It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. But by 2014, it was becoming clear to Aldens executives that Patons approach would be difficult to monetize in the short term, according to people familiar with the firms thinking. 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. Enter the email address you signed up with and we'll email you a reset link. He stops talking to the press, refuses to be photographed, and rarely appears in public. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. Alden, which owns more than 200 newspapers across the country, has developed a reputation for using extensive layoffs and severe cost cuts at the newspapers it owns. | Michael Gray, WIkimedia Commons. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. AP. Gerry Smith. To be sure, the Knight Foundation does much to help promote and sustain local news. 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. [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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. What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. We were like, Theyre not going to take our newspaper from us! Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. Clearly, for Smith and Freeman, chop-shopping their newspapers paid 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. 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. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. But he says the worst culprit is the hedge fund Alden Global Capital, which bought the Mercury in 2011 and has since sold the paper's building and slashed newsroom staff by about 70%. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. When I asked Freeman what he thought was broken about the newspaper industry, he launched into a monologue that was laden with jargon and light on insightsummarizing what has been the conventional wisdom for a decade as though it were Aldens discovery. Tuesday, 23 November 2021 07:46 PM EST. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. All good works, and Knight is to be commended for them. Margaret Sullivan: The Constitution doesnt work without local news. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. (Freeman has, in the past, disputed Bainums account of the negotiations.) Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. 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.). Two days after the deal was finalized, Alden announced an aggressive round of buyouts. 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. For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. But that's not true for all of them. 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. 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. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. When a reporter asked if their work was still valued, the editor sounded deflated. 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. 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. Maybe this obscure hedge fund had a plan. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. 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. 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. Alden Global Capital had recently purchased a nearly one-third stake in the Suns parent company, Tribune Publishing, and the firm was signaling that it would soon come for the rest. It makes me profoundly sad to think about what the Trib was, what it is, and what its likely to become, says David Axelrod, who was a reporter at the paper before becoming an adviser to Barack Obama. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? Alden is known for . City budgets balloon, along with corruption and dysfunction. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. 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. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. 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. Like many alumni of the Sun, Simon is steeped in the papers history. They had a father-figure relationship, one told me. He can cite decades-old scoops and tell you whom they pissed off. 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 . [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Am I going to win against capitalism in America? 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. 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 . It has not, however, retained the Chicago Tribune. 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. 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. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. 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. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. * Edited from 'independent . But whats happening in Chicago is different. 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. 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. 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. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. By 2011, when Aldens Distressed Opportunities Fund lost more than 20 percent of its value, Knights holdings in the fund were valued at $10.7 million. 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. 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. To many, it just didnt seem possible that Alden would instead choose to destroy newspapers by laying off the workforce en masse and stripping papers of all their assets. Updated May 21, 2021 at 2:13 PM ET. 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 Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . 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. Alden currently owns 32%. 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. Several years later, when Heath was still in his mid-20s, Smith co-founded Alden Global Capital with him, and eventually put him in charge of the firm. hide caption. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. As a privately held hedge fund, Alden doesnt have to reveal much to the public. 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. Alden gradually took control of the papers that would become DFM. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. Collectively, they control about one-half of daily newspapers in the U.S. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . To him, its the same as oil, the publisher said. 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. The newsroom was moved to a single room rented from the local chamber of commerce. Some have even suggested that this represents Americas last chance to save its local-news industry. I asked. Since Alden's . 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). He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. 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. Well, that wasnt the point. Alden Global Capital is a hedge fund based in Manhattan, New York City. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. These papers would have been liquidated if not for us stepping up.. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Heath hopes the well never runs dry, but hes going to keep pumping until it does. I felt like a terrible reporter because I couldnt get to everything.. (Freeman denied this through a spokesperson.) But there are some clues here and there. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. October 14, 2021. The question was how. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. Heath Freeman in an undated photo provided by Goldin Solutions . But even for a group of journalists, it was tough to keep the publics attention. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. How do you know who wins? the boy asks. My answer is its hard to know. 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. 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. 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 . he asks. Yes, today, it's a newspaper without a newsroom. 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.. Prior to the acquisition of the Tribune Company, we purchased substantially all of our newspapers out of bankruptcy or close to liquidation, he told me. 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. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. [7][8] Alden's purchase price was $635 million, or $17.25 per share. 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.
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