Somehow, no one's buying it. They were very tight. Freeman has resisted elaborating on his relationship with Smith, saying simply that they were family friends before going into business together. I put the question to Freeman, but he declined to answer on the record. 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.. 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. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. Instead, the money was used to finance the hedge funds other ventures. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. 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. Alden is known for . Margaret Sullivan: The Constitution doesnt work without local news. It felt important. 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. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. 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 . To him, its the same as oil, the publisher said. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. 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. 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 the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. Alden currently owns 32%. 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. How do you know who wins? the boy asks. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. 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. 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. A look at Alden Global Capital is the cover story of the latest . Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. 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. In 2011, Paton launched an ambitious initiative he called Project Thunderdome, hiring more than 50 journalists in New York and strategically deploying them to supplement short-staffed local newsrooms. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. It turned out that those ownersNew York hedge funders whom Glidden took to calling the lizard peoplewere laser-focused on increasing the papers profit margins. 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. 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. 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. But Glidden felt sure he knew the real reason: Alden wanted him gone. [27] The Alden lawsuit asserts that the members of the Lee board "have every reason to maintain the status quo and their lucrative corporate positions" and that they are "focused more on [their] own power than what's best for the company. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. 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. After all, it has a long and venerable history of supporting local news. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. 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. , 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 a contentious presidential race and amid a still-raging pandemic, there was a limited supply of outrage and sympathy to spare for local reporters. But in the case of local news, nothing comparable is ready to replace these papers when they die. Alden Global Capital is a hedge fund based in Manhattan, New York City. In budget meetings, according to the former executive, Freeman hectored local publishers, demanding that they produce detailed numbers off the top of their head and then humiliating them when they couldnt. 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 . The newsroom was moved to a single room rented from the local chamber of commerce. 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. Coordinated by . 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 . Around this time, Randy becomes preoccupied with privacy. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. 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. Instead, they gutted the place. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. 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. 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.. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Those that have survived are smaller, weaker, and more vulnerable to acquisition. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. . Financially, it was a raw deal. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. But years later, when Randy relocates to Palm Beach and becomes a major donor to Donald Trumps presidential campaign, it will make a certain amount of sense that his earliest known media investment was conceived as a giant middle finger to the journalistic establishment. They could be vain, bumbling, even corrupt. Its not the name or the flag., He may get his wish. The shows premise pits two couples against each other for the chance to win a home. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. What happens next? [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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. 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 1% own and operate the . The firm has a history of purchasing newspapers to cut costs wherever . 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. He can cite decades-old scoops and tell you whom they pissed off. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. 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 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 . It has figured out how to make a profit by driving newspapers into the ground, he says, since Alden's aim is not to make them into long-term sustainable businesses but rather maximize profits quickly to show it has made a winning investment. 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. Smith. It has not, however, retained the Chicago Tribune. Now it might be facing extinction. As the months passed, things kept getting worse. 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. 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. 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. 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.. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by 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. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. He gained 100 pounds and started grinding his teeth at night. The pay was terrible and the work was not glamorous, but Glidden loved his job. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. (Freeman has, in the past, disputed Bainums account of the negotiations.) 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. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Hellman and BNP together own 46.4 per cent of Allfunds' shares. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. 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. 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. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital.
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