But outside the industry, few seemed to notice. "[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. Theres no industry that I can think of more integral to a working democracy than the local-news business, he said. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. October 14, 2021. Since Alden's . 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. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. 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 wasn't the first newspaper acquisition for this hedge fund firm, nor is it the only firm of its kind eyeing the nation's newspapers. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. 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. 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. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. 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. No response came back. 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. 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. 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%. You have no way of knowing that if you dont have some nosy son of a bitch asking a lot of questions down there, he told me. 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. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. He used his own money to pull court records, and went years without going on a vacation. 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. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. These papers would have been liquidated if not for us stepping up.. AP. Layout design was outsourced to freelancers in the Philippines. 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. From the March 1914 issue: H. L. Mencken on newspaper morals, A story circulated throughout the companypossibly apocryphal, though no one could say for surethat when Freeman was informed that The Denver Post had won a Pulitzer in 2013, his first response was: Does that come with any money?. It was clear that they didnt care about this being a business in the future. 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. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. 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. City budgets balloon, along with corruption and dysfunction. 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. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. Feb 16, 2021 at 8:05 pm. 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. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. The Tribune had been profitable when Alden took over. He had spoken on this issue before, and it was easy to see why. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Aldens investors. I put the question to Freeman, but he declined to answer on the record. 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. At the Pioneer Press , where its staff is down to 60, the paper produced a . Am I going to win against capitalism in America? Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. All good works, and Knight is to be commended for them. It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated. On Monday, Dail and our desire to support local newspapers over the long term." Alden said it wants to work Lee's board of . With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . 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. Media . I asked if anyone there at the time was aware of Aldens vulture business strategy. Plus how Facebook is a hostile foreign power, the engineers daughter, the collapse of music genres, Dostoyevsky, W. G. Sebald, nasty return logistics, and more. He quotes H. L. Mencken, the papers crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. Former Knight-Ridder headquarters. [15][16] In March 2018, Margaret Sullivan, the media columnist for The Washington Post, called Alden "one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism. Even as Aldens portfolio grew, Freeman rarely visited his newspapers. Alden Global Capital, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, has proposed purchasing Lee Enterprises, the Iowa-based owner of the Richmond Times-Dispatch and most other major Virginia newspapers, for approximately $144 million, Alden announced Monday. 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. 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. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. 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 . [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. She was writing about Aldens growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. 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 . The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Alden is known for . On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. Send any friend a story As a subscriber, you . 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. My answer is its hard to know. 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. Well, he told me, they have some very good reporters., This article appears in the November 2021 print edition with the headline The Men Who Are Killing Americas Newspapers., A Secretive Hedge Fund Is Gutting Newsrooms, I Dont Know That I Would Even Call It Meth Anymore, W. G. Sebald Ransacked Jewish Lives for His Fictions. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. Around this time, Randy becomes preoccupied with privacy. 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. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing. My request for an interview with Smith was dismissed by his spokesperson before I finished asking. And everyone knows its going to run dry.. By Julie Reynolds. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. 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. It has not, however, retained the Chicago Tribune. When he did, he exhibited a casual contempt for the journalists who worked there. 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." Youd be surprised. 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 . 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. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. Its the meanness and the elegance of the capitalist marketplace brought to newspapers, Doctor told me. He writes a weekly column called Mugger that savages the citys journalists by name and frequently runs to 10,000 words. 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. 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. 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. | Michael Gray, WIkimedia Commons. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Now it might be facing extinction. When the city-hall reporter left a few months later, he picked up that beat too. It was founded in 2007 by Randall D. 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. Freeman was more animated when he turned to the prospect of extracting money from Big Tech. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . 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 . But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. 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. 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). This is the story weve been telling for decades about the dying local-news industry, and its not without truth. It was founded in 2007 by Randall D. Smith. 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. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. How do you know who wins? the boy asks. In the past 15 years, more than a quarter of American newspapers have gone out of business. But this acquisition was profound, making Alden Global . 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. Some have even suggested that this represents Americas last chance to save its local-news industry. 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 audio for this interview was produced by Ryan Benk and edited by Scott Saloway. NPR reached out to Alden for a response. But whats happening in Chicago is different. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. Maybe theyd cancel their subscriptions eventually; maybe the papers would fold altogether. Senior lenders under the deal were to swap debt for stock. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. It felt important. But for Simon, that paper exists entirely in the past. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. Enter the email address you signed up with and we'll email you a reset link. But I had underestimated how little Aldens founders care about their standing in the journalism world. 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.