After college he worked at Hudson Studio, Art Foundry in Niverville, NY . A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. Youd be surprised. 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. [10][19][20], The company has its origins in R.D. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers web and mobile offerings and increased online ad revenue. 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. And everyone knows its going to run dry.. Feb. 16, 2021 8:04 PM PT. 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. Since Alden's . A look at Alden Global Capital is the cover story of the latest . 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. While some finance reporters noted that Smiths newspaper investments were all losing value, none seemed to notice that Smith and Aldens president Heath Freeman would soon start strip mining their news companies real estate and other assets. Well, that wasnt the point. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. . At the Pioneer Press , where its staff is down to 60, the paper produced a . Coordinated by . In the past 15 years, more than a quarter of American newspapers have gone out of business. 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. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. He stops talking to the press, refuses to be photographed, and rarely appears in public. It hurts to see the paper like this, he told her. 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. Already the largest shareholder . Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. 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. 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. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. This company that owns us now seems to still be prettyI dont even know how to put it, the editor said, according to a recording of the meeting obtained by The Atlantic. Alden Global Capital, a hedge fund known for gutting local newsrooms, is seeking to buy Lee Enterprises (LEE), a publicly traded company with a chain of daily newspapers and other publications . When the city-hall reporter left a few months later, he picked up that beat too. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. They want to know who exactly profits when we learn, as Harvard Nieman Lab's Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media . The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. 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. 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. ", "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? [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. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. 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. [2] Its managing director is Heath Freeman. 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. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . A century later, the Tribune Tower has retained its grandeur. When a reporter asked if their work was still valued, the editor sounded deflated. 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. It felt important. Alden gradually took control of the papers that would become DFM. 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 truth, Freeman didnt seem particularly interested in defending Aldens reputation. Those that have survived are smaller, weaker, and more vulnerable to acquisition. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. 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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. 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 Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. 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 include the Chicago Tribune, the New York Daily News, and The Baltimore Sun. but sadly on a global scale there is hardly any independent news sources left currently. But there was still a sliver of hope: Tribune and Alden agreed that the hedge fund would not increase its stake in the company for at least seven months. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. ", "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? 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. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. So I was more than a little shocked to learn that, according to its tax filings, Knight had invested $13 million with Aldens Distressed Opportunities Fund by 2010 and kept investing through 2014. Other records turned up from public pension funds and filings of publicly traded companies. But as long as Alden had made back its money, the investment would be a success. 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. That's because the fund is stepping in to buy and then gut newsrooms across the country. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. But for all the theatrics, his marching orders were always the same: Cut more. (Freeman denied this characterization through a spokesperson. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. He used his own money to pull court records, and went years without going on a vacation. AP. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. 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. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . They had a father-figure relationship, one told me. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. But that would require slow, painstaking workand there are easier ways to make money. This is a subscription-based business.. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. 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. [3] [4] With its acquisition of Tribune Publishing in late . Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. 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. Senior lenders under the deal were to swap debt for stock. 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 . A recent Financial Times analysis found that half of all daily newspapers in the U.S. are controlled by financial firms, and Coppins says that number is all but certain to keep growing. Margaret Sullivan: The Constitution doesnt work without local news. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. * Edited from 'independent . Its a game, Randy explains to his son. The shows premise pits two couples against each other for the chance to win a home. After all, it has a long and venerable history of supporting local news. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. 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. Alden Global Capital has currently bid to buy all of Tribune. Former Knight-Ridder headquarters. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. October 14, 2021. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Like many alumni of the Sun, Simon is steeped in the papers history. Its not the name or the flag., He may get his wish. 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. That may well be the future of local news, he says. 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.. Instead, they gutted the place. Heath hopes the well never runs dry, but hes going to keep pumping until it does. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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. Smith began investing in newspapers and media around the same time. 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). Prior to the acquisition of the Tribune Company, we purchased substantially all of our newspapers out of bankruptcy or close to liquidation, he told me. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. 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. 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. 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. Smith. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. 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. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. To be sure, the Knight Foundation does much to help promote and sustain local news. 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. 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. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. Alden is known for . The men killing Americas newspapers, how Slack upended the workplace, and the new meth. 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. You need real capital to move the needle, he told me. [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. [2] Its managing director is Heath Freeman. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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. 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. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. 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. It played with my mind a little bit, Glidden told me. "[34], In October 2021, The Atlantic examined the impact of Alden's acquisition of the Chicago Tribune, noting that, "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. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. The question was how. 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. He gained 100 pounds and started grinding his teeth at night. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. 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. 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. [33], Alden Global Capital's management of American newspapers has been criticized. [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. These papers would have been liquidated if not for us stepping up.. In a news release Monday, Alden said it sent Lee's board a letter with the offer. Feb 16, 2021 at 8:05 pm. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. 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. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. Spend some time around the shell-shocked journalists at the Tribune these days, and youll hear the same question over and over: How did it come to this? "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?" The pay was terrible and the work was not glamorous, but Glidden loved his job. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. 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 . 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.. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. It has not, however, retained the Chicago Tribune. 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. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. 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 . For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. Alden Global Capital is a hedge fund based in Manhattan, New York City. (Freeman denied this through a spokesperson.) 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 predatory.. On the surface, the answer might seem obvious. Alden is in the business of making money, not journalism. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. 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. | Michael Gray, WIkimedia Commons. It is the nations second-largest newspaper owner by circulation. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. The 21st century has seen many of these generational owners flee the industry, to devastating effect. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. 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. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. It was clear that they didnt care about this being a business in the future. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors.

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