Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. Opinions - Help yourself. Is it ever okay to nick an idea? Dec 9, 2021. 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 shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. Heath hopes the well never runs dry, but hes going to keep pumping until it does. Live news: US manufacturing sector contracts for fourth straight month 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Tampa Bay Times sells printing plant to developer for $21 million You have no way of knowing that if you dont have some nosy son of a bitch asking a lot of questions down there, he told me. 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. Heath Freeman in an undated photo provided by Goldin Solutions . 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. The rationale offered by the board was, Consistent with its fiduciary duties, Lees Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Aldens unsolicited proposal to acquire Lee. Alden Global Capital seeks to buy Lee Enterprises for $144M The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Shares of Lee Enterprises Inc. rose sharply Monday after hedge fund Alden Global Capital LLC offered to buy the newspaper publisher for about $141 million. 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. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. 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. It was clear that they didnt care about this being a business in the future. 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. Margaret Sullivan: The Constitution doesnt work without local news. 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. 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. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. 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. 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. But we dont know, because they arent saying. "A lot of cities almost operate with the assumption that there will be at least one local newspaper, in some cases several local newspapers, acting as a check on the authorities," he says. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. "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?" 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. 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. Am I going to win against capitalism in America? Theres little evidence that Alden cares about the sustainability of its newspapers. Well, that wasnt the point. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. . A search through nonprofit groups publicly available financial reports, commonly known as Form 990s, reveals that all kinds of organizations some surprising have invested their monies with Alden over the years. Alden Global to buy Tribune Publishing for $630 million - Los Angeles Times It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. Since Alden's . This is a subscription-based business.. 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. The shows premise pits two couples against each other for the chance to win a home. 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 David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. A century later, the Tribune Tower has retained its grandeur. Alden Global Capital revealed a proposal Monday to purchase Lee Enterprise Inc. and its newspapers at $24 a share, casting alarm through the many newsrooms owned by Lee. Its a hedge that went and bought up some titles that it milks for cash.. Read: What we lost when Gannett came to town. As the months passed, things kept getting worse. Have you heard of the hedge fund Alden Global Capital? Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. As a reporter who's covered Alden Global Capital for more than two years, people often ask me who are the investors behind the hedge fund that owns one of America's largest newspaper chains?. 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. 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. 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. 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. When he did, he exhibited a casual contempt for the journalists who worked there. By McKay Coppins. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. Local newsrooms strained by budget-slashing financial firms The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. The hollowing-out of the Chicago Tribune was noted in the national press, of course. . Alden Global Capital, the New York hedge fund that bought Tribune Publishing this year, said on Monday that it was making an offer for another big American newspaper chain, Lee . On . 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. It makes me profoundly sad to think about what the Trib was, what it is, and what its likely to become, says David Axelrod, who was a reporter at the paper before becoming an adviser to Barack Obama. I put the question to Freeman, but he declined to answer on the record. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of whats about to happen. 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. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. 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. He had spoken on this issue before, and it was easy to see why. The 1% own and operate the . Feeling burned by the hedge fund, Bainum decided to make a last-minute bid for all of Tribune Publishings newspapers, pledging to line up responsible buyers in each market. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. 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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. Hedge fund Alden Global Capital in hunt for big newspaper chain Lee But I had underestimated how little Aldens founders care about their standing in the journalism world. 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. "[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. Alden Global Capital Is Killing the Newsroom - Common Dreams . This is the story weve been telling for decades about the dying local-news industry, and its not without truth. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. [2] Its managing director is Heath Freeman. 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. Denver Post reporters vs 'vulture capitalist' hedge fund Alden - CNBC After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. But even for a group of journalists, it was tough to keep the publics attention. "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 . Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. 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. 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 . Alden currently owns 32%. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. 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. 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. Alden Global Capital moves to buy Lee Enterprises, owner of the St At the Pioneer Press , where its staff is down to 60, the paper produced a . More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. The question was how. These papers would have been liquidated if not for us stepping up.. Its a game, Randy explains to his son. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. 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. 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. Alden Global Capital makes offer for Lee Enterprises, owner of Winston Freeman never responded. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. How this 'vulture' hedge fund's gutting of local newsrooms could hurt 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. NY Daily News owner Alden sues Lee after publisher rejects takeover bid 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. Baltimore has always had its problems, he told me. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. "And what we've seen in a lot of these places where newspapers have been scaled back or even closed is there really is no comparable product in place, whether it's by the government or by another news organization, to do what these local newspapers have done for hundreds of years.". Next up: Chicago, Baltimore, and the New York Daily News. "[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. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. On the surface, the answer might seem obvious. My answer is its hard to know. This was the core of Freemans argument. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. You can bypass most soft paywalls with a little CSS knowledge The newsroom was moved to a single room rented from the local chamber of commerce. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. Who Profits From 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. but sadly on a global scale there is hardly any independent news sources left currently. Instead, they gutted the place. 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 vulture is hungry again: Alden Global Capital wants to buy a few , 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. 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. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. On Monday, Dail So who is investing with them? 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. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. 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 purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . 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 . It felt important. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. 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. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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. When The New York Times profiles him in 1991, it notes that he excels at profiting from other peoples misery and quotes a parade of disgruntled clients and partners.