As a privately held hedge fund, Alden doesnt have to reveal much to the public. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. ", "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? 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 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. 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 . Lee Enterprises, the owner of daily newspapers in Winston-Salem and Greensboro, this morning rejected a hedge fund's proposal to take over the company. 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. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. 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. 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. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Feb. 16, 2021 8:04 PM PT. 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. 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. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. 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. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden 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. I felt like a terrible reporter because I couldnt get to everything.. Some have even suggested that this represents Americas last chance to save its local-news industry. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. 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. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. With full control of Tribune Publishing, Alden Global Capital is scrambling to squeeze out a return on its $600 million investment in the struggling Chicago-based newspaper company. Below are highlights from his conversation with Morning Edition's A Martnez. 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. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Smith & Company. That gave the journalists at the Sun a brief window to stop the sale from going through. Send any friend a story As a subscriber, you . Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. At the same time, he increased subscription prices in many markets; it would take awhile for subscribersmany of them older loyalists who didnt carefully track their billsto notice that they were paying more for a worse product. Have you heard of the hedge fund Alden Global Capital? But for all the theatrics, his marching orders were always the same: Cut more. 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. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. 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? 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. 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. Inside Alden Global Capital. Its a hedge that went and bought up some titles that it milks for cash.. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. 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. I put the question to Freeman, but he declined to answer on the record. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. A vulture doesnt hold a wounded animals head underwater. 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 . In the Hyatt meeting, Ted Venetoulis, a former Baltimore politician, advised the reporters to pick a noisy public fight: Set up a war room, circulate petitions, hold events to rally the city against Alden. 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?. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. 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 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?" He had spoken on this issue before, and it was easy to see why. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. [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. In the past 15 years, more than a quarter of American newspapers have gone out of business. 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. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. Alden Global Capital, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, has proposed purchasing Lee Enterprises, the Iowa-based owner of the Richmond Times-Dispatch and most other major Virginia newspapers, for approximately $144 million, Alden announced Monday. When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. Alden's holdings already spanned the country, including the . In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. If accepted, the $24 per share purchase price would . Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. Lee's board of directors . He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. 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. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. 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 played with my mind a little bit, Glidden told me. 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. But even for a group of journalists, it was tough to keep the publics attention. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. One, the warning shot was fired in 2011, in a Poynter Institute article titled Who is investor Randall Smith and why is he buying up newspaper companies? Randall Smith is the co-founder of Alden, together with his young protg, Heath Freeman, and has been called the grandfather of vulture investing. Vulture funds by definition dont reinvest in their properties they suck them dry. Alden is in the business of making money, not journalism. 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. On more than one occasion, according to people I spoke with, he asked aloud, What do all these people do? According to the former executive, Freeman once suggested in a meeting that Aldens newspapers could get rid of all their full-time reporters and rely entirely on freelancers. To him, its the same as oil, the publisher said. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. The show draws from a book written by a Sun reporter, and Simon was quick to point out that the paper still has good journalists covering important stories. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. They are also defined by an obsessive secrecy. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. But whats happening in Chicago is different. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. 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. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. I asked Knight about those investments and whether the Foundations officers had any regrets, knowing what we now do about Aldens devastating effect on its own newspapers. He declined to meet me in person or to appear on Zoom. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. He was fired after criticizing Alden in a Washington Post interview. Instead, they gutted the place. 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. he asks. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. 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. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. 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. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and theyd gotten there by dismantling local journalism. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. 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. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. 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. 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.