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. Well, that wasnt the point. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. One researcher tells me that if that money were invested in the S&P 500 Index Fund, it would have earned roughly $11 million over the same period. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. 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. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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. Ken Kelleher - Creative Director / Artist - LinkedIn [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . 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. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. When a reporter asked if their work was still valued, the editor sounded deflated. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. 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. Next up: Chicago, Baltimore, and the New York Daily News. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. 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.. 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. After all, it has a long and venerable history of supporting local news. 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. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. Alden Global Capital has currently bid to buy all of Tribune. 'Sobs, gasps, expletives' over latest Denver Post layoffs", "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat", "How Massive Cuts Have Remade The Denver Post", "Newsonomics: By selling to Americas worst newspaper owners, Michael Ferro ushers the vultures into Tribune", "A Secretive Hedge Fund Is Gutting Newsrooms", "Affiliated Media Files for Bankruptcy to Restructure (Update2)", "The shakeup at MediaNews: Why it could be the leadup to a massive newspaper consolidation", "Alden Global Capital to buy Tribune in deal valued at $630 million", "Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover", "Lee Enterprises Board Rejects Alden's Acquisition Offer", "Alden Global Capital takes Lee Enterprises to court over failed board nominations", "Alden Global Capital sues Lee Enterprises after rejected takeover bid", "Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board", "Lee Enterprises shareholders reelect three directors amid hedge fund fight", "Tampa Bay Times sells printing plant to developer for $21 million", "A hedge fund's 'mercenary' strategy: Buy newspapers, slash jobs, sell the buildings", "The hedge fund trying to buy Gannett faces federal probe after investing newspaper workers' pensions in its own funds", https://en.wikipedia.org/w/index.php?title=Alden_Global_Capital&oldid=1130942589, This page was last edited on 1 January 2023, at 19:27. 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. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. "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.". City budgets balloon, along with corruption and dysfunction. 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 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 . Am I going to win against capitalism in America? That's because the fund is stepping in to buy and then gut newsrooms across the country. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. He used his own money to pull court records, and went years without going on a vacation. 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. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. Updated May 21, 2021 at 2:13 PM ET. Alden Global Capital, the Hedge Fund Killing Newspapers - The Atlantic . Enter the email address you signed up with and we'll email you a reset link. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. 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. It . 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. 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. Financially, it was a raw deal. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. Ken Kelleher is an American sculptor. Alden currently owns 32%. The vulture is hungry again: Alden Global Capital wants to buy a few The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. 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. 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 . he asks. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. He gained 100 pounds and started grinding his teeth at night. 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. This is predatory.. Alden Global Capital makes an offer for Lee Enterprises, a big It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. This was the core of Freemans argument. 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. He says he visited the Tribune's office and was "really shocked by how grim the scene was." Hedge fund known for cutting journalism jobs is seeking to buy - CNN Its hard to imagine theyd show, anyway. For those who cared about the future of local news, it was hard to imagine a better outcomewhich made it all the more devastating when the bid fell through. Some have even suggested that this represents Americas last chance to save its local-news industry. Alden Global Capital - Wikipedia 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. 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. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. You can bypass most soft paywalls with a little CSS knowledge What happens next? About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. They want to know who exactly profits when we learn, as Harvard Nieman Labs Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media newspapers. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. | Michael Gray, WIkimedia Commons. NPR reached out to Alden for a response. 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. 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. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. Hedge fund Alden Global is buying newspaper chain Tribune Publishing 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. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. Who Profits From Alden Global Capital? 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. . Fears for future of American journalism as hedge funds flex power The scene was somehow even grimmer than Id imagined. Its a hedge that went and bought up some titles that it milks for cash.. To him, its the same as oil, the publisher said. It wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. 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. They could be vain, bumbling, even corrupt. 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. By the 1980s, this strategy has made Randy luxuriously wealthyvacations in the French Riviera, a family compound outside New York Cityand he has begun to school his children on the wonders of capitalism. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. Already the largest shareholder . He stops talking to the press, refuses to be photographed, and rarely appears in public. 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 shows premise pits two couples against each other for the chance to win a home. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. PDF GateHouse Media Alden Global Capital Tribune Media McClatchy Lee 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. 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. 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 . 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. But by 2014, it was becoming clear to Aldens executives that Patons approach would be difficult to monetize in the short term, according to people familiar with the firms thinking. How this 'vulture' hedge fund's gutting of local newsrooms could hurt We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and theyd gotten there by dismantling local journalism. It seemed reasonable to ask that they answer a few questions. The hollowing-out of the Chicago Tribune was noted in the national press, of course. "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. Well, he told me, they have some very good reporters., This article appears in the November 2021 print edition with the headline The Men Who Are Killing Americas Newspapers., A Secretive Hedge Fund Is Gutting Newsrooms, I Dont Know That I Would Even Call It Meth Anymore, W. G. Sebald Ransacked Jewish Lives for His Fictions. 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. Now it might be facing extinction. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. They want to know who exactly profits when we learn, as Harvard Nieman Lab's Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media . Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. 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%. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. ", "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? Coordinated by . To replace a paper like the Sun would require a large, talented staff that covers not just government, but sports and schools and restaurants and art. I asked. 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.
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