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. This investment strategy does not come without social consequences. 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. 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. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. 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. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. Its a game, Randy explains to his son. The firm has a history of purchasing newspapers to cut costs wherever . People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. [10][19][20], The company has its origins in R.D. Freeman was only slightly more accessible. . But in the case of local news, nothing comparable is ready to replace these papers when they die. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. That's because the fund is stepping in to buy and then gut newsrooms across the country. Tribune Publishing, publisher of the Chicago Tribune and other major newspapers, has agreed to be acquired by Alden Global Capital in a deal valued at $630 million . Hellman and BNP together own 46.4 per cent of Allfunds' shares. 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. 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 . The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. 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. 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. 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. That gave the journalists at the Sun a brief window to stop the sale from going through. One acquaintance tells The Village Voice that hes the kind of guy who divests himself every couple of years to avoid ending up on lists of the worlds richest people. 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. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. Read: Local news is dying, and Americans have no idea, From 2015 to 2017, he presided over staff reductions of 36 percent across Aldens newspapers, according to an analysis by the NewsGuild (a union that also represents employees of The Atlantic). Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. To replace a paper like the Sun would require a large, talented staff that covers not just government, but sports and schools and restaurants and art. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. 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. In the past 15 years, more than a quarter of American newspapers have gone out of business. But as long as Alden had made back its money, the investment would be a success. 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. It seemed reasonable to ask that they answer a few questions. A search through nonprofit groups publicly available financial reports, commonly known as Form 990s, reveals that all kinds of organizations some surprising have invested their monies with Alden over the years. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Heath hopes the well never runs dry, but hes going to keep pumping until it does. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper. 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, in a . 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. 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. Alden Global Capital has currently bid to buy all of Tribune. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. 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. . It has figured out how to make a profit by driving newspapers into the ground, he says, since Alden's aim is not to make them into long-term sustainable businesses but rather maximize profits quickly to show it has made a winning investment. A spokesman took issue with the entirety of the story, and laid out a long list of questions attacking the integrity of the reporter, The Atlantic and some of his sources without addressing some of the more specific claims within the report. A vulture doesnt hold a wounded animals head underwater. But that's not true for all of them. 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. Aldens Distressed Opportunities Fund was launched in 2008 and saw astounding success in its first few months, showing returns of more than 30 percent a big rescue for Alden, whose investments in Russia the year before had lost more than 61 percent of their value. He used his own money to pull court records, and went years without going on a vacation. When plans for the building were announced in 1922, Colonel Robert R. McCormick, the longtime owner of the Chicago Tribune, said he wanted to erect the worlds most beautiful office building for his beloved newspaper. It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. 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. The 1% own and operate the . , 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. But a sense of fatalism permeated the work. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. 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 . [2] Its managing director is Heath Freeman. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. 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. Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. 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. Convinced that the Sun wont be able to provide the kind of coverage the city needs, he has set out to build a new publication of record from the ground up. [3] [4] With its acquisition of Tribune Publishing in late . 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. Alden Global Capital, the New York hedge fund that bought Tribune Publishing this year, said on Monday that it was making an offer for another big American newspaper chain, Lee . Newspapers Affect Us, Often In Ways We Don't Realize, 'Project Mayhem': Reporters Race To Save Tribune Papers From 'Vulture' Fund. Its not the name or the flag., He may get his wish. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. Bainum told me hed come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. [33], Alden Global Capital's management of American newspapers has been criticized. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. That may well be the future of local news, he says. 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. 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. The pay was terrible and the work was not glamorous, but Glidden loved his job. These papers would have been liquidated if not for us stepping up.. But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. It makes me profoundly sad to think about what the Trib was, what it is, and what its likely to become, says David Axelrod, who was a reporter at the paper before becoming an adviser to Barack Obama. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. 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.
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