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. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. At the Pioneer Press , where its staff is down to 60, the paper produced a . Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. A look at Alden Global Capital is the cover story of the latest . 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 . Around this time, Randy becomes preoccupied with privacy. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. 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. 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. 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. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. but sadly on a global scale there is hardly any independent news sources left currently. But that's not true for all of them. In the past 15 years, more than a quarter of American newspapers have gone out of business. When he did, he exhibited a casual contempt for the journalists who worked there. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. "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. Alden Global Capital is a hedge fund based in Manhattan, New York City. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. 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). The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. He was fired after criticizing Alden in a Washington Post interview. Alden gradually took control of the papers that would become DFM. Hes acutely aware of the risksI may end up with egg on my face, he saidbut he believes its worth trying to develop a successful model that could be replicated in other markets. New York hedge fund and U.S. newspaper consolidator Alden Global Capital LLC has made a proposal to take Lee Enterprises Inc. private in a deal that values the company at around $141 million. Gerry Smith. For a fleeting moment, Aldens newspapers became unexpected darlings of the journalism industrywritten about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. Yes, today, it's a newspaper without a newsroom. By McKay Coppins. 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. Who is investor Randall Smith and why is he buying up newspaper companies, deep losses to Alden funds overall values, Denver Post newsroom workers invoke Thirst Amendment to raise awareness about conditions under Alden, Pittsburgh newspaper workers are making history, The NewsGuild urges public pension funds to divest from Cerberus, NewsGuild to Lee Shareholders: Reject Aldens Vote No Campaign. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. 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. This investment strategy does not come without social consequences. Collectively, they control about one-half of daily newspapers in the U.S. By Julie Reynolds. So who is investing with them? They could be vain, bumbling, even corrupt. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. (Freeman has, in the past, disputed Bainums account of the negotiations.) 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. He declined to meet me in person or to appear on Zoom. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. How do you know who wins? the boy asks. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. "The question is, will local communities decide that this is an important issue, that it's worth saving these newspapers, protecting them from firms like Alden, or will they decide that they don't really care?" The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. But it turned out that Smith had so many doorsteps16 mansions in Palm Beach alone, as of a few years ago, some of them behind gatesthat the plan proved impractical. 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 . But I had underestimated how little Aldens founders care about their standing in the journalism world. For two men who employ thousands of journalists, remarkably little is known about them. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. 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 . Somehow, no one's buying it. Today, half of all daily newspapers in the U.S. are controlled by financial firms, according to an analysis by the Financial Times, and the number is almost certain to grow. Heath Freeman in an undated photo provided by Goldin Solutions . Im repulsed by the incestuous world of New York journalism, he tells New York magazine. 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. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Probably not.. But in the case of local news, nothing comparable is ready to replace these papers when they die. [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. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. In budget meetings, according to the former executive, Freeman hectored local publishers, demanding that they produce detailed numbers off the top of their head and then humiliating them when they couldnt. Alden is in the business of making money, not journalism. This story originally appeared on the Morning Edition live blog. 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. Some have even suggested that this represents Americas last chance to save its local-news industry. It turned out that those ownersNew York hedge funders whom Glidden took to calling the lizard peoplewere laser-focused on increasing the papers profit margins. But there are some clues here and there. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. They are also defined by an obsessive secrecy. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news. Instead, the money was used to finance the hedge funds other ventures. 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. 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. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. The pay was terrible and the work was not glamorous, but Glidden loved his job. 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. Scott Olson/Getty Images Tuesday, 23 November 2021 07:46 PM EST. To many, it just didnt seem possible that Alden would instead choose to destroy newspapers by laying off the workforce en masse and stripping papers of all their assets. In a news release Monday, Alden said it sent Lee's board a letter with the offer. 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. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Im worried the worst is yet to come. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . 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. But there was still a sliver of hope: Tribune and Alden agreed that the hedge fund would not increase its stake in the company for at least seven months. Shares of Lee Enterprises Inc. rose sharply Monday after hedge fund Alden Global Capital LLC offered to buy the newspaper publisher for about $141 million. Well, that wasnt the point. It seemed reasonable to ask that they answer a few questions. For Baltimore to avoid a similar fate, Simon told me, something new would have to come alonga spiritual heir to the Sun: A newspaper is its contents and the people who make it. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. [33], Alden Global Capital's management of American newspapers has been criticized. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. 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. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. Alden is known for . 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. 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.). 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. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . Smith. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. You need real capital to move the needle, he told me. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. A month after he started, one of his fellow reporters left and Glidden was asked to start covering schools in addition to his other responsibilities. 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. Ken Kelleher is an American sculptor. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. Am I going to win against capitalism in America? * Edited from 'independent . Alden currently owns 32%. The Tribune had been profitable when Alden took over. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Inside Alden Global Capital. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. When the city-hall reporter left a few months later, he picked up that beat too. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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. 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. 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 . Smith began investing in newspapers and media around the same time. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. That may well be the future of local news, he says. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. But even for a group of journalists, it was tough to keep the publics attention. As a privately held hedge fund, Alden doesnt have to reveal much to the public. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. This summer, Alden Global Capital acquired Tribune Publishing and its titles, from small community newspapers to major metro titles like its flagship, The Chicago Tribune, and The Baltimore Sun. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . But whats happening in Chicago is different. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. 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. 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. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. Some people believe that local newspapers will eventually be replaced by new publications, which Coppins describes as "built from the ground-up for the digital era." Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. After a contentious presidential race and amid a still-raging pandemic, there was a limited supply of outrage and sympathy to spare for local reporters. Theres little evidence that Alden cares about the sustainability of its newspapers. But for all the theatrics, his marching orders were always the same: Cut more. But this acquisition was profound, making Alden Global . In May, the Tribune was acquired by Alden Global Capital, a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country. 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. 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 . The question was how. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. Read: What we lost when Gannett came to town. 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. 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. After all, it has a long and venerable history of supporting local news. "[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. But that would require slow, painstaking workand there are easier ways to make money. "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.". Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. He stops talking to the press, refuses to be photographed, and rarely appears in public. Located in the same Manhattan office building as Alden, it funds stem-cell research, health-related charities, arts and culture and Duke University, alma mater of Smiths protg Heath Freeman. Hedge fund Alden Global Capital will acquire the rest of what it does not already own of Tribune Publishing, owner of the Chicago Tribune, the New York Daily News and other local newspapers, in a . [27] The Alden lawsuit asserts that the members of the Lee board "have every reason to maintain the status quo and their lucrative corporate positions" and that they are "focused more on [their] own power than what's best for the company.
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