Instead, the money was used to finance the hedge funds other ventures. 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. But whats happening in Chicago is different. 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. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. When a reporter asked if their work was still valued, the editor sounded deflated. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. He gained 100 pounds and started grinding his teeth at night. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Instead, they gutted the place. 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. Dec 9, 2021. Well, that wasnt the point. hide caption. 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. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. Probably not.. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. 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. 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%. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. By Julie Reynolds. Alden Global Capital had recently purchased a nearly one-third stake in the Suns parent company, Tribune Publishing, and the firm was signaling that it would soon come for the rest. Today, we know that Knight, CalPERS and others no longer invest with Alden. 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. Have you heard of the hedge fund Alden Global Capital? And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. Connecting this to the current state of American newspaper ownership seems rather tenuous.. Yes, today, it's a newspaper without a newsroom. 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. NPR reached out to Alden for a response. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. 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 . Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. Am I going to win against capitalism in America? "[21], shareholder rights plan, colloquially known as a "poison pill", "Alden Global Capital LLC NEW YORK , NY", "Company Overview of Alden Global Capital LLC", "Heath Freeman of Alden Global Capital says he wants to save local news. 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. I felt like a terrible reporter because I couldnt get to everything.. My answer is its hard to know. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. Two veteran journalists from the Chicago Tribune published an op-ed on Sunday challenging one of the paper's principal owners, the New York hedge fund Alden Global Capital. It was clear that they didnt care about this being a business in the future. A look at Alden Global Capital is the cover story of the latest . 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?. Inside Alden Global Capital. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. He had spoken on this issue before, and it was easy to see why. 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. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. 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. Otherwise, youre just peeing in the ocean.. 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. [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. On the surface, the answer might seem obvious. What threatens local newspapers now is not just digital disruption or abstract market forces. 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. 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.. Maybe this obscure hedge fund had a plan. The question was how. The firm has a history of purchasing newspapers to cut costs wherever . 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 . But Glidden felt sure he knew the real reason: Alden wanted him gone. But this acquisition was profound, making Alden Global . But we dont know, because they arent saying. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. The New York-based hedge fund Alden Global Capital - known for slashing its newspapers' budgets to extract escalated profits - won shareholder approval Friday for its $633 million bid to acquire the Tribune Publishing newspaper chain.. 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. But he has a big idea: He believes theres serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. 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 . Alden is in the business of making money, not journalism. . Baltimore has always had its problems, he told me. As a privately held hedge fund, Alden doesnt have to reveal much to the public. 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. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. So who is investing with them? Convinced that the Sun wont be able to provide the kind of coverage the city needs, he has set out to build a new publication of record from the ground up. This story originally appeared on the Morning Edition live blog. Freeman was only slightly more accessible. 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. But outside the industry, few seemed to notice. Send any friend a story As a subscriber, you . The Denver Post has become the face of this struggle, due to an editorial published in its own pages lashing out against owners, New York-based hedge fund Alden Global Capital. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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. 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 two men who employ thousands of journalists, remarkably little is known about them. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. 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. 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. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. 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. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. To him, its the same as oil, the publisher said. Alden, which already owned one-third of . 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. These papers would have been liquidated if not for us stepping up.. 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. On Monday, Dail and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . When Alden first got into the news business, Freeman seemed willing to indulge some innovation. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. 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. 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. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Some in the city started to wonder if the paper was even worth saving. Heath Freeman in an undated photo provided by Goldin Solutions . At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. Plus how Facebook is a hostile foreign power, the engineers daughter, the collapse of music genres, Dostoyevsky, W. G. Sebald, nasty return logistics, and more. 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. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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 . Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. 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. Former Knight-Ridder headquarters. