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. 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. 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. Smith & Company. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. Enter the email address you signed up with and we'll email you a reset link. AP. Alden's holdings already spanned the country, including the . After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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. 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. Hellman and BNP together own 46.4 per cent of Allfunds' shares. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Baltimore has always had its problems, he told me. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. . At the same time, he increased subscription prices in many markets; it would take awhile for subscribersmany of them older loyalists who didnt carefully track their billsto notice that they were paying more for a worse product. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. It hurts to see the paper like this, he told her. 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. (Freeman denied this through a spokesperson.) 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. [7][8] Alden's purchase price was $635 million, or $17.25 per share. , 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. 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. They are also defined by an obsessive secrecy. Financially, it was a raw deal. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. But we dont know, because they arent saying. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. As the months passed, things kept getting worse. 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. "[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. . Its a hedge that went and bought up some titles that it milks for cash.. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. A native of Vallejo, he was proud to work for his hometown paper. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. The Ubiquity - The student news site of Quartz Hill High School NPR reached out to Alden for a response. A century later, the Tribune Tower has retained its grandeur. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. 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. With full control of Tribune Publishing, Alden Global Capital is scrambling to squeeze out a return on its $600 million investment in the struggling Chicago-based newspaper company. 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. Now it might be facing extinction. Next up: Chicago, Baltimore, and the New York Daily News. Alden Global Capital is a hedge fund based in Manhattan, New York City. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. A look at Alden Global Capital is the cover story of the latest . Lee's board of directors . [10][19][20], The company has its origins in R.D. [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. 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, 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. 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. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. 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. With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the countrys most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News. The pitch had a certain romantic appeal to the reporters in the room. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Tuesday, 23 November 2021 07:46 PM EST. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. 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. A Secretive Hedge Fund Is Gutting Newsrooms. But if you really started fucking up in grandiose and belligerent ways, if you started stealing and grifting and lying, eventually somebody would come up behind you and say, Youre grifting and youre lying and theyd put it in the paper., The bad stuff runs for so long now, he went on, that by the time you get to it, institutions are irreparable, or damn near close., Take away the newsroom packed with meddling reporters, and a city loses a crucial layer of accountability. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. But for all the theatrics, his marching orders were always the same: Cut more. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. They could be vain, bumbling, even corrupt. 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. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. We were like, Theyre not going to take our newspaper from us! He was fired after criticizing Alden in a Washington Post interview. Margaret Sullivan: The Constitution doesnt work without local 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. 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. Craigslist killed the Classified section, Google and Facebook swallowed up the ad market, and a procession of hapless newspaper owners failed to adapt to the digital-media age, making obsolescence inevitable. On the surface, the answer might seem obvious. Here was one of Americas most storied newspapersa publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizesreduced to a newsroom the size of a Chipotle. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. "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.". 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. To be sure, the Knight Foundation does much to help promote and sustain local news. 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. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. 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. 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. . 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. 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. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. G ARY MARX and David Jackson, two veteran investigative reporters at the Chicago Tribune, spent most of last year seeking potential buyers who might save their newspaper from Alden Global Capital . Alden completed its takeover of the Tribune papers in May. Alden Global Capital already had a 32% stake in Tribune Publishing, which owns famous names like the Tribune, Daily News, the Hartford Courant and others, and on Tuesday announced it would pay . 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. . 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. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. It was founded in 2007 by Randall D. Im worried the worst is yet to come. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. So Freeman pivoted. I asked if anyone there at the time was aware of Aldens vulture business strategy. This all seemed especially relevant considering many Alden/DFM papers were previously part of the Knight-Ridder chain, the family news empire from which the foundation sprang. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. 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. I asked Knight about those investments and whether the Foundations officers had any regrets, knowing what we now do about Aldens devastating effect on its own newspapers. Smith began investing in newspapers and media around the same time. When the city-hall reporter left a few months later, he picked up that beat too. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. Alden Global Capital is a hedge fund based in Manhattan, New York City. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. Aldens calculus was simple. After all, it has a long and venerable history of supporting local news. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. On . 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 . In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. He used his own money to pull court records, and went years without going on a vacation. [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. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. Its not as if the Tribune is just withering on the vine despite the best efforts of the gardeners, Charlie Johnson, a former Metro reporter, told me after the latest round of buyouts this summer. Alden Global Capital, a hedge fund known for gutting local newsrooms, is seeking to buy Lee Enterprises (LEE), a publicly traded company with a chain of daily newspapers and other publications . Alden is in the business of making money, not journalism. 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.). Am I going to win against capitalism in America? This is the story weve been telling for decades about the dying local-news industry, and its not without truth. Maybe this obscure hedge fund had a plan. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Who Profits From Alden Global Capital? While some finance reporters noted that Smiths newspaper investments were all losing value, none seemed to notice that Smith and Aldens president Heath Freeman would soon start strip mining their news companies real estate and other assets. So who is investing with them? 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. In a news release Monday, Alden said it sent Lee's board a letter with the offer. 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. 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 . Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. Before our interview, Id contacted a number of Aldens reporters to find out what they would ask their boss if they ever had the chance. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. 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. 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. 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 . 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. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. about two hundred American newspapers. 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. When it was over, a quarter of the newsroom was gone. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . [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 former Sun reporter whose work on the police beat famously led to his creation of The Wire on HBO, Simon told me the paper had suffered for years under a series of blundering corporate ownersand it was only a matter of time before an enterprise as cold-blooded as Alden finally put it out of its misery. 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. This is predatory.. But that would require slow, painstaking workand there are easier ways to make money. Youd be surprised. 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. But that's not true for all of them. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. Many in the journalism industry, watching lawsuits play out in Australia and Europe, have held out hope in recent years that Google and Facebook will be compelled to share their advertising revenue with the local outlets whose content populates their platforms. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldnt manipulate, and the photographer who had produced beautiful portraits of the states undocumented immigrants, and the investigative reporter whod helped expose the governors offshore shell companies. The Tampa Bay Times has sold its printing plant at 1301 34th St. N to a real estate arm of Alden Global Capital, a New York hedge fund that is the second-largest newspaper owner in the country. When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. 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. But in the case of local news, nothing comparable is ready to replace these papers when they die. 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. [2] Its managing director is Heath Freeman. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. 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. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. The newsroom was moved to a single room rented from the local chamber of commerce. 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. The firm has a history of purchasing newspapers to cut costs wherever . Below are highlights from his conversation with Morning Edition's A Martnez. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. 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.
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