Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Its not the name or the flag., He may get his wish. The shows premise pits two couples against each other for the chance to win a home. Its World War II correspondent brought firsthand news of Nazi concentration camps to American readers; its editorial page had the power to make or break political careers in Maryland. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. Feeling burned by the hedge fund, Bainum decided to make a last-minute bid for all of Tribune Publishings newspapers, pledging to line up responsible buyers in each market. 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. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. Media . Knight began selling off its Alden holdings in 2012, and got completely out in 2014. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Financially, it was a raw deal. . Next up: Chicago, Baltimore, and the New York Daily News. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. 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. Who Profits From Alden Global Capital? The Tampa Bay Times has sold its printing plant at 1301 34th St. N to a real estate arm of Alden Global Capital, a New York hedge fund that is the second-largest newspaper owner in the country. Connecting this to the current state of American newspaper ownership seems rather tenuous.. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. This is a subscription-based business.. "[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. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. After a contentious presidential race and amid a still-raging pandemic, there was a limited supply of outrage and sympathy to spare for local reporters. 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. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. 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. But that's not true for all of them. 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. Alden Global Capital revealed a proposal Monday to purchase Lee Enterprise Inc. and its newspapers at $24 a share, casting alarm through the many newsrooms owned by Lee. City budgets balloon, along with corruption and dysfunction. 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's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. It was clear that they didnt care about this being a business in the future. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." Those that have survived are smaller, weaker, and more vulnerable to acquisition. 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. But this acquisition was profound, making Alden Global . By Julie Reynolds. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. It was founded in 2007 by Randall D. Smith. '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. And everyone knows its going to run dry.. . 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 . According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. Freeman never responded. 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. 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. The rationale offered by the board was, Consistent with its fiduciary duties, Lees Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Aldens unsolicited proposal to acquire Lee. Heath Freeman in an undated photo provided by Goldin Solutions . But a sense of fatalism permeated the work. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. [27] The Alden lawsuit asserts that the members of the Lee board "have every reason to maintain the status quo and their lucrative corporate positions" and that they are "focused more on [their] own power than what's best for the company. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. How do you know who wins? the boy asks. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. 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.. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. He declined to meet me in person or to appear on Zoom. Gerry Smith. Smith. The papers printing was moved to a plant more than 100 miles outside town, Glidden told me, which meant that the news arriving on subscribers doorsteps each morning was often more than 24 hours old. When a reporter asked if their work was still valued, the editor sounded deflated. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. Randy claims no editorial role in the Press, and his investment in the projectwhich has little chance of producing the kind of return hes accustomed tocould be chalked up to brotherly loyalty. A century later, the Tribune Tower has retained its grandeur. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. This is predatory.. 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. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. 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. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldnt manipulate, and the photographer who had produced beautiful portraits of the states undocumented immigrants, and the investigative reporter whod helped expose the governors offshore shell companies. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. 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. Its a hedge that went and bought up some titles that it milks for cash.. Like many alumni of the Sun, Simon is steeped in the papers history. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. Some in the city started to wonder if the paper was even worth saving. 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. All good works, and Knight is to be commended for them. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. On Monday, Dail In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. 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. Smith & Company. (Freeman denied this through a spokesperson.) It is the nations second-largest newspaper owner by circulation. 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. As the months passed, things kept getting worse. Read: What we lost when Gannett came to town. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. . On the surface, the answer might seem obvious. 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. 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. 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. 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 . 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. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in creative destruction, dismantling outmoded businesses to make room for more innovative insurgents. 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. Alden completed its takeover of the Tribune papers in May. 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. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. 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. , 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. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. 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. Already the largest shareholder . "[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. By McKay Coppins. 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.. 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. Its not as if the Tribune is just withering on the vine despite the best efforts of the gardeners, Charlie Johnson, a former Metro reporter, told me after the latest round of buyouts this summer. 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. 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. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. I asked if anyone there at the time was aware of Aldens vulture business strategy. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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 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. The pitch had a certain romantic appeal to the reporters in the room. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. he asks. 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. When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. 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. That gave the journalists at the Sun a brief window to stop the sale from going through. hide caption. 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 . He can cite decades-old scoops and tell you whom they pissed off. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. For two men who employ thousands of journalists, remarkably little is known about them. Send any friend a story As a subscriber, you . We must finally require the online tech behemoths, such as Google, Apple, and Facebook, to fairly compensate us for our original news content, he told me. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. 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.