That gave the journalists at the Sun a brief window to stop the sale from going through. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. They could be vain, bumbling, even corrupt. 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. But outside the industry, few seemed to notice. 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. My answer is its hard to know. But as long as Alden had made back its money, the investment would be a success. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters ability to sort the honest politicians from the political whores by exposing abuses of power. What threatens local newspapers now is not just digital disruption or abstract market forces. Freeman was only slightly more accessible. [2] Its managing director is Heath Freeman. 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. 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. A group of 11 community newspapers owned by Red Wing Publishing Co. have been sold to MediaNews Group, owner of the St. Paul Pioneer Press and more than 100 newspapers across the country. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. Dec 9, 2021. [6][7][8][9], The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. 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. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news. By the time the FBI caught them, in 2017, the conspiracy had resulted in one dead civilian and a rash of wrongful arrests and convictions. Alden, which took Chicago-based newspaper chain Tribune Publishing private in May, said it made a proposal to buy Lee for $24 a share in cash, a 30% premium to Friday's closing price for . [2] Its managing director is Heath Freeman. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Heath Freeman in an undated photo provided by Goldin Solutions . | Michael Gray, WIkimedia Commons. "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 . This is a subscription-based business.. To be sure, the Knight Foundation does much to help promote and sustain local news. Its not the name or the flag., He may get his wish. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. about two hundred American newspapers. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. . 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. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. Misinformation proliferates. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. By the 1980s, this strategy has made Randy luxuriously wealthyvacations in the French Riviera, a family compound outside New York Cityand he has begun to school his children on the wonders of capitalism. At the Pioneer Press , where its staff is down to 60, the paper produced a . Youd be surprised. 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. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. A look at Alden Global Capital is the cover story of the latest . 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. Alden gradually took control of the papers that would become DFM. One researcher tells me that if that money were invested in the S&P 500 Index Fund, it would have earned roughly $11 million over the same period. [3] [4] With its acquisition of Tribune Publishing in late . But whats happening in Chicago is different. 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. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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 papers printing was moved to a plant more than 100 miles outside town, Glidden told me, which meant that the news arriving on subscribers doorsteps each morning was often more than 24 hours old. Alden's holdings already spanned the country, including the . In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. 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. Heath hopes the well never runs dry, but hes going to keep pumping until it does. Other records turned up from public pension funds and filings of publicly traded companies. 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. Tuesday, 23 November 2021 07:46 PM EST. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. Its hard to imagine theyd show, anyway. Hellman and BNP together own 46.4 per cent of Allfunds' shares. "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?" By McKay Coppins. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. "[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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Morale tanked; reporters burned out. He had spoken on this issue before, and it was easy to see why. This was the core of Freemans argument. In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldnt manipulate, and the photographer who had produced beautiful portraits of the states undocumented immigrants, and the investigative reporter whod helped expose the governors offshore shell companies. Instead, they gutted the place. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . The Tampa Bay Times has sold its printing plant at 1301 34th St. N to a real estate arm of Alden Global Capital, a New York hedge fund that is the second-largest newspaper owner in the country. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. Lee, which owns the St. Louis Post Dispatch, the Omaha World-Herald and many other daily newspapers throughout the region, is staving off a takeover attempt by Alden Global Capital, a New-York . 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. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. This story originally appeared on the Morning Edition live blog. 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. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. It was founded in 2007 by Randall D. 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. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. 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. He stops talking to the press, refuses to be photographed, and rarely appears in public. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. What happens next?
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