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. Alden Global Capital has currently bid to buy all of Tribune. Alden currently owns 32%. Freeman never responded. "[25], In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today. Other records turned up from public pension funds and filings of publicly traded companies. 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. Now he was feeling the effects of their management. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. Alden-owned newspapers have cut their staff at twice the rate of their competitors, for all of Tribune Publishings newspapers, security company that trained Saudi operatives. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . A look at Alden Global Capital is the cover story of the latest . Morale tanked; reporters burned out. When it was over, a quarter of the newsroom was gone. I asked if anyone there at the time was aware of Aldens vulture business strategy. Gerry Smith. 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. With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the countrys most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News. Alden Global Capital is a hedge fund based in Manhattan, New York City. To be sure, the Knight Foundation does much to help promote and sustain local news. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. The show draws from a book written by a Sun reporter, and Simon was quick to point out that the paper still has good journalists covering important stories. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. 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. Some in the city started to wonder if the paper was even worth saving. 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. 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. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. "[18], Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. 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 . 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. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. Today, we know that Knight, CalPERS and others no longer invest with Alden. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. Freeman was only slightly more accessible. I asked. Tuesday, 23 November 2021 07:46 PM EST. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Like many alumni of the Sun, Simon is steeped in the papers history. The 21st century has seen many of these generational owners flee the industry, to devastating effect. 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. He can cite decades-old scoops and tell you whom they pissed off. By McKay Coppins. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Updated May 21, 2021 at 2:13 PM ET. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. 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. You need real capital to move the needle, he told me. 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. A native of Vallejo, he was proud to work for his hometown paper. Layout design was outsourced to freelancers in the Philippines. Hellman and BNP together own 46.4 per cent of Allfunds' shares. 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. 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. 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 . At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. 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. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Alden is known for . So what is this Distressed Opportunities fund? Maybe this obscure hedge fund had a plan. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Of course, its easy to romanticize past eras of journalism. 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. 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. 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. By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. 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. It seemed reasonable to ask that they answer a few questions. But for Simon, that paper exists entirely in the past. My question was did Knight know what Alden was doing to newspapers when it invested with the hedge fund, and does it regret that investment now? To him, its the same as oil, the publisher said. 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. The firm has a history of purchasing newspapers to cut costs wherever . . On Monday, Dail 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. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. He gained 100 pounds and started grinding his teeth at night. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. But as long as Alden had made back its money, the investment would be a success. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. The scene was somehow even grimmer than Id imagined. 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. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. * Edited from 'independent . What happens next? Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. 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 about $141 million. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. 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. But we dont know, because they arent saying. | Michael Gray, WIkimedia Commons. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. Somehow, no one's buying it. So who is investing with them? These include the Chicago Tribune, the New York Daily News, and The Baltimore Sun. 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. No response came back. In a news release Monday, Alden said it sent Lee's board a letter with the offer. Smith began investing in newspapers and media around the same time. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. "[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. It felt important. 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. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Ken Kelleher is an American sculptor. 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. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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. Instead, they gutted the place. It hurts to see the paper like this, he told her. Former Knight-Ridder headquarters. That's because the fund is stepping in to buy and then gut newsrooms across the country. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. 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. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. Those that have survived are smaller, weaker, and more vulnerable to acquisition. 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. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. He stops talking to the press, refuses to be photographed, and rarely appears in public. 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. A young man named Randall Duncan SmithRandy for shortstands next to his wife, Kathryn, answering quick-fire trivia questions in front of a live studio audience. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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. Misinformation proliferates. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, Since Alden's . [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 is in the business of making money, not journalism. Aldens calculus was simple. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? 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. Coordinated by . Connecting this to the current state of American newspaper ownership seems rather tenuous.. Next up: Chicago, Baltimore, and the New York Daily News. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. On the surface, the answer might seem obvious.
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