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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. Feb 16, 2021 at 8:05 pm. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. Financially, it was a raw deal. When a reporter asked if their work was still valued, the editor sounded deflated. Read: Local news is dying, and Americans have no idea, From 2015 to 2017, he presided over staff reductions of 36 percent across Aldens newspapers, according to an analysis by the NewsGuild (a union that also represents employees of The Atlantic). This is predatory.. 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. This story originally appeared on the Morning Edition live blog. 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. For two men who employ thousands of journalists, remarkably little is known about them. 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. So who is investing with them? 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. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. . 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. (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. 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 . Some in the city started to wonder if the paper was even worth saving. We were like, Theyre not going to take our newspaper from us! [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. A Cornell grad with an M.B.A., Randy is on a partner track at Bear Stearns, where hes poised to make a comfortable fortune simply by climbing the ladder. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." 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. Collectively, they control about one-half of daily newspapers in the U.S. 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. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. Aldens calculus was simple. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. Alden currently owns 32%. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. 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. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. [10][19][20], The company has its origins in R.D. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. The shows premise pits two couples against each other for the chance to win a home. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. Many of the operators were looking at the newspaper business as a local advertising business, he said, and we didnt believe that was the right way to look at it. The pay was terrible and the work was not glamorous, but Glidden loved his job. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. Freeman was only slightly more accessible. 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 . 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. 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. 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. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. But beneath all the recriminations and infighting was a cruel reality: When faced with the likely decimation of the countrys largest local newspapers, most Americans didnt seem to care very much. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. 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. 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. 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. Media . I asked if anyone there at the time was aware of Aldens vulture business strategy. 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. Smith & Company. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. But even for a group of journalists, it was tough to keep the publics attention. At their worst, they used their papers to maintain oppressive social hierarchies. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. 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. Morale tanked; reporters burned out. He stops talking to the press, refuses to be photographed, and rarely appears in public. Now it might be facing extinction. The pitch had a certain romantic appeal to the reporters in the room. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. I asked. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. The firm has a history of purchasing newspapers to cut costs wherever . In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. 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 . He teaches his 8-year-old son, Caleb, to make trades on a Quotron computer, and imparts the value of delayed gratification by reportedly postponing his familys Christmas so that he can use all their available cash to buy stocks at lower prices in December. At the Pioneer Press , where its staff is down to 60, the paper produced a . 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. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. But this acquisition was profound, making Alden Global . 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. 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. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. 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. Scott Olson/Getty Images But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. [33], Alden Global Capital's management of American newspapers has been criticized. My answer is its hard to know. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. Hellman and BNP together own 46.4 per cent of Allfunds' shares. How do you know who wins? the boy asks. But in the case of local news, nothing comparable is ready to replace these papers when they die. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. 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. What threatens local newspapers now is not just digital disruption or abstract market forces. Instead, they gutted the place. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. 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. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. A recent Financial Times analysis found that half of all daily newspapers in the U.S. are controlled by financial firms, and Coppins says that number is all but certain to keep growing. [7][8] Alden's purchase price was $635 million, or $17.25 per share. 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. My question was did Knight know what Alden was doing to newspapers when it invested with the hedge fund, and does it regret that investment now? [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. 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. Gerry Smith. [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. 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. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. Tuesday, 23 November 2021 07:46 PM EST. 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. Inside Alden Global Capital. 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 . Heath hopes the well never runs dry, but hes going to keep pumping until it does. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Aldens commitment to cost-cutting as a badge of honorthe thing that distinguished him from the saps and cowards who made up Americas previous generation of newspaper owners. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. 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. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. but sadly on a global scale there is hardly any independent news sources left currently. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. (Freeman has, in the past, disputed Bainums account of the negotiations.) 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Senior lenders under the deal were to swap debt for stock. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. The Denver Post has become the face of this struggle, due to an editorial published in its own pages lashing out against owners, New York-based 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. 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. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. The scene was somehow even grimmer than Id imagined. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. "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?" At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. AP. It was clear that they didnt care about this being a business in the future. But as an organization that believes that quality information is essential for individuals and communities to make their own bestchoices, it was disappointing that the foundation couldnt simply own up to its error in judgment when it came to Alden. Alden Global Capital has currently bid to buy all of Tribune. They are also defined by an obsessive secrecy. "60 Minutes" correspondent Jon Wertheim did a strong piece that aired Sunday night about the grim state of local newspapers, in part because of how hedge funds, such as Alden Global Capital . Of course, its easy to romanticize past eras of journalism. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. * Edited from 'independent . What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. 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.. Hedge fund Alden Global Capital, known for making deep newsroom cuts, won approval to acquire Tribune Publishing, which includes the Chicago Tribune, The Baltimore Sun and New York Daily News. He was fired after criticizing Alden in a Washington Post interview. Next up: Chicago, Baltimore, and the New York Daily News. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. The hollowing-out of the Chicago Tribune was noted in the national press, of course. I felt like a terrible reporter because I couldnt get to everything.. Below are highlights from his conversation with Morning Edition's A Martnez. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. 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. But he has a big idea: He believes theres serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. (Freeman denied this through a spokesperson.) 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. He can cite decades-old scoops and tell you whom they pissed off. 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. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. Read: What we lost when Gannett came to town. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. But a sense of fatalism permeated the work. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. "[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. As a privately held hedge fund, Alden doesnt have to reveal much to the public. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. 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. But that's not true for all of them. 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. 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 . [3] [4] With its acquisition of Tribune Publishing in late . "[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. [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. 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. When the sale failed to attract a sufficiently high offer, Freeman turned his attention to squeezing as much cash out of the newspapers as possible. A native of Vallejo, he was proud to work for his hometown paper. 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. 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. 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. If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. But Glidden felt sure he knew the real reason: Alden wanted him gone. But that would require slow, painstaking workand there are easier ways to make money. 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. ", "The most feared owner in American journalism looks set to take some of its greatest assets", "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty', "What does the Chicago Tribune sale mean for the future of newsrooms? A vulture doesnt hold a wounded animals head underwater. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. 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 . Baltimore has always had its problems, he told me. 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. Alden Global Capital revealed a proposal Monday to purchase Lee Enterprise Inc. and its newspapers at $24 a share, casting alarm through the many newsrooms owned by Lee. Coordinated by . These papers would have been liquidated if not for us stepping up.. 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. When the city-hall reporter left a few months later, he picked up that beat too. 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.

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