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. That gave the journalists at the Sun a brief window to stop the sale from going through. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. "[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. 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. 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. "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?" Collectively, they control about one-half of daily newspapers in the U.S. 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?. Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. In the past 15 years, more than a quarter of American newspapers have gone out of business. The Tribune had been profitable when Alden took over. Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. But outside the industry, few seemed to notice. 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. (Freeman denied this characterization through a spokesperson. 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.. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. [3] [4] With its acquisition of Tribune Publishing in late . [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. 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. It . Already the largest shareholder . When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. But that's not true for all of them. 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. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. 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. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Aldens calculus was simple. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. At the Pioneer Press , where its staff is down to 60, the paper produced a . Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. 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. "[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. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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. 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. It felt important. . 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. Many in the journalism industry, watching lawsuits play out in Australia and Europe, have held out hope in recent years that Google and Facebook will be compelled to share their advertising revenue with the local outlets whose content populates their platforms. A look at Alden Global Capital is the cover story of the latest . Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. But he says the worst culprit is the hedge fund Alden Global Capital, which bought the Mercury in 2011 and has since sold the paper's building and slashed newsroom staff by about 70%. He gained 100 pounds and started grinding his teeth at night. Feb. 16, 2021 8:04 PM PT. Plus how Facebook is a hostile foreign power, the engineers daughter, the collapse of music genres, Dostoyevsky, W. G. Sebald, nasty return logistics, and more. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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. But this acquisition was profound, making Alden Global . He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. What happens next? It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. 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. Senior lenders under the deal were to swap debt for stock. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. 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. Some have even suggested that this represents Americas last chance to save its local-news industry. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? . 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 . In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. . ", "The most feared owner in American journalism looks set to take some of its greatest assets", "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty', "What does the Chicago Tribune sale mean for the future of newsrooms? After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. The 21st century has seen many of these generational owners flee the industry, to devastating effect. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. 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. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. So far, Alden has limited its closures primarily to weekly newspapers, but Doctor argues its only a matter of time before the firm starts shutting down its dailies as well. According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. Since Alden's . Gerry Smith. My answer is its hard to know. The hollowing-out of the Chicago Tribune was noted in the national press, of course. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. Vallejo deserves better. A few weeks after the story came out, he was fired. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. It is the nations second-largest newspaper owner by circulation. 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 . When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. Prior to the buildings completion, McCormick directed his foreign correspondents to collect fragments of various historical sitesa brick from the Great Wall of China, an emblem from St. Peters Basilicaand send them back to be embedded in the towers facade. [2] Its managing director is Heath Freeman. 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 pitch had a certain romantic appeal to the reporters in the room. That may well be the future of local news, he says. Enter the email address you signed up with and we'll email you a reset link. What threatens local newspapers now is not just digital disruption or abstract market forces. But for all the theatrics, his marching orders were always the same: Cut more. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. A Secretive Hedge Fund Is Gutting Newsrooms. Other records turned up from public pension funds and filings of publicly traded companies. Send any friend a story As a subscriber, you . But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. At their worst, they used their papers to maintain oppressive social hierarchies. 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. [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. The Ubiquity - The student news site of Quartz Hill High School 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. Alden completed its takeover of the Tribune papers in May. Read: What we lost when Gannett came to town. [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. New York hedge fund and U.S. newspaper consolidator Alden Global Capital LLC has made a proposal to take Lee Enterprises Inc. private in a deal that values the company at around $141 million. (Freeman denied this through a spokesperson.) These papers would have been liquidated if not for us stepping up.. Of course, its easy to romanticize past eras of journalism. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. 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 pay was terrible and the work was not glamorous, but Glidden loved his job. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. 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. How do you know who wins? the boy asks. Misinformation proliferates. 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. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Research shows that when local newspapers disappear or are dramatically gutted, communities tend to see lower voter turnout, increased polarization, a general erosion of civic engagement and an environment in which misinformation and conspiracy theories can spread more easily. Well, he told me, they have some very good reporters., This article appears in the November 2021 print edition with the headline The Men Who Are Killing Americas Newspapers., A Secretive Hedge Fund Is Gutting Newsrooms, I Dont Know That I Would Even Call It Meth Anymore, W. G. Sebald Ransacked Jewish Lives for His Fictions. , From the February 1905 issue: The confessions of a newspaper woman, The papers union hired a PR firm to launch a public-awareness campaign under the banner Save Our Sun and published a letter calling on the Tribune board to sell the paper to local owners. 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. 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. 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 that would require slow, painstaking workand there are easier ways to make money. Like many alumni of the Sun, Simon is steeped in the papers history. 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. 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. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen beforeromance in stone and steel, as one writer described it. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. 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. Former Knight-Ridder headquarters. 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 . 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. But even for a group of journalists, it was tough to keep the publics attention. 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. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. To him, its the same as oil, the publisher said. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. [2] Its managing director is Heath Freeman. October 14, 2021. Theres little evidence that Alden cares about the sustainability of its newspapers. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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.. He stops talking to the press, refuses to be photographed, and rarely appears in public. Margaret Sullivan: The Constitution doesnt work without local news. No response came back. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. 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.
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