The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. But even for a group of journalists, it was tough to keep the publics attention. Freeman was only slightly more accessible. It hurts to see the paper like this, he told her. On . The pitch had a certain romantic appeal to the reporters in the room. Inside Alden Global Capital. Since they bought their first newspapers a decade ago, no one has been more mercenary or less interested in pretending to care about their publications long-term health. Several years later, when Heath was still in his mid-20s, Smith co-founded Alden Global Capital with him, and eventually put him in charge of the firm. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. I asked. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. But if you really started fucking up in grandiose and belligerent ways, if you started stealing and grifting and lying, eventually somebody would come up behind you and say, Youre grifting and youre lying and theyd put it in the paper., The bad stuff runs for so long now, he went on, that by the time you get to it, institutions are irreparable, or damn near close., Take away the newsroom packed with meddling reporters, and a city loses a crucial layer of accountability. But I had underestimated how little Aldens founders care about their standing in the journalism world. This is a subscription-based business.. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Well, that wasnt the point. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. But when I emailed his studio looking for information, I was informed curtly that the photo was no longer available. Had Smith bought the rights himself? I put the question to Freeman, but he declined to answer on the record. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. They are also defined by an obsessive secrecy. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. It emphasizes supporting the emergence of new, sustainable models for local news, through both grantmaking and research, Sherry told me, including grant programs for nonprofit news organizations. This is predatory.. The pay was terrible and the work was not glamorous, but Glidden loved his job. 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. A look at Alden Global Capital is the cover story of the latest . The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? You need real capital to move the needle, he told me. . In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. [31], In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. Read: What we lost when Gannett came to town. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. The Alden Global Capital . When hed agreed to the interview, Id expected him to say the things he was supposed to saythat the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. The one central theme, the Times reports, seems to be that Smith and its web of affiliates are out, first and foremost, for themselves. If this reputation bothers Randy and his colleagues, they dont let on: For a while, according to The Village Voice, his firm proudly hangs a painting of a vulture in its lobby. Heath hopes the well never runs dry, but hes going to keep pumping until it does. hide caption. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. 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. 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. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. When he did, he exhibited a casual contempt for the journalists who worked there. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. 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. 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. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. In the Hyatt meeting, Ted Venetoulis, a former Baltimore politician, advised the reporters to pick a noisy public fight: Set up a war room, circulate petitions, hold events to rally the city against Alden. All good works, and Knight is to be commended for them. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! 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. John Temple: My newspaper died 10 years ago. 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. . Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. "[25], In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. In a news release Monday, Alden said it sent Lee's board a letter with the offer. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. 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. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. he asks. 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. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. [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. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? When the city-hall reporter left a few months later, he picked up that beat too. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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. Alden's holdings already spanned the country, including the . 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. When it was over, a quarter of the newsroom was gone. Smith began investing in newspapers and media around the same time. These papers would have been liquidated if not for us stepping up.. 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 gained 100 pounds and started grinding his teeth at night. To be sure, the Knight Foundation does much to help promote and sustain local news. 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. It seemed reasonable to ask that they answer a few questions. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. On the surface, the answer might seem obvious. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers web and mobile offerings and increased online ad revenue. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. Today, we know that Knight, CalPERS and others no longer invest with Alden. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. Yes, today, it's a newspaper without a newsroom. Coordinated by . 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 . 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. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. That gave the journalists at the Sun a brief window to stop the sale from going through. Smith & Company. 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. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). 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. This investment strategy does not come without social consequences. Enter the email address you signed up with and we'll email you a reset link. ", "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? But that would require slow, painstaking workand there are easier ways to make money. That's because the fund is stepping in to buy and then gut newsrooms across the country. At one point, he told me, the citys entire civil-service commission was abruptly fired without explanation; his sources told him something fishy was going on, but he knew hed never be able to run down the story. [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. 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 . Former Knight-Ridder headquarters. "[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. 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. 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. 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. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. 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 like, Theyre not going to take our newspaper from us! Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. But we dont know, because they arent saying. 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. 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.