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Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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 model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self. Alden, a New York City-based firm that has become the grim reaper of American newspapers, had recently increased its stake in Tribune Publishing to 32%making it the largest shareholder of the . Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper "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.". The newsroom was moved to a single room rented from the local chamber of commerce. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. 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. That may well be the future of local news, he says. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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. 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. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. It played with my mind a little bit, Glidden told me. Well, that wasnt the point. They were very tight. Freeman has resisted elaborating on his relationship with Smith, saying simply that they were family friends before going into business together. If you want to know what its like when Alden Capital buys your local newspaper, you could look to Montgomery County, Pennsylvania, where coverage of local elections in more than a dozen communities falls to a single reporter working out of his attic and emailing questionnaires to candidates. Alden Launches $142 Million Bid for Publisher Lee Enterprises Instead, they gutted the place. A Secretive Hedge Fund Is Gutting Newsrooms. Why Chicago Tribune Staffers Are Terrified Of Their Hedge Fund - Forbes The Alden Global Capital . 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. 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. Smith & Company. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. 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. A century later, the Tribune Tower has retained its grandeur. By Julie Reynolds. 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. So who is investing with them? Connecting this to the current state of American newspaper ownership seems rather tenuous.. 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 . Inside Alden Global Capital. 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. Former Knight-Ridder headquarters. Digital First Media - Wikipedia Layout design was outsourced to freelancers in the Philippines. In its bid to acquire Tribune Publishing, the hedge fund Alden Global Capital vowed to provide $375 million in cash to the owner of the Chicago Tribune, the Baltimore Sun and other titles a . It has not, however, retained the Chicago Tribune. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. 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. 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. They had a father-figure relationship, one told me. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. Hedge fund Alden's bid to buy Chicago Tribune, other papers approved by Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. 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.. 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. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. But that would require slow, painstaking workand there are easier ways to make money. Freeman was only slightly more accessible. Now it might be facing extinction. Alden Global Capital, the Hedge Fund Killing Newspapers - The Atlantic 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. Vallejo deserves better. A few weeks after the story came out, he was fired. 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. The shadow of hedge fund and corporate ownership leaves newsrooms in 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. The 1% own and operate the . [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. This company that owns us now seems to still be prettyI dont even know how to put it, the editor said, according to a recording of the meeting obtained by The Atlantic. ", "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? Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. "[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. 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. 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. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Live news updates from February 28: Tesla to build Mexico - ft.com [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. It has figured out how to make a profit by driving newspapers into the ground, he says, since Alden's aim is not to make them into long-term sustainable businesses but rather maximize profits quickly to show it has made a winning investment. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. "[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. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. It felt important. 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. 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. How Alden Global Capital will make money owning Tribune Publishing When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. 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. He gained 100 pounds and started grinding his teeth at night. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. 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. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. I felt like a terrible reporter because I couldnt get to everything.. 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. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. I put the question to Freeman, but he declined to answer on the record. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. The 21st century has seen many of these generational owners flee the industry, to devastating effect. A spokesman took issue with the entirety of the story, and laid out a long list of questions attacking the integrity of the reporter, The Atlantic and some of his sources without addressing some of the more specific claims within the report. 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. 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. But as long as Alden had made back its money, the investment would be a success. A native of Vallejo, he was proud to work for his hometown paper. 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-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. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. hide caption. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. Its hard to imagine theyd show, anyway. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. On . Financially, it was a raw deal. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. When hed agreed to the interview, Id expected him to say the things he was supposed to saythat the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. For two men who employ thousands of journalists, remarkably little is known about them. Below are highlights from his conversation with Morning Edition's A Martnez. 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.. Hedge fund known for cutting journalism jobs is seeking to buy - CNN The hollowing-out of the Chicago Tribune was noted in the national press, of course. Aldens calculus was simple. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. 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. The Tribune had been profitable when Alden took over. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers web and mobile offerings and increased online ad revenue. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. Aldens Distressed Opportunities Fund was launched in 2008 and saw astounding success in its first few months, showing returns of more than 30 percent a big rescue for Alden, whose investments in Russia the year before had lost more than 61 percent of their value. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. But Glidden felt sure he knew the real reason: Alden wanted him gone. No response came back. Youd be surprised. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. Alden is known for . He was fired after criticizing Alden in a Washington Post interview. 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. Denver Post reporters vs 'vulture capitalist' hedge fund Alden - CNBC The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. When a reporter asked if their work was still valued, the editor sounded deflated. Hedge fund Alden in hunt for another big newspaper chain 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. 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. Alden gradually took control of the papers that would become DFM. Alden completed its takeover of the Tribune papers in May. Iowa's Lee Enterprises seeks help to fight Alden's takeover bid Alden Global Capital - Wikipedia 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. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. In the past 15 years, more than a quarter of American newspapers have gone out of business. [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. Tuesday, 23 November 2021 07:46 PM EST. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . Two days after the deal was finalized, Alden announced an aggressive round of buyouts. Media . It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. 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 . Otherwise, youre just peeing in the ocean.. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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. 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. '60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. "[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. It was clear that they didnt care about this being a business in the future. The question was how. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. On the surface, the answer might seem obvious. 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 . [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. 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. For those who cared about the future of local news, it was hard to imagine a better outcomewhich made it all the more devastating when the bid fell through. 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 is buying newspaper chain Tribune Publishing These include the Chicago Tribune, the New York Daily News, and The Baltimore Sun. The shows premise pits two couples against each other for the chance to win a home. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. Next up: Chicago, Baltimore, and the New York Daily News. G ARY MARX and David Jackson, two veteran investigative reporters at the Chicago Tribune, spent most of last year seeking potential buyers who might save their newspaper from Alden Global Capital . Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). It was founded in 2007 by Randall D. Smith. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. But that's not true for all of them. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. 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. City budgets balloon, along with corruption and dysfunction. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. Hellman and BNP together own 46.4 per cent of Allfunds' shares. Its a game, Randy explains to his son. Live news: US manufacturing sector contracts for fourth straight month Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. It seemed reasonable to ask that they answer a few questions. [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 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.). 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. By McKay Coppins. 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.