When the city-hall reporter left a few months later, he picked up that beat too. Its hard to imagine theyd show, anyway. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. A Secretive Hedge Fund Is Gutting Newsrooms. Somehow, no one's buying it. 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. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. To be sure, the Knight Foundation does much to help promote and sustain local news. On . 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. It is the nations second-largest newspaper owner by circulation. 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. "[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. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. [2] Its managing director is Heath Freeman. Maybe this obscure hedge fund had a plan. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Nov. 22, 2021. 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. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. [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. Layout design was outsourced to freelancers in the Philippines. 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 is in the business of making money, not journalism. [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. He wrote, "Alden Global Capital has eliminated the jobs of scores of reporters and editors, and decimated journalism in cities all over the country: Denver, Boston, San Jose, Trenton, etc. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. I felt like a terrible reporter because I couldnt get to everything.. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. 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. Inside Alden Global Capital. 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. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). 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. But for Simon, that paper exists entirely in the past. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. 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. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. At the end of last month, Alden Global Capital, a notorious newspaper-owning hedge fund, sought to stake its claim on one of the last newspaper chains it hasn't yet touched: Lee Enterprises, which owns 90 publications across the country.Alden, which currently owns six percent of Lee's stock, sent an unsolicited offer to purchase the newspaper chain for $24 per share. 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. Its not the name or the flag., He may get his wish. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Gerry Smith. My answer is its hard to know. (Freeman denied this characterization through a spokesperson. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. 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.. Around this time, Randy becomes preoccupied with privacy. These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. Freeman never responded. That's because the fund is stepping in to buy and then gut newsrooms across the country. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. 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. 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. After all, it has a long and venerable history of supporting local news. Alden Global Capital is a hedge fund based in Manhattan, New York City. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . he asks. 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. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. 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. 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. Senior lenders under the deal were to swap debt for stock. He declined to meet me in person or to appear on Zoom. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. Media . By McKay Coppins. 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. This investment strategy does not come without social consequences. In the past 15 years, more than a quarter of American newspapers have gone out of business. Who is investor Randall Smith and why is he buying up newspaper companies, deep losses to Alden funds overall values, Denver Post newsroom workers invoke Thirst Amendment to raise awareness about conditions under Alden, Pittsburgh newspaper workers are making history, The NewsGuild urges public pension funds to divest from Cerberus, NewsGuild to Lee Shareholders: Reject Aldens Vote No Campaign. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. 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. It was clear that they didnt care about this being a business in the future. AP. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. Who Profits From Alden Global Capital? 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. Alden Global Capital has currently bid to buy all of Tribune. That may well be the future of local news, he says. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. It . 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? He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. He stops talking to the press, refuses to be photographed, and rarely appears in public. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. hide caption. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. He had spoken on this issue before, and it was easy to see why. 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. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. When it was over, a quarter of the newsroom was gone. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. I put the question to Freeman, but he declined to answer on the record. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. ", "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? 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 . But as an organization that believes that quality information is essential for individuals and communities to make their own bestchoices, it was disappointing that the foundation couldnt simply own up to its error in judgment when it came to Alden. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, Freeman was only slightly more accessible. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. "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 . He teaches his 8-year-old son, Caleb, to make trades on a Quotron computer, and imparts the value of delayed gratification by reportedly postponing his familys Christmas so that he can use all their available cash to buy stocks at lower prices in December. This story originally appeared on the Morning Edition live blog. [3] [4] With its acquisition of Tribune Publishing in late . He says he visited the Tribune's office and was "really shocked by how grim the scene was." . It has not, however, retained the Chicago Tribune. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. 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. Enter the email address you signed up with and we'll email you a reset link. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. But that's not true for all of them. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. It financed the deal with the help of Cerberusa private-equity firm that owned, among other businesses, the security company that trained Saudi operatives who participated in the murder of the journalist Jamal Khashoggi. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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 . Those that have survived are smaller, weaker, and more vulnerable to acquisition. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. 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." When he did, he exhibited a casual contempt for the journalists who worked there. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. By 2011, when Aldens Distressed Opportunities Fund lost more than 20 percent of its value, Knights holdings in the fund were valued at $10.7 million. 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. So what is this Distressed Opportunities fund? 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 . Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. Alden gradually took control of the papers that would become DFM. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. At their worst, they used their papers to maintain oppressive social hierarchies. 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.. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? But this acquisition was profound, making Alden Global . 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 . I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. Smith. Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. 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. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. 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 . | Michael Gray, WIkimedia Commons. But we dont know, because they arent saying. By Julie Reynolds. Its a hedge that went and bought up some titles that it milks for cash.. It felt important. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. We were like, Theyre not going to take our newspaper from us! To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. 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. At the Pioneer Press , where its staff is down to 60, the paper produced a . Instead, the money was used to finance the hedge funds other ventures. Alden, which owns more than 200 newspapers across the country, has developed a reputation for using extensive layoffs and severe cost cuts at the newspapers it owns. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. The Ubiquity - The student news site of Quartz Hill High School Youd be surprised. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. Hellman and BNP together own 46.4 per cent of Allfunds' shares. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. 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. Some in the city started to wonder if the paper was even worth saving. As a privately held hedge fund, Alden doesnt have to reveal much to the public. 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. 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.
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