court records, and went years without going on a vacation. When the city-hall reporter left a few months later, he picked up that beat too. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. 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. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. The pitch had a certain romantic appeal to the reporters in the room. Well, that wasnt the point. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. Alden is in the business of making money, not journalism. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Tribune Sale to Alden Approved by Shareholders - The New York Times 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. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. He declined to meet me in person or to appear on Zoom. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. [10][19][20], The company has its origins in R.D. Feb. 16, 2021 8:04 PM PT. But for all the theatrics, his marching orders were always the same: Cut more. Alden Global Capital, the Hedge Fund Killing Newspapers - The Atlantic MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Hedge Fund Alden in Hunt for Another Big Newspaper Chain Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. Alden Global Capital, a New York-based hedge fund that this year became the second largest newspaper publisher in the United States, has made an offer to purchase Lee Enterprises, the media company that owns 75 daily newspapers, including the St. Louis Post-Dispatch. A Secretive Hedge Fund Is Gutting Newsrooms. Alden Global Capital seeks to buy Lee Enterprises for $144M . But a sense of fatalism permeated the work. 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. Coordinated by . 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. 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. 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. [7][8] Alden's purchase price was $635 million, or $17.25 per share. Alden, which already owned one-third of . Have you heard of the hedge fund Alden Global Capital? Those that have survived are smaller, weaker, and more vulnerable to acquisition. They are also defined by an obsessive secrecy. 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. [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. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. Alden Global Capital Is Killing the Newsroom - Common Dreams Hedge fund reaches $630m deal to buy remaining Tribune Publishing 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 . 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. Hedge fund Alden in hunt for another big newspaper chain - WKMG He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. 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. Lee, which owns the St. Louis Post Dispatch, the Omaha World-Herald and many other daily newspapers throughout the region, is staving off a takeover attempt by Alden Global Capital, a New-York . What Alden's potential acquisition of Lee Enterprises means for 20-plus 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. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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. [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. Many of the operators were looking at the newspaper business as a local advertising business, he said, and we didnt believe that was the right way to look at it. So who is investing with them? For two men who employ thousands of journalists, remarkably little is known about them. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife.