Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. Aldens calculus was simple. . Next up: Chicago, Baltimore, and the New York Daily News. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. 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. During its five-year run with Alden, it seems quite unlikely that no one at Knight knew about the hedge funds slash-and-burn strategy for two reasons. 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. We were like, Theyre not going to take our newspaper from us! The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Freeman was only slightly more accessible. Theres little evidence that Alden cares about the sustainability of its newspapers. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . 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. Ken Kelleher is an American sculptor. Have you heard of the hedge fund Alden Global Capital? Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? The New York-based hedge fund Alden Global Capital - known for slashing its newspapers' budgets to extract escalated profits - won shareholder approval Friday for its $633 million bid to acquire the Tribune Publishing newspaper chain.. [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. Already the largest shareholder . (Freeman denied this characterization through a spokesperson. 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. [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. 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. 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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. 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. Smith & Company. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. But by 2013, despite deep losses to Alden funds overall values in the previous two years, Smith was able to begin buying his now infamous swath of South Florida mansions for $58 million and Freeman was acquiring multi-million-dollar New York condos. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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%. But in the case of local news, nothing comparable is ready to replace these papers when they die. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. Maybe this obscure hedge fund had a plan. When the city-hall reporter left a few months later, he picked up that beat too. October 14, 2021. 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. So I was more than a little shocked to learn that, according to its tax filings, Knight had invested $13 million with Aldens Distressed Opportunities Fund by 2010 and kept investing through 2014. 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. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. 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. 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. That's because the fund is stepping in to buy and then gut newsrooms across the country. 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 . [2] Its managing director is Heath Freeman. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . 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. Feb. 16, 2021 8:04 PM PT. Youd be surprised. By Julie Reynolds. But whats happening in Chicago is different. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. Since Alden's . Heath Freeman in an undated photo provided by Goldin Solutions . The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen beforeromance in stone and steel, as one writer described it. , 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. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. 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. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . 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. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. 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. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. From the March 1914 issue: H. L. Mencken on newspaper morals, A story circulated throughout the companypossibly apocryphal, though no one could say for surethat when Freeman was informed that The Denver Post had won a Pulitzer in 2013, his first response was: Does that come with any money?. 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. Around this time, Randy becomes preoccupied with privacy. A native of Vallejo, he was proud to work for his hometown paper. 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. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. but sadly on a global scale there is hardly any independent news sources left currently. 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. Senior lenders under the deal were to swap debt for stock. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. He had spoken on this issue before, and it was easy to see why. 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. 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. 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. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. Alden, which already owned one-third of . In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. "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.". 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. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. 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. 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. I asked if anyone there at the time was aware of Aldens vulture business strategy. Read: What we lost when Gannett came to town. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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. 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. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. In its bid to acquire Tribune Publishing, the hedge fund Alden Global Capital vowed to provide $375 million in cash to the owner of the Chicago Tribune, the Baltimore Sun and other titles a . Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. [3] [4] With its acquisition of Tribune Publishing in late . Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow.