When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. 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. It was clear that they didnt care about this being a business in the future. It felt important. But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. "[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. Alden, a New York City-based firm that has become the grim reaper of American newspapers, had recently increased its stake in Tribune Publishing to 32%making it the largest shareholder of the . What threatens local newspapers now is not just digital disruption or abstract market forces. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. he asks. Some have even suggested that this represents Americas last chance to save its local-news industry. In the for-profit news arena, Knight is spurring the digital transformation of local newsrooms through the Knight-Lenfest Newsroom Initiative, Sherry said. But outside the industry, few seemed to notice. Otherwise, youre just peeing in the ocean.. By McKay Coppins. Former Knight-Ridder headquarters. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. (Freeman has, in the past, disputed Bainums account of the negotiations.) This investment strategy does not come without social consequences. In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. 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 . Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. 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. . In the past 15 years, more than a quarter of American newspapers have gone out of business. 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 that's not true for all of them. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. The Alden Global Capital . Probably not.. Alden's holdings already spanned the country, including the . One conclusions even these reporters are hesitant to make is that we are all dealing within a capitalist system which has none, or few, principles to guide itself, apart from making a profit, no matter how. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. He says he visited the Tribune's office and was "really shocked by how grim the scene was." 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. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. 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. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. Maybe this obscure hedge fund had a plan. Alden currently owns 32%. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. 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. 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. Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms. New York hedge fund and U.S. newspaper consolidator Alden Global Capital LLC has made a proposal to take Lee Enterprises Inc. private in a deal that values the company at around $141 million. The 5 global Trends in Journalism: 1 We've moved from a world where media organizations were gatekeepers to a world where media still creates the news agenda, but platform companies control access to audiences 2 this move to digital media generally does not generate filter bubbles Instead automated Serendipity + incidental exposure drive people . 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. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. But in the case of local news, nothing comparable is ready to replace these papers when they die. The pitch had a certain romantic appeal to the reporters in the room. , 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. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. It seemed reasonable to ask that they answer a few questions. But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. To many, it just didnt seem possible that Alden would instead choose to destroy newspapers by laying off the workforce en masse and stripping papers of all their assets. Coordinated by . Prior to the acquisition of the Tribune Company, we purchased substantially all of our newspapers out of bankruptcy or close to liquidation, he told me. 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. 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. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. They could be vain, bumbling, even corrupt. The 21st century has seen many of these generational owners flee the industry, to devastating effect. about two hundred American newspapers. 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." How do you know who wins? the boy asks. After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his fathers death. 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. A reporter at one of his newspapers suggested I try doorstepping Smithshowing up at his home unannounced to ask questions from the porch. 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.. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. Hellman and BNP together own 46.4 per cent of Allfunds' shares. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. Alden Global Capital is a hedge fund based in Manhattan, New York City. But for all the theatrics, his marching orders were always the same: Cut more. Its World War II correspondent brought firsthand news of Nazi concentration camps to American readers; its editorial page had the power to make or break political careers in Maryland. 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. 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? Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. Alden is in the business of making money, not journalism. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. 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. Alden Global Capital has currently bid to buy all of Tribune. 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. 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. 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. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. For Baltimore to avoid a similar fate, Simon told me, something new would have to come alonga spiritual heir to the Sun: A newspaper is its contents and the people who make it. Its not as if the Tribune is just withering on the vine despite the best efforts of the gardeners, Charlie Johnson, a former Metro reporter, told me after the latest round of buyouts this summer. For a fleeting moment, Aldens newspapers became unexpected darlings of the journalism industrywritten about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. When he did, he exhibited a casual contempt for the journalists who worked there. Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. 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. Collectively, they control about one-half of daily newspapers in the U.S. But I had underestimated how little Aldens founders care about their standing in the journalism world. [10][19][20], The company has its origins in R.D. No response came back. 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. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. "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. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. What happens next? The details of how Smith got to know him are opaque, but the resulting loyalty was evident. With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the countrys most famous and influential: the Chicago Tribune, The Baltimore Sun, the New York Daily News. That gave the journalists at the Sun a brief window to stop the sale from going through. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? 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. Smith & Company. For Freeman and his investors to come out ahead, they didnt need to worry about the long-term health of the assetsthey just needed to maximize profits as quickly as possible. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! A century later, the Tribune Tower has retained its grandeur. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. He gained 100 pounds and started grinding his teeth at night. 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. 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. According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. Other records turned up from public pension funds and filings of publicly traded companies. So who is investing with them? 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. All good works, and Knight is to be commended for them.