This investment strategy does not come without social consequences. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Aldens calculus was simple. Alden, which already owned one-third of . 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. The newsroom was moved to a single room rented from the local chamber of commerce. | Michael Gray, WIkimedia Commons. qhhsubiquity.com Informacin detallada del sitio web y la empresa This is a subscription-based business.. But there are some clues here and there. 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. 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. Hedge fund reaches $630m deal to buy remaining Tribune Publishing On the surface, the answer might seem obvious. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. Nov. 22, 2021. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. '60 Minutes' correspondent Jon Wertheim on local newspapers - Poynter [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. Instead, they gutted the place. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. The shadow of hedge fund and corporate ownership leaves newsrooms in But we dont know, because they arent saying. hide caption. 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. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. In truth, Freeman didnt seem particularly interested in defending Aldens reputation. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. (Freeman has, in the past, disputed Bainums account of the negotiations.) One, the warning shot was fired in 2011, in a Poynter Institute article titled Who is investor Randall Smith and why is he buying up newspaper companies? Randall Smith is the co-founder of Alden, together with his young protg, Heath Freeman, and has been called the grandfather of vulture investing. Vulture funds by definition dont reinvest in their properties they suck them dry. The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. On more than one occasion, according to people I spoke with, he asked aloud, What do all these people do? According to the former executive, Freeman once suggested in a meeting that Aldens newspapers could get rid of all their full-time reporters and rely entirely on freelancers. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. Those that have survived are smaller, weaker, and more vulnerable to acquisition. 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. about two hundred American newspapers. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. 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. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. Coordinated by . Lee Enterprises holds off an Alden takeoverfor now ", "The most feared owner in American journalism looks set to take some of its greatest assets", "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty', "What does the Chicago Tribune sale mean for the future of newsrooms? After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. 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. Who Profits From Alden Global Capital? Bainum envisioned rebuilding the paperwhich, by 2020, was down to a single full-time statehouse reporteras a nonprofit. When he did, he exhibited a casual contempt for the journalists who worked there. It was founded in 2007 by Randall D. Alden Global Capital is a hedge fund based in Manhattan, New York City. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. 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? After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. Some in the city started to wonder if the paper was even worth saving. Alden Global Looks to Buy Newspaper Publisher Lee Enterprises Now he was feeling the effects of their management. Instead, they gutted the place. But for Simon, that paper exists entirely in the past. For two men who employ thousands of journalists, remarkably little is known about them. Hedge fund Alden to buy Tribune Publishing in deal valued at $630 If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. If accepted, the $24 per share purchase price would . 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). This summer, Alden Global Capital acquired Tribune Publishing and its titles, from small community newspapers to major metro titles like its flagship, The Chicago Tribune, and The Baltimore Sun. These include the Chicago Tribune, the New York Daily News, and The Baltimore Sun. Otherwise, youre just peeing in the ocean.. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. 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. Feb. 16, 2021 8:04 PM PT. A Secretive Hedge Fund Is Gutting Newsrooms. 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. "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 . The Tampa Bay Times has sold its printing plant at 1301 34th St. N to a real estate arm of Alden Global Capital, a New York hedge fund that is the second-largest newspaper owner in the country. 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. Hedge fund Alden Global Capital, known for making deep newsroom cuts, won approval to acquire Tribune Publishing, which includes the Chicago Tribune, The Baltimore Sun and New York Daily News. Heath Freeman in an undated photo provided by Goldin Solutions . [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. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Now it might be facing extinction. 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. Smith & Company. The vulture is hungry again: Alden Global Capital wants to buy a few City budgets balloon, along with corruption and dysfunction. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. 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. I asked Knight about those investments and whether the Foundations officers had any regrets, knowing what we now do about Aldens devastating effect on its own newspapers. One known investor, however, is the Randall and Barbara Smith Foundation, named for Alden founder Smith and his wife. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. 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. The question was how. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. The pay was terrible and the work was not glamorous, but Glidden loved his job. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . As a reporter whos 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 Americas largest newspaper chains? It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune.
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