Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. Like many alumni of the Sun, Simon is steeped in the papers history. 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. When hed agreed to the interview, Id expected him to say the things he was supposed to saythat the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. 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. After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his fathers death. 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?. Send any friend a story As a subscriber, you . Media . and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . So far, Alden has limited its closures primarily to weekly newspapers, but Doctor argues its only a matter of time before the firm starts shutting down its dailies as well. But outside the industry, few seemed to notice. "[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. 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. 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. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. 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 . But even for a group of journalists, it was tough to keep the publics attention. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. But this acquisition was profound, making Alden Global . Smith. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. One early article, in the trade publication Poynter, suggested that Aldens interest in the local-news business could be seen as flattering and quoted the owner of The Denver Post as saying he had enormous respect for the firm. 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. 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. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . Its a game, Randy explains to his son. This is predatory.. Enter the email address you signed up with and we'll email you a reset link. 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. Am I going to win against capitalism in America? [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. [3] [4] With its acquisition of Tribune Publishing in late . ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. October 14, 2021. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. He can cite decades-old scoops and tell you whom they pissed off. Alden Global Capital has currently bid to buy all of Tribune. 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. What happens next? 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. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. When it was over, a quarter of the newsroom was gone. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. (Freeman denied this through a spokesperson.) [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. 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. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. 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. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. It hurts to see the paper like this, he told her. Senior lenders under the deal were to swap debt for stock. Instead, they gutted the place. Coordinated by . Youd be surprised. 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 . Alden, which owns more than 200 newspapers across the country, has developed a reputation for using extensive layoffs and severe cost cuts at the newspapers it owns. At the end of last month, Alden Global Capital, a notorious newspaper-owning hedge fund, sought to stake its claim on one of the last newspaper chains it hasn't yet touched: Lee Enterprises, which owns 90 publications across the country.Alden, which currently owns six percent of Lee's stock, sent an unsolicited offer to purchase the newspaper chain for $24 per share. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. 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. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. It was clear that they didnt care about this being a business in the future. Next up: Chicago, Baltimore, and the New York Daily News. 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. The shows premise pits two couples against each other for the chance to win a home. 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. 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.. But we dont know, because they arent saying. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. But whats happening in Chicago is different. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. Baltimore has always had its problems, he told me. At their worst, they used their papers to maintain oppressive social hierarchies. 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.. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. 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. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. Its a hedge that went and bought up some titles that it milks for cash.. But that's not true for all of them. 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. On Monday, Dail Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. The question was how. 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. 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%. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. 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. He was fired after criticizing Alden in a Washington Post interview. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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. 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. 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. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. "And what we've seen in a lot of these places where newspapers have been scaled back or even closed is there really is no comparable product in place, whether it's by the government or by another news organization, to do what these local newspapers have done for hundreds of years.". At the Pioneer Press , where its staff is down to 60, the paper produced a . 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. 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. 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. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Former Knight-Ridder headquarters. 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. Aldens calculus was simple. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. he asks. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. 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. 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. * Edited from 'independent . But in the case of local news, nothing comparable is ready to replace these papers when they die. 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. Nov. 22, 2021. Two veteran journalists from the Chicago Tribune published an op-ed on Sunday challenging one of the paper's principal owners, the New York hedge fund Alden Global Capital. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. The hollowing-out of the Chicago Tribune was noted in the national press, of course. 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. 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.. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? A Secretive Hedge Fund Is Gutting Newsrooms. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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. Financially, it was a raw deal. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. 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. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. A search through nonprofit groups publicly available financial reports, commonly known as Form 990s, reveals that all kinds of organizations some surprising have invested their monies with Alden over the years. (Freeman denied this characterization through a spokesperson. 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. Scott Olson/Getty Images Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. 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. It has not, however, retained the Chicago Tribune. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. He used his own money to pull court records, and went years without going on a vacation. [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. 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. My answer is its hard to know. He wrote, "Alden Global Capital has eliminated the jobs of scores of reporters and editors, and decimated journalism in cities all over the country: Denver, Boston, San Jose, Trenton, etc.