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To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. 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. 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. When it was over, a quarter of the newsroom was gone. Connecting this to the current state of American newspaper ownership seems rather tenuous.. At the same time, he increased subscription prices in many markets; it would take awhile for subscribersmany of them older loyalists who didnt carefully track their billsto notice that they were paying more for a worse product. Meanwhile, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. 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. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. 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. 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. 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 . We were like, Theyre not going to take our newspaper from us! Like many alumni of the Sun, Simon is steeped in the papers history. Hellman and BNP together own 46.4 per cent of Allfunds' shares. . 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, the Hedge Fund Killing Newspapers - The Atlantic It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. 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. Somehow, no one's buying it. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. You can bypass most soft paywalls with a little CSS knowledge But that's not true for all of them. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . By McKay Coppins. The endorsement debate swings around again - Columbia Journalism Review 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. [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. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. . But even for a group of journalists, it was tough to keep the publics attention. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. 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. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. Shares of Lee Enterprises Inc. rose sharply Monday after hedge fund Alden Global Capital LLC offered to buy the newspaper publisher for about $141 million. 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.). [2] Its managing director is Heath Freeman. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. PDF GateHouse Media Alden Global Capital Tribune Media McClatchy Lee This is predatory.. The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Smith. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired 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. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Youd be surprised. Senior lenders under the deal were to swap debt for stock. 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. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. What happens next? Send any friend a story As a subscriber, you . Today, we know that Knight, CalPERS and others no longer invest with Alden. They could be vain, bumbling, even corrupt. He gained 100 pounds and started grinding his teeth at night. 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.. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. 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. 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. On the surface, the answer might seem obvious. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Aldens commitment to cost-cutting as a badge of honorthe thing that distinguished him from the saps and cowards who made up Americas previous generation of newspaper owners. But by 2013, despite deep losses to Alden funds overall values in the previous two years, Smith was able to begin buying his now infamous swath of South Florida mansions for $58 million and Freeman was acquiring multi-million-dollar New York condos. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. Smith & Company. A native of Vallejo, he was proud to work for his hometown paper. But there are some clues here and there. That may well be the future of local news, he says. Lee Enterprises holds off an Alden takeoverfor now [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. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. Tuesday, 23 November 2021 07:46 PM EST. I asked if anyone there at the time was aware of Aldens vulture business strategy. Freeman never responded. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 Instead, the money was used to finance the hedge funds other ventures. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. (PDF) Extractive Imperialism in the Americas | henry veltmeyer 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 . A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. 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. 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. Spend some time around the shell-shocked journalists at the Tribune these days, and youll hear the same question over and over: How did it come to this? Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. 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. Module 5- Journalism.pdf - Journalism Modules - The 5 Ws "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. 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. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Maybe this obscure hedge fund had a plan. 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. 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. Hedge fund Alden Global Capital, known for making deep newsroom cuts, won approval to acquire Tribune Publishing, which includes the Chicago Tribune, The Baltimore Sun and New York Daily News. 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. Digital First Media - Wikipedia 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. Who Profits From Alden Global Capital? You'd be surprised. John Temple: My newspaper died 10 years ago. 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. 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. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . [10] With its acquisition of Tribune Publishing in late May 2021, Alden is collectively the second-largest owner of newspapers in the United States, as calculated by average daily print circulation, second only to Gannett. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper So what is this Distressed Opportunities fund? "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Its not the name or the flag., He may get his wish. [15][16] In March 2018, Margaret Sullivan, the media columnist for The Washington Post, called Alden "one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism. (Freeman has, in the past, disputed Bainums account of the negotiations.) 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 . Two days after the deal was finalized, Alden announced an aggressive round of buyouts. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys - NPR He used his own money to pull court records, and went years without going on a vacation. 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. No response came back. It . 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. 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. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. 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. The vulture is hungry again: Alden Global Capital wants to buy a few [2] Its managing director is Heath Freeman. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . 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. He was fired after criticizing Alden in a Washington Post interview. When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. Alden is known for . Who Profits From Alden Global Capital? The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. 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. [8][24] Tribune Publishing publishes nine major metropolitan dailies. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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. On Monday, Dail Or to Denver, where the Posts staff was cut by two-thirds, evicted from its newsroom, and relocated to a plant in an area with poor air quality, where some employees developed breathing problems. 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 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. 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. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. In the Hyatt meeting, Ted Venetoulis, a former Baltimore politician, advised the reporters to pick a noisy public fight: Set up a war room, circulate petitions, hold events to rally the city against Alden. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, Alden is in the business of making money, not journalism. 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Hedge fund Alden's bid for owner of Virginian-Pilot, Daily Press Dec 9, 2021. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. 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. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. If accepted, the $24 per share purchase price would . (Freeman denied this through a spokesperson.) [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. 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. What's in the fine print in Alden's offer to takeover Tribune? - The This was the core of Freemans argument. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. To be sure, the Knight Foundation does much to help promote and sustain local news. 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 . Alden Global Looks to Buy Newspaper Publisher Lee Enterprises But a sense of fatalism permeated the work. 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. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Controversial hedge fund Alden Global wins bidding for Chicago Tribune 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 . Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. It emphasizes supporting the emergence of new, sustainable models for local news, through both grantmaking and research, Sherry told me, including grant programs for nonprofit news organizations. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? Alden Global Capital, the New York hedge fund that bought Tribune Publishing this year, said on Monday that it was making an offer for another big American newspaper chain, Lee . Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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.