Or to nearby Monterey, where the former Herald reporter Julie Reynolds says staffers were pushed to stop writing investigative features so they could produce multiple stories a day. So Freeman pivoted. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. 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. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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. Instead, they gutted the place. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. But whats happening in Chicago is different. 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. When Alden first got into the news business, Freeman seemed willing to indulge some innovation. At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. 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. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. 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. Its a hedge that went and bought up some titles that it milks for cash.. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. 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. 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. But for all the theatrics, his marching orders were always the same: Cut more. Last week, Alden Global Capital, the hedge fund notorious for slashing costs at its local titles, came down on the No side of the question, with editorial boards at papers that it owns stating that they will no longer endorse candidates for governor, US senator, or president. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. So who is investing with them? 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 . And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. Some have even suggested that this represents Americas last chance to save its local-news industry. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . "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 . Freeman never responded. 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. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. 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. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. A look at Alden Global Capital is the cover story of the latest . 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. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. Today, we know that Knight, CalPERS and others no longer invest with Alden. Other records turned up from public pension funds and filings of publicly traded companies. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. 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. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. , From the February 1905 issue: The confessions of a newspaper woman, The papers union hired a PR firm to launch a public-awareness campaign under the banner Save Our Sun and published a letter calling on the Tribune board to sell the paper to local owners. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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. The hollowing-out of the Chicago Tribune was noted in the national press, of course. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. Located in the same Manhattan office building as Alden, it funds stem-cell research, health-related charities, arts and culture and Duke University, alma mater of Smiths protg Heath Freeman. "[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. 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. 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. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. 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. Alden, which already owned one-third of . [22] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. To be sure, the Knight Foundation does much to help promote and sustain local news. 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. It has not, however, retained the Chicago Tribune. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. 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. Some in the city started to wonder if the paper was even worth saving. During its five-year run with Alden, it seems quite unlikely that no one at Knight knew about the hedge funds slash-and-burn strategy for two reasons. But this acquisition was profound, making Alden Global . We must finally require the online tech behemoths, such as Google, Apple, and Facebook, to fairly compensate us for our original news content, he told me. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Smith. 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). Instead, the money was used to finance the hedge funds other ventures. 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?. These papers would have been liquidated if not for us stepping up.. Read: What we lost when Gannett came to town. 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. [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. 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. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. 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 Ubiquity - The student news site of Quartz Hill High School With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. City budgets balloon, along with corruption and dysfunction. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in creative destruction, dismantling outmoded businesses to make room for more innovative insurgents. 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. But by 2014, it was becoming clear to Aldens executives that Patons approach would be difficult to monetize in the short term, according to people familiar with the firms thinking. This all seemed especially relevant considering many Alden/DFM papers were previously part of the Knight-Ridder chain, the family news empire from which the foundation sprang. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. But beneath all the recriminations and infighting was a cruel reality: When faced with the likely decimation of the countrys largest local newspapers, most Americans didnt seem to care very much. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC.[23]. It was clear that they didnt care about this being a business in the future. Hellman and BNP together own 46.4 per cent of Allfunds' shares. 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. This is a subscription-based business.. You need real capital to move the needle, he told me. 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. Theres little evidence that Alden cares about the sustainability of its newspapers. By the 1980s, this strategy has made Randy luxuriously wealthyvacations in the French Riviera, a family compound outside New York Cityand he has begun to school his children on the wonders of capitalism. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. [10][19][20], The company has its origins in R.D. 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. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. * Edited from 'independent . At the same time, he increased subscription prices in many markets; it would take awhile for subscribersmany of them older loyalists who didnt carefully track their billsto notice that they were paying more for a worse product. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. ", "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? In a news release Monday, Alden said it sent Lee's board a letter with the offer. Or to Denver, where the Posts staff was cut by two-thirds, evicted from its newsroom, and relocated to a plant in an area with poor air quality, where some employees developed breathing problems. We were like, Theyre not going to take our newspaper from us! When he did, he exhibited a casual contempt for the journalists who worked there. 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. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. But for Simon, that paper exists entirely in the past. Tuesday, 23 November 2021 07:46 PM EST. Its hard to imagine theyd show, anyway. NPR reached out to Alden for a response. Heath Freeman in an undated photo provided by Goldin Solutions . Have you heard of the hedge fund Alden Global Capital? But that's not true for all of them. Today, half of all daily newspapers in the U.S. are controlled by financial firms, according to an analysis by the Financial Times, and the number is almost certain to grow. The pay was terrible and the work was not glamorous, but Glidden loved his job. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. It seemed reasonable to ask that they answer a few questions. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. Yes, today, it's a newspaper without a newsroom. 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. Gerry Smith. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. He says he visited the Tribune's office and was "really shocked by how grim the scene was." Coppins describes Alden as a specific type of firm: a "vulture hedge fund." Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. Craigslist killed the Classified section, Google and Facebook swallowed up the ad market, and a procession of hapless newspaper owners failed to adapt to the digital-media age, making obsolescence inevitable. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. 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. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. "[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. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. He had spoken on this issue before, and it was easy to see why. 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. . At the time, finalternatives.com reported that the Global Distress Opportunities fund would focus on financial firms as well as homebuilding, gaming and auto-related names.. 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 . 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. He used his own money to pull court records, and went years without going on a vacation. The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. That may well be the future of local news, he says. As a privately held hedge fund, Alden doesnt have to reveal much to the public. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. . Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. "A lot of cities almost operate with the assumption that there will be at least one local newspaper, in some cases several local newspapers, acting as a check on the authorities," he says. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. When a reporter asked if their work was still valued, the editor sounded deflated.
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