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Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. The pitch had a certain romantic appeal to the reporters in the room. It felt important. 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. When he did, he exhibited a casual contempt for the journalists who worked there. A look at Alden Global Capital is the cover story of the latest . It was founded in 2007 by Randall D. Nov. 22, 2021. 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. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . It . 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. AP. Its a hedge that went and bought up some titles that it milks for cash.. 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. It seemed reasonable to ask that they answer a few questions. ", "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? [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. 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 conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. As a reporter whos covered Alden Global Capital for more than two years, people often ask me who are the investors behind the hedge fund that owns one of Americas largest newspaper chains? 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. Youd be surprised. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. 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. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. 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. 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. But whats happening in Chicago is different. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . 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. [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. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. Heath hopes the well never runs dry, but hes going to keep pumping until it does. 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. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. 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. 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. 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. 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. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. A vulture doesnt hold a wounded animals head underwater. 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. But Glidden felt sure he knew the real reason: Alden wanted him gone. 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. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. But for all the theatrics, his marching orders were always the same: Cut more. 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). The details of how Smith got to know him are opaque, but the resulting loyalty was evident. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Alden's holdings already spanned the country, including the . 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. A quarter of the newsroom (including many big-name reporters, columnists and photographers) took the buyouts Alden offered, and while some great reporters remain on staff, it's nearly impossible for them to fill those gaps, Coppins says. (Freeman has, in the past, disputed Bainums account of the negotiations.) So Freeman pivoted. 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. . On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. 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. 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 . [10][19][20], The company has its origins in R.D. He used his own money to pull court records, and went years without going on a vacation. Updated May 21, 2021 at 2:13 PM ET. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. 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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Like many alumni of the Sun, Simon is steeped in the papers history. He gained 100 pounds and started grinding his teeth at night. A group of 11 community newspapers owned by Red Wing Publishing Co. have been sold to MediaNews Group, owner of the St. Paul Pioneer Press and more than 100 newspapers across the country. | Michael Gray, WIkimedia Commons. He wrote, "Alden Global Capital has eliminated the jobs of scores of reporters and editors, and decimated journalism in cities all over the country: Denver, Boston, San Jose, Trenton, etc. 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. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. But I had underestimated how little Aldens founders care about their standing in the journalism world. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. * Edited from 'independent . 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. The Tribune had been profitable when Alden took over. 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. 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. 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. But this acquisition was profound, making Alden Global . His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. 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. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. 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. Alden, which already owned one-third of . The scene was somehow even grimmer than Id imagined. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. 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 . I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. The hollowing-out of the Chicago Tribune was noted in the national press, of course. Its a game, Randy explains to his son. 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.. 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 . California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, To him, its the same as oil, the publisher said. 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. 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. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters ability to sort the honest politicians from the political whores by exposing abuses of power. "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 . "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. Research shows that when local newspapers disappear or are dramatically gutted, communities tend to see lower voter turnout, increased polarization, a general erosion of civic engagement and an environment in which misinformation and conspiracy theories can spread more easily. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. 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. but sadly on a global scale there is hardly any independent news sources left currently. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. The 21st century has seen many of these generational owners flee the industry, to devastating effect. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Freeman never responded. 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. They could be vain, bumbling, even corrupt. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. 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 . If you want to know what its like when Alden Capital buys your local newspaper, you could look to Montgomery County, Pennsylvania, where coverage of local elections in more than a dozen communities falls to a single reporter working out of his attic and emailing questionnaires to candidates. As a privately held hedge fund, Alden doesnt have to reveal much to the public. 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. Somehow, no one's buying it. City budgets balloon, along with corruption and dysfunction. . 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. To be sure, the Knight Foundation does much to help promote and sustain local news. But in the case of local news, nothing comparable is ready to replace these papers when they die. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. [8][24] Tribune Publishing publishes nine major metropolitan dailies. Some in the city started to wonder if the paper was even worth saving. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. 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. 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. 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. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. All good works, and Knight is to be commended for them. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. That gave the journalists at the Sun a brief window to stop the sale from going through. 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. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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. 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. Alden Global Capital, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, has proposed purchasing Lee Enterprises, the Iowa-based owner of the Richmond Times-Dispatch and most other major Virginia newspapers, for approximately $144 million, Alden announced Monday. 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. Coordinated by . Freeman was only slightly more accessible. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. 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. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. 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. 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. This was the core of Freemans argument. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom.