[21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Alden is in the business of making money, not journalism. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. 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. They had a father-figure relationship, one told me. John Temple: My newspaper died 10 years ago. Maybe this obscure hedge fund had a plan. Alden Global Capital, the hedge fund that owns the Chicago Tribune and New York Daily News, offered to buy Lee Enterprises Inc. for about $142 million, seeking a larger share of the . Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. Lee Enterprises, the owner of daily newspapers in Winston-Salem and Greensboro, this morning rejected a hedge fund's proposal to take over the company. When the city-hall reporter left a few months later, he picked up that beat too. Below are highlights from his conversation with Morning Edition's A Martnez. I felt like a terrible reporter because I couldnt get to everything.. To him, its the same as oil, the publisher said. Updated May 21, 2021 at 2:13 PM ET. He was fired after criticizing Alden in a Washington Post interview. "[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. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. He can cite decades-old scoops and tell you whom they pissed off. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. 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. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. 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 all, it has a long and venerable history of supporting local news. When he did, he exhibited a casual contempt for the journalists who worked there. Its hard to imagine theyd show, anyway. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." "[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. "The question is, will local communities decide that this is an important issue, that it's worth saving these newspapers, protecting them from firms like Alden, or will they decide that they don't really care?" By Julie Reynolds. 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. He declined to meet me in person or to appear on Zoom. 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. 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 the group that jumps out to me on the list is the John S. and James L. Knight Foundation. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. These papers would have been liquidated if not for us stepping up.. I put the question to Freeman, but he declined to answer on the record. To be sure, the Knight Foundation does much to help promote and sustain local news. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. 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. 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. 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. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. 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. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. This investment strategy does not come without social consequences. Before our interview, Id contacted a number of Aldens reporters to find out what they would ask their boss if they ever had the chance. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. He gained 100 pounds and started grinding his teeth at night. Misinformation proliferates. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. 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. 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. "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.". 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. "[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. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. Smith. As a reporter whos 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 Americas largest newspaper chains? The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. Former Knight-Ridder headquarters. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. But even for a group of journalists, it was tough to keep the publics attention. 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? People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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. It financed the deal with the help of Cerberusa private-equity firm that owned, among other businesses, the security company that trained Saudi operatives who participated in the murder of the journalist Jamal Khashoggi. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. Or to nearby Monterey, where the former Herald reporter Julie Reynolds says staffers were pushed to stop writing investigative features so they could produce multiple stories a day. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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. 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. Lee, which owns the St. Louis Post Dispatch, the Omaha World-Herald and many other daily newspapers throughout the region, is staving off a takeover attempt by Alden Global Capital, a New-York . The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Im worried the worst is yet to come. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. In the past 15 years, more than a quarter of American newspapers have gone out of business. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. At their worst, they used their papers to maintain oppressive social hierarchies. 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. Now he was feeling the effects of their management. At one point, he told me, the citys entire civil-service commission was abruptly fired without explanation; his sources told him something fishy was going on, but he knew hed never be able to run down the story. 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. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. If accepted, the $24 per share purchase price would . Morale tanked; reporters burned out. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. 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. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). 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 . He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Alden's holdings already spanned the country, including the . [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. They are also defined by an obsessive secrecy. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. 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. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. But that's not true for all of them. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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. (Freeman denied this through a spokesperson.) What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. Alden, which already owned one-third of . 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. But for all the theatrics, his marching orders were always the same: Cut more. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. The Ubiquity - The student news site of Quartz Hill High School But this acquisition was profound, making Alden Global . Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. 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 . 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. 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. It felt important. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. [2] Its managing director is Heath Freeman. 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. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. Collectively, they control about one-half of daily newspapers in the U.S. The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen beforeromance in stone and steel, as one writer described it. Today, we know that Knight, CalPERS and others no longer invest with Alden. 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. This all seemed especially relevant considering many Alden/DFM papers were previously part of the Knight-Ridder chain, the family news empire from which the foundation sprang. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. about two hundred American newspapers. 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. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. From the March 1914 issue: H. L. Mencken on newspaper morals, A story circulated throughout the companypossibly apocryphal, though no one could say for surethat when Freeman was informed that The Denver Post had won a Pulitzer in 2013, his first response was: Does that come with any money?. As a young man, hed studied at divinity school before taking over his fathers company, and decades later he still carried a healthy sense of noblesse oblige. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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. It was clear that they didnt care about this being a business in the future. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal.
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