"[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. Of course, its easy to romanticize past eras of journalism. Before our interview, Id contacted a number of Aldens reporters to find out what they would ask their boss if they ever had the chance. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. Heath hopes the well never runs dry, but hes going to keep pumping until it does. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. For those who cared about the future of local news, it was hard to imagine a better outcomewhich made it all the more devastating when the bid fell through. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. With full control of Tribune Publishing, Alden Global Capital is scrambling to squeeze out a return on its $600 million investment in the struggling Chicago-based newspaper company. I put the question to Freeman, but he declined to answer on the record. I asked. "Local newspaper brands and operations are the engines that power trusted local news in communities across the United States," Heath Freeman, president of Alden Global Capital, said in a . If Knights total divestment from Alden in 2014 was because someone made an ethical decision to stop dealing with the vulture fund, good for them. [2] Its managing director is Heath Freeman. 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. Alden Global Capital had recently purchased a nearly one-third stake in the Suns parent company, Tribune Publishing, and the firm was signaling that it would soon come for the rest. and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . You need real capital to move the needle, he told me. He can cite decades-old scoops and tell you whom they pissed off. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. Maybe this obscure hedge fund had a plan. The 21st century has seen many of these generational owners flee the industry, to devastating effect. 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. Aldens calculus was simple. A Secretive Hedge Fund Is Gutting Newsrooms. Layout design was outsourced to freelancers in the Philippines. Randy claims no editorial role in the Press, and his investment in the projectwhich has little chance of producing the kind of return hes accustomed tocould be chalked up to brotherly loyalty. 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. 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. They were very tight. Freeman has resisted elaborating on his relationship with Smith, saying simply that they were family friends before going into business together. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. Today, we know that Knight, CalPERS and others no longer invest with Alden. Alden is in the business of making money, not journalism. Well, that wasnt the point. Alden Global Capital already had a 32% stake in Tribune Publishing, which owns famous names like the Tribune, Daily News, the Hartford Courant and others, and on Tuesday announced it would pay . What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. He declined to meet me in person or to appear on Zoom. But in the case of local news, nothing comparable is ready to replace these papers when they die. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. 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. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. 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. The shows premise pits two couples against each other for the chance to win a home. To be sure, the Knight Foundation does much to help promote and sustain local news. The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen beforeromance in stone and steel, as one writer described it. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. [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. When a reporter asked if their work was still valued, the editor sounded deflated. And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. If accepted, the $24 per share purchase price would . 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. Smith. With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers its alienating. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. The 1% own and operate the . Im repulsed by the incestuous world of New York journalism, he tells New York magazine. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. Freeman, his 41-year-old protg and the president of the firm, would be unrecognizable in most of the newsrooms he owns. If you went into a lab to create the perfect bro, Heath would be that creation, says one former executive at an Alden-owned company, who, like others in this story, requested anonymity to speak candidly. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. And two, by at least 2013, those of us who worked at Alden-controlled papers (like me) were already experiencing the slashing and burning. Connecting this to the current state of American newspaper ownership seems rather tenuous.. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it Project Mayhem.. He started as a general-assignment reporter, covering local crime and community events. Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. So Freeman pivoted. . 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. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . 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. City budgets balloon, along with corruption and dysfunction. Two veteran journalists from the Chicago Tribune published an op-ed on Sunday challenging one of the paper's principal owners, the New York hedge fund Alden Global Capital. 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. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. The term vulture capitalism hasnt been invented yet, but Randy will come to be known as a pioneer in the field. "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?" Somehow, no one's buying it. 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 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. 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. Alden Global Capital, a New York-based hedge fund that this year became the second largest newspaper publisher in the United States, has made an offer to purchase Lee Enterprises, the media company that owns 75 daily newspapers, including the St. Louis Post-Dispatch. 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 men killing Americas newspapers, how Slack upended the workplace, and the new meth. 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. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. 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. That gave the journalists at the Sun a brief window to stop the sale from going through. [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. My answer is its hard to know. In a press release Monday, Nov. 22, 2021 Alden said it sent Lee's board a letter with the offer. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. It has not, however, retained the Chicago Tribune. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. This is the story weve been telling for decades about the dying local-news industry, and its not without truth. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters ability to sort the honest politicians from the political whores by exposing abuses of power. 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. Below are highlights from his conversation with Morning Edition's A Martnez. Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. By Julie Reynolds. I asked if anyone there at the time was aware of Aldens vulture business strategy. The firm has a history of purchasing newspapers to cut costs wherever . 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 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 . In 2016 (year of the most recent 990 available), the foundation invested $17 million in Alden funds. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. October 14, 2021. At the time, even savvy media insiders like Martin Langeveld wistfully predicted Alden would keep newspapers future in mind: Smith knows that the only way to win his big bet on the future of newspapers is to turn them into nimble, modern digital news enterprises.. 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. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. Smith began investing in newspapers and media around the same time. The papers printing was moved to a plant more than 100 miles outside town, Glidden told me, which meant that the news arriving on subscribers doorsteps each morning was often more than 24 hours old.