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Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Its not the name or the flag., He may get his wish. 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. Some people believe that local newspapers will eventually be replaced by new publications, which Coppins describes as "built from the ground-up for the digital era." [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. 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. Around this time, Randy becomes preoccupied with privacy. 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. But for Simon, that paper exists entirely in the past. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. 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. Heath hopes the well never runs dry, but hes going to keep pumping until it does. The question was how. 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 . It . Scott Olson/Getty Images It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. 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. 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. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Its a hedge that went and bought up some titles that it milks for cash.. Yes, today, it's a newspaper without a newsroom. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." 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.. Misinformation proliferates. The firm has a history of purchasing newspapers to cut costs wherever . [2] Its managing director is Heath Freeman. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. The newsroom was moved to a single room rented from the local chamber of commerce. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. In the past 15 years, more than a quarter of American newspapers have gone out of business. 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. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. 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. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. After weeks of back-and-forth, he agreed to a phone call, but only if parts of the conversation could be on background (which is to say, I could use the information generally but not attribute it to him). When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. Margaret Sullivan: The Constitution doesnt work without local news. A month after he started, one of his fellow reporters left and Glidden was asked to start covering schools in addition to his other responsibilities. "[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. [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. Already the largest shareholder . Theres little evidence that Alden cares about the sustainability of its newspapers. 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. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. Layout design was outsourced to freelancers in the Philippines. Some have even suggested that this represents Americas last chance to save its local-news industry. Since Alden's . This investment strategy does not come without social consequences. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. ", "Denver Post Rebels Against Its Hedge-Fund Ownership", "Tribune Says Sale to Alden Wins Approval Amid Confusion Over Key Shareholder's Vote", "Lee Enterprises Shares Jump on Takeover Offer From Alden", "The vulture is hungry again: Alden Global Capital wants to buy a few hundred more newspapers", "Colorado Group Pushes to Buy Embattled Denver Post From New York Hedge Fund", "The battle for Tribune: Inside the campaign to find new owners for a legendary group of newspapers", "Is this strip-mining or journalism? 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. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. The shows premise pits two couples against each other for the chance to win a home. The pitch had a certain romantic appeal to the reporters in the room. "60 Minutes" correspondent Jon Wertheim did a strong piece that aired Sunday night about the grim state of local newspapers, in part because of how hedge funds, such as Alden Global Capital . He had spoken on this issue before, and it was easy to see why. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? I put the question to Freeman, but he declined to answer on the record. 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. One conclusions even these reporters are hesitant to make is that we are all dealing within a capitalist system which has none, or few, principles to guide itself, apart from making a profit, no matter how. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. Maybe this obscure hedge fund had a plan. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. Somehow, no one's buying it. 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 . 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 . By Julie Reynolds. 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. 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 we dont know, because they arent saying. [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. Smith began investing in newspapers and media around the same time. 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. They are also defined by an obsessive secrecy. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . This is a subscription-based business.. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! AP. He took particular pride in finding novel ways to give away his family fortune, funding child-poverty initiatives in Baltimore and prenatal care for women in Liberia. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. | Michael Gray, WIkimedia Commons. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. Connecting this to the current state of American newspaper ownership seems rather tenuous.. 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. Heath Freeman in an undated photo provided by Goldin Solutions . But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. It makes me profoundly sad to think about what the Trib was, what it is, and what its likely to become, says David Axelrod, who was a reporter at the paper before becoming an adviser to Barack Obama. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. Morale tanked; reporters burned out. Former Knight-Ridder headquarters. 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. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. In the face of that setback, Alden said it would turn to the tactic of filing a proxy statement asking the company's shareholders to vote no on board members Mary Junck and Herbert Moloney during the March 2022 board elections. 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. 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. "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?" 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. 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. If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. "Local newspaper brands and operations are the engines that power trusted local news in communities across the United States," Heath Freeman, president of Alden Global Capital, said in a . 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. [8][24] Tribune Publishing publishes nine major metropolitan dailies. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. Some of these papers likely would have been liquidated if the fund had not stepped in to buy them, as Alden's president told Coppins. 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. 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. The hollowing-out of the Chicago Tribune was noted in the national press, of course. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. Those that have survived are smaller, weaker, and more vulnerable to acquisition. But that's not true for all of them. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. But this acquisition was profound, making Alden Global . To many, it just didnt seem possible that Alden would instead choose to destroy newspapers by laying off the workforce en masse and stripping papers of all their assets. Smith. Senior lenders under the deal were to swap debt for stock. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. But there are some clues here and there. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. 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. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. He can cite decades-old scoops and tell you whom they pissed off. 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. 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. Its a game, Randy explains to his son. Other records turned up from public pension funds and filings of publicly traded companies. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. 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. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. I asked if anyone there at the time was aware of Aldens vulture business strategy. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. 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?. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. 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. Collectively, they control about one-half of daily newspapers in the U.S. The practical effect of the death of local journalism is that you get what weve had, he told me, which is a halcyon time for corruption and mismanagement and basically misrule.. Inside Alden Global Capital. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. [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. Instead, they gutted the place. Alden is in the business of making money, not journalism. Coordinated by . By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. 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 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. Alden currently owns 32%. 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. Since they bought their first newspapers a decade ago, no one has been more mercenary or less interested in pretending to care about their publications long-term health. What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. In legal filings, Alden has acknowledged diverting hundreds of millions of dollars from its newspapers into risky bets on commercial real estate, a bankrupt pharmacy chain, and Greek debt bonds. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. He was fired after criticizing Alden in a Washington Post interview. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? Read: What we lost when Gannett came to town. 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. This was the core of Freemans argument. 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. Smith & Company. He teaches his 8-year-old son, Caleb, to make trades on a Quotron computer, and imparts the value of delayed gratification by reportedly postponing his familys Christmas so that he can use all their available cash to buy stocks at lower prices in December. Have you heard of the hedge fund Alden Global Capital? (Freeman has, in the past, disputed Bainums account of the negotiations.) Ken Kelleher is an American sculptor. 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. They want to know who exactly profits when we learn, as Harvard Nieman Labs Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media newspapers. The Ubiquity - The student news site of Quartz Hill High School The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. . Its hard to imagine theyd show, anyway. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. It was founded in 2007 by Randall D. Smith. 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. John Temple: My newspaper died 10 years ago. Well, that wasnt the point. A century later, the Tribune Tower has retained its grandeur. 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. 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 . 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. A group of 11 community newspapers owned by Red Wing Publishing Co. have been sold to MediaNews Group, owner of the St. Paul Pioneer Press and more than 100 newspapers across the country. 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. Updated May 21, 2021 at 2:13 PM ET. Hedge fund Alden Global Capital, one of the country's largest newspaper owners with a reputation for intense cost cuts and layoffs, has offered to buy the local newspaper chain Lee Enterprises for about $141 million. 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.