Ken Kelleher is an American sculptor. 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 . 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. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. 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. But for Simon, that paper exists entirely in the past. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. At the Pioneer Press , where its staff is down to 60, the paper produced a . 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. 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. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. As a privately held hedge fund, Alden doesnt have to reveal much to the public. Alden is in the business of making money, not journalism. [4][5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune Publishing and became the second-largest newspaper publisher in the United States. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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. Send any friend a story As a subscriber, you . By Julie Reynolds. Smith & Company. 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 . Read: What we lost when Gannett came to town. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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. "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.". When plans for the building were announced in 1922, Colonel Robert R. McCormick, the longtime owner of the Chicago Tribune, said he wanted to erect the worlds most beautiful office building for his beloved newspaper. October 14, 2021. 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. It was clear that they didnt care about this being a business in the future. No response came back. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. 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. "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?" Around this time, Randy becomes preoccupied with privacy. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. But that's not true for all of them. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. 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. All good works, and Knight is to be commended for them. Heath hopes the well never runs dry, but hes going to keep pumping until it does. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. But we dont know, because they arent saying. For those who cared about the future of local news, it was hard to imagine a better outcomewhich made it all the more devastating when the bid fell through. It seemed reasonable to ask that they answer a few questions. John Temple: My newspaper died 10 years ago. That's because the fund is stepping in to buy and then gut newsrooms across the country. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. At the time, even savvy media insiders like Martin Langeveld wistfully predicted Alden would keep newspapers future in mind: Smith knows that the only way to win his big bet on the future of newspapers is to turn them into nimble, modern digital news enterprises.. So who is investing with them? To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. 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. This was the core of Freemans argument. 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. "[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. Youd be surprised. 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. Other records turned up from public pension funds and filings of publicly traded companies. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. But this acquisition was profound, making Alden Global . People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. So what is this Distressed Opportunities fund? 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. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. The pay was terrible and the work was not glamorous, but Glidden loved his job. . Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. For a fleeting moment, Aldens newspapers became unexpected darlings of the journalism industrywritten about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. It has not, however, retained the Chicago Tribune. With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the countrys most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News. In a news release Monday, Alden said it sent Lee's board a letter with the offer. I put the question to Freeman, but he declined to answer on the record. 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 . 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. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. 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. 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. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. 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. 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. They are also defined by an obsessive secrecy. * Edited from 'independent . Alden completed its takeover of the Tribune papers in May. . , 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. After weeks of back-and-forth, he agreed to a phone call, but only if parts of the conversation could be on background (which is to say, I could use the information generally but not attribute it to him). 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 . [13], In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. Who Profits From Alden Global Capital? 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. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . He was fired after criticizing Alden in a Washington Post interview. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. Hellman and BNP together own 46.4 per cent of Allfunds' shares. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. Former Knight-Ridder headquarters. Baltimore has always had its problems, he told me. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. Nov. 22, 2021. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. When he did, he exhibited a casual contempt for the journalists who worked there. 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. 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. 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 . [3] [4] With its acquisition of Tribune Publishing in late . Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. Dec 9, 2021. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. 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. [2] Its managing director is Heath Freeman. Hedge fund Alden Global Capital is attempting to acquire Davenport-based Lee Enterprises, one of the country's largest newspaper chains, in all the markings of a hostile takeover. This is predatory.. A native of Vallejo, he was proud to work for his hometown paper. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in creative destruction, dismantling outmoded businesses to make room for more innovative insurgents. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! A look at Alden Global Capital is the cover story of the latest . 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. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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. Its not the name or the flag., He may get his wish. Senior lenders under the deal were to swap debt for stock. 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 story of Alden Capital begins on the set of a 1960s TV game show called Dream House. He declined to meet me in person or to appear on Zoom. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. Lee's board of directors . Alden Global Capital has currently bid to buy all of Tribune. 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. They could be vain, bumbling, even corrupt. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. After all, it has a long and venerable history of supporting local news. 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, which already owned one-third of . Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. 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. 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 . Heath Freeman in an undated photo provided by Goldin Solutions . 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 . 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. 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. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. 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. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. 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. 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. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers.