In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. The pay was terrible and the work was not glamorous, but Glidden loved his job. Financially, it was a raw deal. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. The question was how. . Those that have survived are smaller, weaker, and more vulnerable to acquisition. [33], Alden Global Capital's management of American newspapers has been criticized. These include the Chicago Tribune, the New York Daily News, and The Baltimore Sun. 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. They had a father-figure relationship, one told me. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. 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. Reinventing their papers could require years of false starts and fine-tuningand, most important, a delayed payday for Aldens investors. Alden, which owns more than 200 newspapers across the country, has developed a reputation for using extensive layoffs and severe cost cuts at the newspapers it owns. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. Read: What we lost when Gannett came to town. After a contentious presidential race and amid a still-raging pandemic, there was a limited supply of outrage and sympathy to spare for local reporters. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. But Glidden felt sure he knew the real reason: Alden wanted him gone. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. Alden began its acquisition of Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. John Temple: My newspaper died 10 years ago. 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. In the past 15 years, more than a quarter of American newspapers have gone out of business. 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. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige. Already the largest shareholder . City budgets balloon, along with corruption and dysfunction. What happens next? Its a hedge that went and bought up some titles that it milks for cash.. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. 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 . 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. So what is this Distressed Opportunities fund? He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. Ken Kelleher is an American sculptor. Rapid-fire changes underway at newspapers sold to cost-slashing hedge fund Alden Global Capital have led to a profound case of the jitters at newsrooms like the New York Daily News. 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. 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. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers web and mobile offerings and increased online ad revenue. 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. 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. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. The details of how Smith got to know him are opaque, but the resulting loyalty was evident. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. . A young man named Randall Duncan SmithRandy for shortstands next to his wife, Kathryn, answering quick-fire trivia questions in front of a live studio audience. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. A vulture doesnt hold a wounded animals head underwater. The shows premise pits two couples against each other for the chance to win a home. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. But outside the industry, few seemed to notice. This was the core of Freemans argument. 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. We were like, Theyre not going to take our newspaper from us! But in the meantime, there isn't really anything that can fill the hole these newspapers will leave if they're shut down. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." So Freeman pivoted. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. 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. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . By the time the FBI caught them, in 2017, the conspiracy had resulted in one dead civilian and a rash of wrongful arrests and convictions. 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. This is a subscription-based business.. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. He had spoken on this issue before, and it was easy to see why. 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. By Julie Reynolds. NPR reached out to Alden for a response. Two days after the deal was finalized, Alden announced an aggressive round of buyouts. These papers would have been liquidated if not for us stepping up.. As a young man, hed studied at divinity school before taking over his fathers company, and decades later he still carried a healthy sense of noblesse oblige. Send any friend a story As a subscriber, you . That's because the fund is stepping in to buy and then gut newsrooms across the country. 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 is a subsidiary of Alden Global Capital, the New York City hedge fund that backed the purchase of and dramatic cost-cutting at more than 100 newspapers causing more than 1,000 lost jobs. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. . But this acquisition was profound, making Alden Global . [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 why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? [4][13], In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. California biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns 24%, Layout design was outsourced to freelancers in the Philippines. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Instead, they gutted the place. Otherwise, youre just peeing in the ocean.. What threatens local newspapers now is not just digital disruption or abstract market forces. By 2011, when Aldens Distressed Opportunities Fund lost more than 20 percent of its value, Knights holdings in the fund were valued at $10.7 million. 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. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. 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. 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 Alden first got into the news business, Freeman seemed willing to indulge some innovation. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. Spend some time around the shell-shocked journalists at the Tribune these days, and youll hear the same question over and over: How did it come to this? I asked. 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 . 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. These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. It turned out that those ownersNew York hedge funders whom Glidden took to calling the lizard peoplewere laser-focused on increasing the papers profit margins. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. "[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. Some have even suggested that this represents Americas last chance to save its local-news industry. Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. 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. ", "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? 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. No response came back. I asked Knight about those investments and whether the Foundations officers had any regrets, knowing what we now do about Aldens devastating effect on its own newspapers. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? It feels like were going up against capitalism now, Lillian Reed, the reporter who helped launch the Save Our Sun campaign, told me. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Senior lenders under the deal were to swap debt for stock. Scott Olson/Getty Images I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and theyd gotten there by dismantling local journalism. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. 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. Much of the Knight family's once-grand newspaper empire was ultimately acquired by Alden Global Capital, while the family foundation invested in Alden funds. 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 . 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. The men killing Americas newspapers, how Slack upended the workplace, and the new meth. It was founded in 2007 by Randall D. Smith. 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. It played with my mind a little bit, Glidden told me. Alden currently owns 32%. 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. He used his own money to pull court records, and went years without going on a vacation. But he says the worst culprit is the hedge fund Alden Global Capital, which bought the Mercury in 2011 and has since sold the paper's building and slashed newsroom staff by about 70%. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. He shut down Project Thunderdome, parted ways with Paton, and placed all of Aldens newspapers on the auction block. "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. Media . The Tribune Company (which owns the newspapers mentioned above) was still turning a profit when Alden bought it, but the hedge fund immediately offered aggressive rounds of buyouts and shrunk its newsrooms in the name of increasing profit margins. About a month after The Baltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. Lee's board of directors . Theyre being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. Misinformation proliferates. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. It was founded in 2007 by Randall D. He declined to meet me in person or to appear on Zoom. 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. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Alden is known for . October 14, 2021. When The New York Times profiles him in 1991, it notes that he excels at profiting from other peoples misery and quotes a parade of disgruntled clients and partners. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Former Knight-Ridder headquarters. In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. 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). But as long as Alden had made back its money, the investment would be a success. Freeman was only slightly more accessible. 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). 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. It was all about the next quarters profit margins, says Matt DeRienzo, who worked as a publisher for Aldens Connecticut newspapers before finally resigning. When it was over, a quarter of the newsroom was gone. Alden Global Capital has currently bid to buy all of Tribune. One, the warning shot was fired in 2011, in a Poynter Institute article titled Who is investor Randall Smith and why is he buying up newspaper companies? Randall Smith is the co-founder of Alden, together with his young protg, Heath Freeman, and has been called the grandfather of vulture investing. Vulture funds by definition dont reinvest in their properties they suck them dry. They want to know who exactly profits when we learn, as Harvard Nieman Lab's Ken Doctor recently reported, that the firm netted $160 million last year from its Digital First Media . Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. [2] Its managing director is Heath Freeman. Morale tanked; reporters burned out. Tribune Publishing last month approved a $630m takeover deal with Alden Global Capital. 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. Other records turned up from public pension funds and filings of publicly traded companies. They are also defined by an obsessive secrecy. When the Chicago Tribune held a Save Local News rally, most of the people who showed up were members of the media. The Ubiquity - The student news site of Quartz Hill High School [4], In 2019, Alden attempted, but failed at, a hostile takeover of Gannett.