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. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. 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). Connecting this to the current state of American newspaper ownership seems rather tenuous.. Collectively, they control about one-half of daily newspapers in the U.S. 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. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. Well, that wasnt the point. It was clear that they didnt care about this being a business in the future. Ken Kelleher is an American sculptor. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. It felt important. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. Probably not.. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. The newsroom was moved to a single room rented from the local chamber of commerce. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. Alden Global Capital is a hedge fund based in Manhattan, New York City. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Updated May 21, 2021 at 2:13 PM ET. (Freeman denied this characterization through a spokesperson. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. 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. If accepted, the $24 per share purchase price would . Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Freeman never responded. To be sure, the Knight Foundation does much to help promote and sustain local news. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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. A young man named Randall Duncan SmithRandy for shortstands next to his wife, Kathryn, answering quick-fire trivia questions in front of a live studio audience. Some of these papers likely would have been liquidated if the fund had not stepped in to buy them, as Alden's president told Coppins. 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. 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. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. 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. 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. Alden Global Capital has currently bid to buy all of Tribune. he asks. But as an organization that believes that quality information is essential for individuals and communities to make their own bestchoices, it was disappointing that the foundation couldnt simply own up to its error in judgment when it came to Alden. 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. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. They could be vain, bumbling, even corrupt. 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. 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. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. 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.. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. 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. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. Feb. 16, 2021 8:04 PM PT. 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. Former Knight-Ridder headquarters. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. But this acquisition was profound, making Alden Global . 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. 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. I asked if anyone there at the time was aware of Aldens vulture business strategy. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. He had spoken on this issue before, and it was easy to see why. Alden, which already owned one-third of . 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. Prior to the buildings completion, McCormick directed his foreign correspondents to collect fragments of various historical sitesa brick from the Great Wall of China, an emblem from St. Peters Basilicaand send them back to be embedded in the towers facade. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. How do you know who wins? the boy asks. 'Sobs, gasps, expletives' over latest Denver Post layoffs", "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat", "How Massive Cuts Have Remade The Denver Post", "Newsonomics: By selling to Americas worst newspaper owners, Michael Ferro ushers the vultures into Tribune", "A Secretive Hedge Fund Is Gutting Newsrooms", "Affiliated Media Files for Bankruptcy to Restructure (Update2)", "The shakeup at MediaNews: Why it could be the leadup to a massive newspaper consolidation", "Alden Global Capital to buy Tribune in deal valued at $630 million", "Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover", "Lee Enterprises Board Rejects Alden's Acquisition Offer", "Alden Global Capital takes Lee Enterprises to court over failed board nominations", "Alden Global Capital sues Lee Enterprises after rejected takeover bid", "Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board", "Lee Enterprises shareholders reelect three directors amid hedge fund fight", "Tampa Bay Times sells printing plant to developer for $21 million", "A hedge fund's 'mercenary' strategy: Buy newspapers, slash jobs, sell the buildings", "The hedge fund trying to buy Gannett faces federal probe after investing newspaper workers' pensions in its own funds", https://en.wikipedia.org/w/index.php?title=Alden_Global_Capital&oldid=1130942589, This page was last edited on 1 January 2023, at 19:27. 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. AP. That gave the journalists at the Sun a brief window to stop the sale from going through. 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. But he has a big idea: He believes theres serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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.. What happens next? 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 is known for . . [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. But Glidden felt sure he knew the real reason: Alden wanted him gone. Below are highlights from his conversation with Morning Edition's A Martnez. As the months passed, things kept getting worse. The hollowing-out of the Chicago Tribune was noted in the national press, of course. 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. When he did, he exhibited a casual contempt for the journalists who worked there. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. Senior lenders under the deal were to swap debt for stock. 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. but sadly on a global scale there is hardly any independent news sources left currently. 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. The Ubiquity - The student news site of Quartz Hill High School 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. This is predatory.. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. I felt like a terrible reporter because I couldnt get to everything.. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . Some people believe that local newspapers will eventually be replaced by new publications, which Coppins describes as "built from the ground-up for the digital era." "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?" For two men who employ thousands of journalists, remarkably little is known about them. But for all the theatrics, his marching orders were always the same: Cut more. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. 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 even for a group of journalists, it was tough to keep the publics attention. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. 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. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Some in the city started to wonder if the paper was even worth saving. 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. Nov. 22, 2021. Smith & Company. City budgets balloon, along with corruption and dysfunction. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. As a privately held hedge fund, Alden doesnt have to reveal much to the public. ", "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?