Hedge fund Alden in hunt for another big newspaper chain - WKMG 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. AP. Alden Global Capital pushes to reshape Lee Enterprises board It is a subsidiary of Alden Global Capital, the New York City hedge fund that backed the purchase of and dramatic cost-cutting at more than 100 newspapers causing more than 1,000 lost jobs. * Edited from 'independent . Today, we know that Knight, CalPERS and others no longer invest with Alden. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. 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. 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. 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. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. The firm has a history of purchasing newspapers to cut costs wherever . Opinions - Help yourself. Is it ever okay to nick an idea? [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. . As a privately held hedge fund, Alden doesnt have to reveal much to the public. This was the core of Freemans argument. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. If accepted, the $24 per share purchase price would . Controversial hedge fund Alden Global wins bidding for Chicago Tribune Next up: Chicago, Baltimore, and the New York Daily News. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. Some have even suggested that this represents Americas last chance to save its local-news industry. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. So what is this Distressed Opportunities fund? At one point, he told me, the citys entire civil-service commission was abruptly fired without explanation; his sources told him something fishy was going on, but he knew hed never be able to run down the story. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. Or to nearby Monterey, where the former Herald reporter Julie Reynolds says staffers were pushed to stop writing investigative features so they could produce multiple stories a day. Alden is known for . In truth, Freeman didnt seem particularly interested in defending Aldens reputation. 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. 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. But years later, when Randy relocates to Palm Beach and becomes a major donor to Donald Trumps presidential campaign, it will make a certain amount of sense that his earliest known media investment was conceived as a giant middle finger to the journalistic establishment. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. Freeman was only slightly more accessible. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. Coordinated by . [33], Alden Global Capital's management of American newspapers has been criticized. Youd be surprised. 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. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Alden Global Capital is a hedge fund based in Manhattan, New York City. Hedge fund Alden Global is buying newspaper chain Tribune Publishing 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. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. 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 . [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . Around this time, Randy becomes preoccupied with privacy. 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. . Freeman never responded. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. Alden's holdings already spanned the country, including the . He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. When he did, he exhibited a casual contempt for the journalists who worked there. (Freeman denied this characterization through a spokesperson. 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. He was fired after criticizing Alden in a Washington Post interview. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. 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. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. Iowa's Lee Enterprises seeks help to fight Alden's takeover bid 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. It played with my mind a little bit, Glidden told me. You can bypass most soft paywalls with a little CSS knowledge Media . 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. Instead, they gutted the place. He stops talking to the press, refuses to be photographed, and rarely appears in public. 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. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 By Julie Reynolds. One tagline he was considering was Marylands Best Newsroom., When I asked, half in jest, if he planned to raid the Sun to staff up, he responded with a muted grin. Alden Global Capital moves to buy Lee Enterprises, owner of the St Alden Global Capital is buying and gutting local newspapers : NPR - NPR.org 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. But in the case of local news, nothing comparable is ready to replace these papers when they die. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? Financially, it was a raw deal. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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 . No response came back. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. Newspapers Have Been Struggling And Then Came The Pandemic - Forbes Tampa Bay Times sells printing plant to developer for $21 million The model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self. 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. The hollowing-out of the Chicago Tribune was noted in the national press, of course. 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. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. The practical effect of the death of local journalism is that you get what weve had, he told me, which is a halcyon time for corruption and mismanagement and basically misrule.. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. You have no way of knowing that if you dont have some nosy son of a bitch asking a lot of questions down there, he told me. A Secretive Hedge Fund Is Gutting Newsrooms. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Read: What we lost when Gannett came to town. 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. 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 . At the Pioneer Press , where its staff is down to 60, the paper produced a . Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. 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. . 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. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. A search through nonprofit groups publicly available financial reports, commonly known as Form 990s, reveals that all kinds of organizations some surprising have invested their monies with Alden over the years. 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 last month approved a $630m takeover deal with Alden Global Capital. The scene was somehow even grimmer than Id imagined. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. 'Sobs, gasps, expletives' over latest Denver Post layoffs", "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat", "How Massive Cuts Have Remade The Denver Post", "Newsonomics: By selling to Americas worst newspaper owners, Michael Ferro ushers the vultures into Tribune", "A Secretive Hedge Fund Is Gutting Newsrooms", "Affiliated Media Files for Bankruptcy to Restructure (Update2)", "The shakeup at MediaNews: Why it could be the leadup to a massive newspaper consolidation", "Alden Global Capital to buy Tribune in deal valued at $630 million", "Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover", "Lee Enterprises Board Rejects Alden's Acquisition Offer", "Alden Global Capital takes Lee Enterprises to court over failed board nominations", "Alden Global Capital sues Lee Enterprises after rejected takeover bid", "Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board", "Lee Enterprises shareholders reelect three directors amid hedge fund fight", "Tampa Bay Times sells printing plant to developer for $21 million", "A hedge fund's 'mercenary' strategy: Buy newspapers, slash jobs, sell the buildings", "The hedge fund trying to buy Gannett faces federal probe after investing newspaper workers' pensions in its own funds", https://en.wikipedia.org/w/index.php?title=Alden_Global_Capital&oldid=1130942589, This page was last edited on 1 January 2023, at 19:27. 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. Aldens calculus was simple. You need real capital to move the needle, he told me. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. Hedge fund known for cutting journalism jobs is seeking to buy - CNN 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. But for all the theatrics, his marching orders were always the same: Cut more. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. [2] Its managing director is Heath Freeman. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. They could be vain, bumbling, even corrupt. 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. 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. 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. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Who Profits From Alden Global Capital? You'd be surprised. Dec 9, 2021. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. "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. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. 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. A native of Vallejo, he was proud to work for his hometown paper. He says he visited the Tribune's office and was "really shocked by how grim the scene was." What's in the fine print in Alden's offer to takeover Tribune? - The It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. [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. 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. The Alden Global Capital . To him, its the same as oil, the publisher said. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. Plus how Facebook is a hostile foreign power, the engineers daughter, the collapse of music genres, Dostoyevsky, W. G. Sebald, nasty return logistics, and more. 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. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys - NPR 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. 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. The 1% own and operate the . 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. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism.
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