He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. When the city-hall reporter left a few months later, he picked up that beat too. 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. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Have you heard of the hedge fund Alden Global Capital? 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. 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. . 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. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. AP. Of course, its easy to romanticize past eras of journalism. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by 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 . 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. Am I going to win against capitalism in America? It is a subsidiary of Alden Global Capital, the New York City hedge fund that backed the purchase of and dramatic cost-cutting at more than 100 newspapers causing more than 1,000 lost jobs. It was clear that they didnt care about this being a business in the future. Media . ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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. This once-proud publication is now owned and run by Alden Global Capital, a multibillion-dollar hedge fund with a long record of buying papers on the cheap, selling off their assets and slashing pay and jobs. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. "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 . 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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. 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. Somehow, no one's buying it. 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. 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. [13], Newspapers in Alden's portfolio include Chicago Tribune, The Denver Post, the St. Paul Pioneer Press, the Boston Herald, The Mercury News, East Bay Times, The Orange County Register, and Orlando Sentinel. 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. But even for a group of journalists, it was tough to keep the publics attention. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. 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 . Alden is in the business of making money, not journalism. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. If Knights total divestment from Alden in 2014 was because someone made an ethical decision to stop dealing with the vulture fund, good for them. Otherwise, youre just peeing in the ocean.. Now it might be facing extinction. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. "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 . According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . Misinformation proliferates. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. They could be vain, bumbling, even corrupt. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. Ken Kelleher is an American sculptor. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. But whats happening in Chicago is different. This was the core of Freemans argument. 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. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. [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. but sadly on a global scale there is hardly any independent news sources left currently. But beneath all the recriminations and infighting was a cruel reality: When faced with the likely decimation of the countrys largest local newspapers, most Americans didnt seem to care very much. He started as a general-assignment reporter, covering local crime and community events. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. Enter the email address you signed up with and we'll email you a reset link. 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. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. 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. Updated May 21, 2021 at 2:13 PM ET. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. It was founded in 2007 by Randall D. In Orlando, the Sentinel ran an editorial pleading with the community to deliver us from Alden and comparing the hedge fund to a biblical plague of locusts. In Allentown, Pennsylvania, reporters held reader forums where they tried to instill a sense of urgency about the threat Alden posed to The Morning Call. One researcher tells me that if that money were invested in the S&P 500 Index Fund, it would have earned roughly $11 million over the same period. 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. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. He declined to meet me in person or to appear on Zoom. It was founded in 2007 by Randall D. Smith. Aldens calculus was simple. 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. 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. 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.. So Freeman pivoted. 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?. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 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. And everyone knows its going to run dry.. 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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. No response came back. Lee's board of directors . [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. "[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. 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. 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.
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