[4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. 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. "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.". The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. No response came back. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. The shows premise pits two couples against each other for the chance to win a home. "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. In the Hyatt meeting, Ted Venetoulis, a former Baltimore politician, advised the reporters to pick a noisy public fight: Set up a war room, circulate petitions, hold events to rally the city against Alden. 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. Alden Global Capital has currently bid to buy all of Tribune. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. He used his own money to pull court records, and went years without going on a vacation. 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. The rationale offered by the board was, Consistent with its fiduciary duties, Lees Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Aldens unsolicited proposal to acquire Lee. 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. 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. (Freeman denied this through a spokesperson.) This is predatory.. Around this time, Randy becomes preoccupied with privacy. Its a game, Randy explains to his son. 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. 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. As a privately held hedge fund, Alden doesnt have to reveal much to the public. [10][19][20], The company has its origins in R.D. Today, we know that Knight, CalPERS and others no longer invest with Alden. This investment strategy does not come without social consequences. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. 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. , 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. 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. 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. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. Nov. 22, 2021. After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his fathers death. What happens next? You need real capital to move the needle, he told me. 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. Aldens calculus was simple. The pay was terrible and the work was not glamorous, but Glidden loved his job. One early article, in the trade publication Poynter, suggested that Aldens interest in the local-news business could be seen as flattering and quoted the owner of The Denver Post as saying he had enormous respect for the firm. The pitch had a certain romantic appeal to the reporters in the room. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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 . Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. 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. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. 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. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. 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 . Read: What we lost when Gannett came to town. A century later, the Tribune Tower has retained its grandeur. Smith. 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. ", "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? 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. 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 . 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. John Temple: My newspaper died 10 years ago. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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. 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. Alden's holdings already spanned the country, including the . 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. Lee's board of directors . [4][5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune Publishing and became the second-largest newspaper publisher in the United States. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. I asked if anyone there at the time was aware of Aldens vulture business strategy. 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. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. Hellman and BNP together own 46.4 per cent of Allfunds' shares. Spend some time around the shell-shocked journalists at the Tribune these days, and youll hear the same question over and over: How did it come to this? Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. 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. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. (Freeman has, in the past, disputed Bainums account of the negotiations.) In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. When it was over, a quarter of the newsroom was gone. 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. Collectively, they control about one-half of daily newspapers in the U.S. Hedge fund Alden Global Capital is attempting to acquire Davenport-based Lee Enterprises, one of the country's largest newspaper chains, in all the markings of a hostile takeover. 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 . For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. But in the case of local news, nothing comparable is ready to replace these papers when they die. 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. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? 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. Of course, its easy to romanticize past eras of journalism. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. Alden is known for . The 1% own and operate the . This was the core of Freemans argument. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. (Freeman denied this characterization through a spokesperson. [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.
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