He gained 100 pounds and started grinding his teeth at night. When lawmakers pressed for details last year on who funds Alden, the company replied that there may be certain legal entities and organizational structures formed outside of the United States.. It was founded in 2007 by Randall D. Smith. ", "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? In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. Alden Global Capital pushes to reshape Lee Enterprises board Is this company saving newspapers or profiting from their demise? - The Alden Global to buy Tribune Publishing for $630 million - Los Angeles Times NPR reached out to Alden for a response. Tribune shareholders approve takeover by Alden Global Capital This once-proud publication is now owned and run by Alden Global Capital, a multibillion-dollar hedge fund with a long record of buying papers on the cheap, selling off their assets and slashing pay and jobs. Some have even suggested that this represents Americas last chance to save its local-news industry. Well, that wasnt the point. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. 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 . The model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self. In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldnt manipulate, and the photographer who had produced beautiful portraits of the states undocumented immigrants, and the investigative reporter whod helped expose the governors offshore shell companies. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. After all, it has a long and venerable history of supporting local news. 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. 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. 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 . I put the question to Freeman, but he declined to answer on the record. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. He took particular pride in finding novel ways to give away his family fortune, funding child-poverty initiatives in Baltimore and prenatal care for women in Liberia. Scott Olson/Getty Images In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. The shadow of hedge fund and corporate ownership leaves newsrooms in Alden's holdings already spanned the country, including the . ", "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? Today, we know that Knight, CalPERS and others no longer invest with Alden. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Vallejo deserves better. A few weeks after the story came out, he was fired. Am I going to win against capitalism in America? The Tribune had been profitable when Alden took over. 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 Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. [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. Somehow, no one's buying it. 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. 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? When I asked Freeman what he thought was broken about the newspaper industry, he launched into a monologue that was laden with jargon and light on insightsummarizing what has been the conventional wisdom for a decade as though it were Aldens discovery. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. I asked. When the city-hall reporter left a few months later, he picked up that beat too. You need real capital to move the needle, he told me. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. 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. Coordinated by . When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. 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. Meet the Hedge Fund Boss Who Just Bought Tribune's Newspapers 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. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Alden, which took Chicago-based newspaper chain Tribune Publishing private in May, said it made a proposal to buy Lee for $24 a share in cash, a 30% premium to Friday's closing price for . 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. Like many alumni of the Sun, Simon is steeped in the papers history. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Otherwise, youre just peeing in the ocean.. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. Freeman never responded. They could be vain, bumbling, even corrupt. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. "The question is, will local communities decide that this is an important issue, that it's worth saving these newspapers, protecting them from firms like Alden, or will they decide that they don't really care?" Enter the email address you signed up with and we'll email you a reset link. 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. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. So who is investing with them? Coppins describes Alden as a specific type of firm: a "vulture hedge fund." When the Smiths win, they pass on the house and take the cash prize insteada $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. 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. 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. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. Of course, its easy to romanticize past eras of journalism. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! Those that have survived are smaller, weaker, and more vulnerable to acquisition. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. In truth, Freeman didnt seem particularly interested in defending Aldens reputation.
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