In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. 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. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. "[34], In October 2021, The Atlantic examined the impact of Alden's acquisition of the Chicago Tribune, noting that, "The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? He says he visited the Tribune's office and was "really shocked by how grim the scene was." 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. He declined to meet me in person or to appear on Zoom. 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 . Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. [2] Its managing director is Heath Freeman. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. Alden Global Capital is a hedge fund based in Manhattan, New York City. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. Heath Freeman in an undated photo provided by Goldin Solutions . On . This is predatory.. Scott Olson/Getty Images 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 for . | Michael Gray, WIkimedia Commons. Layout design was outsourced to freelancers in the Philippines. The Ubiquity - The student news site of Quartz Hill High School Many of the operators were looking at the newspaper business as a local advertising business, he said, and we didnt believe that was the right way to look at it. On the surface, the answer might seem obvious. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Aldens calculus was simple. Inside Alden Global Capital. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. 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.). he asks. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. Smith. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Its a game, Randy explains to his son. 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%. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. 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. It has not, however, retained the Chicago Tribune. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. 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's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. 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. 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.. A vulture doesnt hold a wounded animals head underwater. Margaret Sullivan: The Constitution doesnt work without local news. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. But whats happening in Chicago is different. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. It felt important. Alden Global Capital, a New York-based hedge fund that this year became the second largest newspaper publisher in the United States, has made an offer to purchase Lee Enterprises, the media company that owns 75 daily newspapers, including the St. Louis Post-Dispatch. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. 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. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. Instead, the money was used to finance the hedge funds other ventures. What happens next? It is a subsidiary of Alden Global Capital, the New York City hedge fund that backed the purchase of and dramatic cost-cutting at more than 100 newspapers causing more than 1,000 lost jobs. (Freeman denied this characterization through a spokesperson. 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. In recent months, hes been meeting with leaders of local-news start-ups across the countryThe Texas Tribune, the Daily Memphian, The City in New Yorkand collecting best practices. 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. Convinced that the Sun wont be able to provide the kind of coverage the city needs, he has set out to build a new publication of record from the ground up. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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 owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. . His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. After all, it has a long and venerable history of supporting local news. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. To him, its the same as oil, the publisher said. The model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self. 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. According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement.