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 call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. 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. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. 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. "[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. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. [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. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . From the March 1914 issue: H. L. Mencken on newspaper morals, A story circulated throughout the companypossibly apocryphal, though no one could say for surethat when Freeman was informed that The Denver Post had won a Pulitzer in 2013, his first response was: Does that come with any money?. This story originally appeared on the Morning Edition live blog. I put the question to Freeman, but he declined to answer on the record. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. 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." Enter the email address you signed up with and we'll email you a reset link. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. He was fired after criticizing Alden in a Washington Post interview. 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). The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Freeman never responded. Who is investor Randall Smith and why is he buying up newspaper companies, deep losses to Alden funds overall values, Denver Post newsroom workers invoke Thirst Amendment to raise awareness about conditions under Alden, Pittsburgh newspaper workers are making history, The NewsGuild urges public pension funds to divest from Cerberus, NewsGuild to Lee Shareholders: Reject Aldens Vote No Campaign. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. . He used his own money to pull court records, and went years without going on a vacation. 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. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. 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 . The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. But outside the industry, few seemed to notice. 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. My question was did Knight know what Alden was doing to newspapers when it invested with the hedge fund, and does it regret that investment now? 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. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. The Ubiquity - The student news site of Quartz Hill High School 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. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. The newsroom was moved to a single room rented from the local chamber of commerce. [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. Plus how Facebook is a hostile foreign power, the engineers daughter, the collapse of music genres, Dostoyevsky, W. G. Sebald, nasty return logistics, and more. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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 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. 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. Misinformation proliferates. 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 . They had a father-figure relationship, one told me. The Tribune had been profitable when Alden took over. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. Alden Global Capital has currently bid to buy all of Tribune. 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. "[18], Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. Somehow, no one's buying it. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? 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. Hellman and BNP together own 46.4 per cent of Allfunds' shares. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. 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. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. But there was still a sliver of hope: Tribune and Alden agreed that the hedge fund would not increase its stake in the company for at least seven months. Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. NPR reached out to Alden for a response. On the surface, the answer might seem obvious. Alden is in the business of making money, not journalism. Media . What threatens local newspapers now is not just digital disruption or abstract market forces. To find the papers current headquarters one afternoon in late June, I took a cab across town to an industrial block west of the river. One acquaintance tells The Village Voice that hes the kind of guy who divests himself every couple of years to avoid ending up on lists of the worlds richest people. All good works, and Knight is to be commended for them. 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 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. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. 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. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. 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. but sadly on a global scale there is hardly any independent news sources left currently. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . "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 . [2] Its managing director is Heath Freeman. Research shows that when local newspapers disappear or are dramatically gutted, communities tend to see lower voter turnout, increased polarization, a general erosion of civic engagement and an environment in which misinformation and conspiracy theories can spread more easily. Updated May 21, 2021 at 2:13 PM ET. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. 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. Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . 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. | Michael Gray, WIkimedia Commons. 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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. 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. Read: What we lost when Gannett came to town. At their worst, they used their papers to maintain oppressive social hierarchies. 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. 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. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. 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. The hollowing-out of the Chicago Tribune was noted in the national press, of course. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. Probably not.. 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. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. But this acquisition was profound, making Alden Global . Feb. 16, 2021 8:04 PM PT. Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. He can cite decades-old scoops and tell you whom they pissed off. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. 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.. Otherwise, youre just peeing in the ocean.. [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.
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