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. 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. They are also defined by an obsessive secrecy. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. The Ubiquity - The student news site of Quartz Hill High School The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. City budgets balloon, along with corruption and dysfunction. 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). What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. Meanwhile, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. My answer is its hard to know. 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?. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. 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. 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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. [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. 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. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. | Michael Gray, WIkimedia Commons. Around this time, Randy becomes preoccupied with privacy. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. It is the nations second-largest newspaper owner by circulation. 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. 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. 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. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. 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 . 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. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. Some in the city started to wonder if the paper was even worth saving. Some have even suggested that this represents Americas last chance to save its local-news industry. 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. On . He was fired after criticizing Alden in a Washington Post interview. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. You need real capital to move the needle, he told me. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Freeman would show up at business meetings straight from the gym, clad in athleisure, the executive recalled, and would find excuses to invoke his college-football heroics, saying things like When I played football at Duke, I learned some lessons about leadership. (Freeman was a walk-on placekicker on a team that won no games the year he played.). Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. [10] With its acquisition of Tribune Publishing in late May 2021, Alden is collectively the second-largest owner of newspapers in the United States, as calculated by average daily print circulation, second only to Gannett. On Monday, Dail Alden currently owns 32%. 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. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. 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. It has not, however, retained the Chicago Tribune. 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. At the Pioneer Press , where its staff is down to 60, the paper produced a . Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. Other records turned up from public pension funds and filings of publicly traded companies. Baltimore has always had its problems, he told me. Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Aldens commitment to cost-cutting as a badge of honorthe thing that distinguished him from the saps and cowards who made up Americas previous generation of newspaper owners. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. 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. 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 . They could be vain, bumbling, even corrupt. Feb. 16, 2021 8:04 PM PT. 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. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . (Freeman denied this through a spokesperson.) When a reporter asked if their work was still valued, the editor sounded deflated. Today, we know that Knight, CalPERS and others no longer invest with Alden. A Cornell grad with an M.B.A., Randy is on a partner track at Bear Stearns, where hes poised to make a comfortable fortune simply by climbing the ladder. It hurts to see the paper like this, he told her. Well, that wasnt the point. [10][19][20], The company has its origins in R.D. 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. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. That gave the journalists at the Sun a brief window to stop the sale from going through. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. At their worst, they used their papers to maintain oppressive social hierarchies. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. Alden Global Capital, a hedge fund known for gutting local newsrooms, is seeking to buy Lee Enterprises (LEE), a publicly traded company with a chain of daily newspapers and other publications . 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. Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . Alden Global Capital, the hedge fund that owns the Chicago Tribune and New York Daily News, offered to buy Lee Enterprises Inc. for about $142 million, seeking a larger share of the . Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. 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. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. When I asked Freeman what he thought was broken about the newspaper industry, he launched into a monologue that was laden with jargon and light on insightsummarizing what has been the conventional wisdom for a decade as though it were Aldens discovery. Morale tanked; reporters burned out. 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. The newsroom was moved to a single room rented from the local chamber of commerce. 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. [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. 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. 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. He used his own money to pull court records, and went years without going on a vacation. I put the question to Freeman, but he declined to answer on the record. 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. The Alden Global Capital . Alden Global Capital has currently bid to buy all of Tribune. Already the largest shareholder . Smith & Company. 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 . 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. 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 . Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. 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.. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. 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. To be sure, the Knight Foundation does much to help promote and sustain local news. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. It wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. 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. [2] Its managing director is Heath Freeman. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. But that's not true for all of them. For two men who employ thousands of journalists, remarkably little is known about them. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. 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. 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. [8][24] Tribune Publishing publishes nine major metropolitan dailies. But it turned out that Smith had so many doorsteps16 mansions in Palm Beach alone, as of a few years ago, some of them behind gatesthat the plan proved impractical. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. 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 was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. But for all the theatrics, his marching orders were always the same: Cut more. '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. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. He can cite decades-old scoops and tell you whom they pissed off. Alden-owned newspapers have cut their staff at twice the rate of their competitors, for all of Tribune Publishings newspapers, security company that trained Saudi operatives. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. The scene was somehow even grimmer than Id imagined. "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?" Spend some time around the shell-shocked journalists at the Tribune these days, and youll hear the same question over and over: How did it come to this? He gained 100 pounds and started grinding his teeth at night. Its being snuffed out, quarter after quarter after quarter. We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. 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. 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. 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. But as long as Alden had made back its money, the investment would be a success. 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. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. [33], Alden Global Capital's management of American newspapers has been criticized. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. 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. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. One tagline he was considering was Marylands Best Newsroom., When I asked, half in jest, if he planned to raid the Sun to staff up, he responded with a muted grin. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. 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 . Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. This investment strategy does not come without social consequences. . Well, he told me, they have some very good reporters., This article appears in the November 2021 print edition with the headline The Men Who Are Killing Americas Newspapers., A Secretive Hedge Fund Is Gutting Newsrooms, I Dont Know That I Would Even Call It Meth Anymore, W. G. Sebald Ransacked Jewish Lives for His Fictions.