What Alden's potential acquisition of Lee Enterprises means for 20-plus But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. 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. Alden Global Capital has currently bid to buy all of Tribune. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Smith. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). 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 . Hedge fund Alden Global is buying newspaper chain Tribune Publishing 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. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. As a reporter whos covered Alden Global Capital for more than two years, people often ask me who are the investors behind the hedge fund that owns one of Americas largest newspaper chains? . When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. 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. Alden is in the business of making money, not journalism. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. Controversial hedge fund Alden Global wins bidding for Chicago Tribune 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 . To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. Freeman never responded. Hedge fund Alden Global Capital in hunt for Lee Enterprises newspaper 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. Several years later, when Heath was still in his mid-20s, Smith co-founded Alden Global Capital with him, and eventually put him in charge of the firm. I felt like a terrible reporter because I couldnt get to everything.. Alden Global Capital - Wikipedia But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. When the sale failed to attract a sufficiently high offer, Freeman turned his attention to squeezing as much cash out of the newspapers as possible. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. (Freeman has, in the past, disputed Bainums account of the negotiations.) Am I going to win against capitalism in America? Im repulsed by the incestuous world of New York journalism, he tells New York magazine. The specific shareholder rights plan adopted by the Lee board forbids Alden from purchasing more than 10% of the company, and will be in force for one year. In a news release Monday, Alden said it sent Lee's board a letter with the offer. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. But that's not true for all of them. 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. Layout design was outsourced to freelancers in the Philippines. "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 . 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. You need real capital to move the needle, he told me. Tribune shareholders approve takeover by Alden Global Capital [7][8] Alden's purchase price was $635 million, or $17.25 per share. 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. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. Hedge fund Alden in hunt for another big newspaper chain - WKMG "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 . Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. As a reporter who's covered Alden Global Capital for more than two years, people often ask me who are the investors behind the hedge fund that owns one of America's largest newspaper chains?. When it was over, a quarter of the newsroom was gone. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. 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. 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. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. 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. Below are highlights from his conversation with Morning Edition's A Martnez. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune 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. Its hard to imagine theyd show, anyway. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. But I had underestimated how little Aldens founders care about their standing in the journalism world. When a reporter asked if their work was still valued, the editor sounded deflated. (Freeman denied this characterization through a spokesperson. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Maybe this obscure hedge fund had a plan. In the past 15 years, more than a quarter of American newspapers have gone out of business. If accepted, the $24 per share purchase price would . It was founded in 2007 by Randall D. This all seemed especially relevant considering many Alden/DFM papers were previously part of the Knight-Ridder chain, the family news empire from which the foundation sprang. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. 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." 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. 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. 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. 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. Ken Kelleher - Creative Director / Artist - LinkedIn Baltimore has always had its problems, he told me. To be sure, the Knight Foundation does much to help promote and sustain local news. They could be vain, bumbling, even corrupt. qhhsubiquity.com Informacin detallada del sitio web y la empresa 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. By the time the FBI caught them, in 2017, the conspiracy had resulted in one dead civilian and a rash of wrongful arrests and convictions. hide caption. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. 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 . These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. It has not, however, retained the Chicago Tribune. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. Is this company saving newspapers or profiting from their demise? - The What threatens local newspapers now is not just digital disruption or abstract market forces. 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. "[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. Like many alumni of the Sun, Simon is steeped in the papers history. This investment strategy does not come without social consequences. That gave the journalists at the Sun a brief window to stop the sale from going through. 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.). Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. 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. 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 . The newsroom was moved to a single room rented from the local chamber of commerce. Pioneer Press owner buys 11 more Minnesota papers - Star Tribune 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. 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. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. Here was one of Americas most storied newspapersa publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizesreduced to a newsroom the size of a Chipotle. This is predatory.. 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. 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. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. 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. City budgets balloon, along with corruption and dysfunction. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. 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. 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. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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. 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. 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 . Located in the same Manhattan office building as Alden, it funds stem-cell research, health-related charities, arts and culture and Duke University, alma mater of Smiths protg Heath Freeman. With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers its alienating. 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. He declined to meet me in person or to appear on Zoom. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Alden Global Capital aims to buy Lee Enterprises | The Gazette 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. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. . What's in the fine print in Alden's offer to takeover Tribune? - The Today, half of all daily newspapers in the U.S. are controlled by financial firms, according to an analysis by the Financial Times, and the number is almost certain to grow. Alden Global Capital, a New York-based hedge fund that this year became the second largest newspaper publisher in the United States, has made an offer to purchase Lee Enterprises, the media company that owns 75 daily newspapers, including the St. Louis Post-Dispatch. This Is How a Newspaper Dies - POLITICO Magazine 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. | Michael Gray, WIkimedia Commons. One early article, in the trade publication Poynter, suggested that Aldens interest in the local-news business could be seen as flattering and quoted the owner of The Denver Post as saying he had enormous respect for the firm. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. Newspapers Have Been Struggling And Then Came The Pandemic - Forbes Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. But a sense of fatalism permeated the work. Its not the name or the flag., He may get his wish. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. Lee's board of directors . 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. [2] Its managing director is Heath Freeman. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. Alden, which took Chicago-based newspaper chain Tribune Publishing private in May, said it made a proposal to buy Lee for $24 a share in cash, a 30% premium to Friday's closing price for . 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. I asked. Hedge fund Alden in hunt for another big newspaper chain The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Alden's holdings already spanned the country, including the . 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. A native of Vallejo, he was proud to work for his hometown paper. 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.. 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. Read: Local news is dying, and Americans have no idea, From 2015 to 2017, he presided over staff reductions of 36 percent across Aldens newspapers, according to an analysis by the NewsGuild (a union that also represents employees of The Atlantic). The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Alden Global Looks to Buy Newspaper Publisher Lee Enterprises Lee Enterprises rejects Alden Global Capital's unsolicited proposal And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. But this acquisition was profound, making Alden Global . The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. Daily News spinoff stirs anxiety after Alden takeover - New York Post Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. Alden completed its takeover of the Tribune papers in May. A Cornell grad with an M.B.A., Randy is on a partner track at Bear Stearns, where hes poised to make a comfortable fortune simply by climbing the ladder. '60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter The shows premise pits two couples against each other for the chance to win a home. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. 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. But as long as Alden had made back its money, the investment would be a success. but sadly on a global scale there is hardly any independent news sources left currently. Around this time, Randy becomes preoccupied with privacy. "A lot of cities almost operate with the assumption that there will be at least one local newspaper, in some cases several local newspapers, acting as a check on the authorities," he says. Already the largest shareholder . Other records turned up from public pension funds and filings of publicly traded companies. 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). 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. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. Gerry Smith. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. 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 . I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. And everyone knows its going to run dry.. He says he visited the Tribune's office and was "really shocked by how grim the scene was." With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Tampa Bay Times sells printing plant to developer for $21 million Now he was feeling the effects of their management. 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.