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. If you went into a lab to create the perfect bro, Heath would be that creation, says one former executive at an Alden-owned company, who, like others in this story, requested anonymity to speak candidly. [13], In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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.). "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. City budgets balloon, along with corruption and dysfunction. . . Morale tanked; reporters burned out. Of course, its easy to romanticize past eras of journalism. Some have even suggested that this represents Americas last chance to save its local-news industry. After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his fathers death. For a fleeting moment, Aldens newspapers became unexpected darlings of the journalism industrywritten about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. It played with my mind a little bit, Glidden told me. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. Its hard to imagine theyd show, anyway. This is predatory.. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. The 1% own and operate the . [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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. As the months passed, things kept getting worse. 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. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. 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. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. 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. about two hundred American newspapers. 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. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. | Michael Gray, WIkimedia Commons. Theres little evidence that Alden cares about the sustainability of its newspapers. 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? 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. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. A Secretive Hedge Fund Is Gutting Newsrooms. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters ability to sort the honest politicians from the political whores by exposing abuses of power. 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. Around this time, Randy becomes preoccupied with privacy. 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. , 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. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. The hollowing-out of the Chicago Tribune was noted in the national press, of course. Senior lenders under the deal were to swap debt for stock. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. It hurts to see the paper like this, he told her. Scott Olson/Getty Images The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. The 5 global Trends in Journalism: 1 We've moved from a world where media organizations were gatekeepers to a world where media still creates the news agenda, but platform companies control access to audiences 2 this move to digital media generally does not generate filter bubbles Instead automated Serendipity + incidental exposure drive people . I asked if anyone there at the time was aware of Aldens vulture business strategy. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Hellman and BNP together own 46.4 per cent of Allfunds' shares. 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. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Enter the email address you signed up with and we'll email you a reset link. Media . 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. A native of Vallejo, he was proud to work for his hometown paper. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. And everyone knows its going to run dry.. 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 . Next up: Chicago, Baltimore, and the New York Daily News. At the end of last month, Alden Global Capital, a notorious newspaper-owning hedge fund, sought to stake its claim on one of the last newspaper chains it hasn't yet touched: Lee Enterprises, which owns 90 publications across the country.Alden, which currently owns six percent of Lee's stock, sent an unsolicited offer to purchase the newspaper chain for $24 per share. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. 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. He says he visited the Tribune's office and was "really shocked by how grim the scene was." 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. he asks. 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. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Vallejo deserves better. A few weeks after the story came out, he was fired. . But as long as Alden had made back its money, the investment would be a success. [2] Its managing director is Heath Freeman. 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. I put the question to Freeman, but he declined to answer on the record. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Those that have survived are smaller, weaker, and more vulnerable to acquisition. Now he was feeling the effects of their management. 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. It is the nations second-largest newspaper owner by circulation. When The New York Times profiles him in 1991, it notes that he excels at profiting from other peoples misery and quotes a parade of disgruntled clients and partners. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. One tagline he was considering was Marylands Best Newsroom., When I asked, half in jest, if he planned to raid the Sun to staff up, he responded with a muted grin. Who is investor Randall Smith and why is he buying up newspaper companies, deep losses to Alden funds overall values, Denver Post newsroom workers invoke Thirst Amendment to raise awareness about conditions under Alden, Pittsburgh newspaper workers are making history, The NewsGuild urges public pension funds to divest from Cerberus, NewsGuild to Lee Shareholders: Reject Aldens Vote No Campaign. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. Ken Kelleher is an American sculptor. All good works, and Knight is to be commended for them. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. Collectively, they control about one-half of daily newspapers in the U.S. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. In a news release Monday, Alden said it sent Lee's board a letter with the offer. He can cite decades-old scoops and tell you whom they pissed off. Smith. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. 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. But that would require slow, painstaking workand there are easier ways to make money. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. 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. [7][8] Alden's purchase price was $635 million, or $17.25 per share. 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 . It turned out that those ownersNew York hedge funders whom Glidden took to calling the lizard peoplewere laser-focused on increasing the papers profit margins. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? 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.