It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? It seemed reasonable to ask that they answer a few questions. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. 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 . Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . He took particular pride in finding novel ways to give away his family fortune, funding child-poverty initiatives in Baltimore and prenatal care for women in Liberia. Alden is in the business of making money, not journalism. 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. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. 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. 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. 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 . A vulture doesnt hold a wounded animals head underwater. By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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. Instead, they gutted the place. 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. Send any friend a story As a subscriber, you . The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige. 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. So Freeman pivoted. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. 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. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. 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. "[18], Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. Around this time, Randy becomes preoccupied with privacy. 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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. 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. Read: What we lost when Gannett came to town. Alden Global Capital, the New York hedge fund that bought Tribune Publishing this year, said on Monday that it was making an offer for another big American newspaper chain, Lee . 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. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. (Freeman denied this through a spokesperson.) Gerry Smith. He used his own money to pull court records, and went years without going on a vacation. To replace a paper like the Sun would require a large, talented staff that covers not just government, but sports and schools and restaurants and art. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. In Orlando, the Sentinel ran an editorial pleading with the community to deliver us from Alden and comparing the hedge fund to a biblical plague of locusts. In Allentown, Pennsylvania, reporters held reader forums where they tried to instill a sense of urgency about the threat Alden posed to The Morning Call. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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 . "[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. But for all the theatrics, his marching orders were always the same: Cut more. I felt like a terrible reporter because I couldnt get to everything.. This is a subscription-based business.. 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." Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. "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?" 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). Its a hedge that went and bought up some titles that it milks for cash.. We must finally require the online tech behemoths, such as Google, Apple, and Facebook, to fairly compensate us for our original news content, he told me. This is predatory.. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Freeman never responded. 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. To be sure, the Knight Foundation does much to help promote and sustain local news. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. 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. 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. 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. But even for a group of journalists, it was tough to keep the publics attention. The shows premise pits two couples against each other for the chance to win a home. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Hellman and BNP together own 46.4 per cent of Allfunds' shares. This was the core of Freemans argument. . 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. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. [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. He stops talking to the press, refuses to be photographed, and rarely appears in public. But Glidden felt sure he knew the real reason: Alden wanted him gone. Senior lenders under the deal were to swap debt for stock. It is the nations second-largest newspaper owner by circulation. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 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. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. Or to Denver, where the Posts staff was cut by two-thirds, evicted from its newsroom, and relocated to a plant in an area with poor air quality, where some employees developed breathing problems. 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. Alden completed its takeover of the Tribune papers in May. [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. Yes, today, it's a newspaper without a newsroom. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. But a sense of fatalism permeated the work. 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. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. [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. 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. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. When it was over, a quarter of the newsroom was gone. 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. 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. It was founded in 2007 by Randall D. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. 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. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. 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. . MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. He gained 100 pounds and started grinding his teeth at night. The 5 global Trends in Journalism: 1 We've moved from a world where media organizations were gatekeepers to a world where media still creates the news agenda, but platform companies control access to audiences 2 this move to digital media generally does not generate filter bubbles Instead automated Serendipity + incidental exposure drive people . [10][19][20], The company has its origins in R.D. Instead, the money was used to finance the hedge funds other ventures. When a reporter asked if their work was still valued, the editor sounded deflated. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. But I had underestimated how little Aldens founders care about their standing in the journalism world. The hollowing-out of the Chicago Tribune was noted in the national press, of course. 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 bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. 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. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. The pitch had a certain romantic appeal to the reporters in the room. 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. 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. 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. All good works, and Knight is to be commended 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 for about $141 million. As a young man, hed studied at divinity school before taking over his fathers company, and decades later he still carried a healthy sense of noblesse oblige. Its hard to imagine theyd show, anyway. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. 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. [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. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. 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 term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. 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. 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 for . Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. 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. But that would require slow, painstaking workand there are easier ways to make money. 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. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. Ken Kelleher is an American sculptor. Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. The question was how. On more than one occasion, according to people I spoke with, he asked aloud, What do all these people do? According to the former executive, Freeman once suggested in a meeting that Aldens newspapers could get rid of all their full-time reporters and rely entirely on freelancers. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. . Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. By Julie Reynolds. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. Like many alumni of the Sun, Simon is steeped in the papers history. Alden's holdings already spanned the country, including the . [33], Alden Global Capital's management of American newspapers has been criticized. By the 1980s, this strategy has made Randy luxuriously wealthyvacations in the French Riviera, a family compound outside New York Cityand he has begun to school his children on the wonders of capitalism. , 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. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. 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. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. 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. about two hundred American newspapers. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. On . Its not the name or the flag., He may get his wish. he asks. Today, we know that Knight, CalPERS and others no longer invest with Alden. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. The 1% own and operate the . Next up: Chicago, Baltimore, and the New York Daily News. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. For two men who employ thousands of journalists, remarkably little is known about them. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Since Alden's . 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 Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. Have you heard of the hedge fund Alden Global Capital? 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. 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. 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. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. How do you know who wins? the boy asks. I asked. 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. [10] With its acquisition of Tribune Publishing in late May 2021, Alden is collectively the second-largest owner of newspapers in the United States, as calculated by average daily print circulation, second only to Gannett.
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