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 . Im repulsed by the incestuous world of New York journalism, he tells New York magazine. The 21st century has seen many of these generational owners flee the industry, to devastating effect. It was clear that they didnt care about this being a business in the future. [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. What threatens local newspapers now is not just digital disruption or abstract market forces. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. Hedge fund Alden Global is buying newspaper chain Tribune Publishing Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. We were like, Theyre not going to take our newspaper from us! In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. 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. But Glidden felt sure he knew the real reason: Alden wanted him gone. Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. What happens next? Last week, Alden Global Capital, the hedge fund notorious for slashing costs at its local titles, came down on the No side of the question, with editorial boards at papers that it owns stating that they will no longer endorse candidates for governor, US senator, or president. The question was how. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. Hes acutely aware of the risksI may end up with egg on my face, he saidbut he believes its worth trying to develop a successful model that could be replicated in other markets. | Michael Gray, WIkimedia Commons. Newspapers Have Been Struggling And Then Came The Pandemic - Forbes Local newsrooms strained by budget-slashing financial firms Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. And everyone knows its going to run dry.. But that's not true for all of them. Alden Global Capital Is Killing the Newsroom - Common Dreams We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. Probably not.. Alden, which already owned one-third of . Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . So Freeman pivoted. Craigslist killed the Classified section, Google and Facebook swallowed up the ad market, and a procession of hapless newspaper owners failed to adapt to the digital-media age, making obsolescence inevitable. [33], Alden Global Capital's management of American newspapers has been criticized. 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.. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. 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. 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. This is predatory.. When he did, he exhibited a casual contempt for the journalists who worked there. 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers its alienating. When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. So what is this Distressed Opportunities fund? At the time, even savvy media insiders like Martin Langeveld wistfully predicted Alden would keep newspapers future in mind: Smith knows that the only way to win his big bet on the future of newspapers is to turn them into nimble, modern digital news enterprises.. 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. 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. 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 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 . Alden is known for . 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. Since Alden's . The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. He had spoken on this issue before, and it was easy to see why. Around this time, Randy becomes preoccupied with privacy. 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. Pioneer Press owner buys 11 more Minnesota papers - Star Tribune Here was one of Americas most storied newspapersa publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizesreduced to a newsroom the size of a Chipotle. As the months passed, things kept getting worse. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. Instead, they gutted the place. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. In a news release Monday, Alden said it sent Lee's board a letter with the offer. "[21], shareholder rights plan, colloquially known as a "poison pill", "Alden Global Capital LLC NEW YORK , NY", "Company Overview of Alden Global Capital LLC", "Heath Freeman of Alden Global Capital says he wants to save local news. Some people believe that local newspapers will eventually be replaced by new publications, which Coppins describes as "built from the ground-up for the digital era." [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. [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. Alden Global Capital aims to buy Lee Enterprises | The Gazette It was founded in 2007 by Randall D. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. The shadow of hedge fund and corporate ownership leaves newsrooms in Media . Now it might be facing extinction. Alden Global to buy Tribune Publishing for $630 million - Los Angeles Times The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. Lee Enterprises rejects Alden Global Capital's unsolicited proposal The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. 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. This investment strategy does not come without social consequences. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Freeman was only slightly more accessible. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Morale tanked; reporters burned out. 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. 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. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. 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? The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. These papers would have been liquidated if not for us stepping up.. Tuesday, 23 November 2021 07:46 PM EST. Alden Global Looks to Buy Newspaper Publisher Lee Enterprises 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. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. A former Sun reporter whose work on the police beat famously led to his creation of The Wire on HBO, Simon told me the paper had suffered for years under a series of blundering corporate ownersand it was only a matter of time before an enterprise as cold-blooded as Alden finally put it out of its misery. 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. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. But in the case of local news, nothing comparable is ready to replace these papers when they die. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. NPR's A Martnez talks to McKay Coppins of The Atlantic about how a hedge fund, Alden Global Capital, is buying and then gutting newspapers and the implications for democracy. 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. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. 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. Smith & Company. 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. Tribune shareholders approve takeover by Alden Global Capital 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. , 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. Hedge fund known for cutting journalism jobs is seeking to buy - CNN 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. Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. Controversial hedge fund Alden Global wins bidding for Chicago Tribune 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. As a reporter who's 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 America's largest newspaper chains?. Hedge fund Alden Global is buying newspaper chain Tribune Publishing 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. But outside the industry, few seemed to notice. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige.