Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. On Monday, Dail "[21], shareholder rights plan, colloquially known as a "poison pill", "Alden Global Capital LLC NEW YORK , NY", "Company Overview of Alden Global Capital LLC", "Heath Freeman of Alden Global Capital says he wants to save local news. Alden Global Capital owns 56 dailies under Digital First Media (Alden also owns 32% of Tribune 10 dailies in Column C.) Tribune Media owns 10 dailies. Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. "[28], In mid-February 2022, the Delaware court found in favor of Lee Enterprises. The Tribune Tower, the iconic former home of the Chicago Tribune, seen in Chicago, Illinois in 2015. Am I going to win against capitalism in America? 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.. When it was over, a quarter of the newsroom was gone. The 21st century has seen many of these generational owners flee the industry, to devastating effect. Hedge fund Alden Global Capital is attempting to acquire Davenport-based Lee Enterprises, one of the country's largest newspaper chains, in all the markings of a hostile takeover. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product. [4], Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. 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. 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?. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. Freeman would show up at business meetings straight from the gym, clad in athleisure, the executive recalled, and would find excuses to invoke his college-football heroics, saying things like When I played football at Duke, I learned some lessons about leadership. (Freeman was a walk-on placekicker on a team that won no games the year he played.). It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . 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. This was the core of Freemans argument. They had a father-figure relationship, one told me. (Freeman denied this characterization through a spokesperson. But even for a group of journalists, it was tough to keep the publics attention. ), Crucially, the profits generated by Aldens newspapers did not go toward rebuilding newsrooms. 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. Heath Freeman, president of Alden Global Capital, is known for pushing big cost reductions, which he says help to save newspapers. The 1% own and operate the . 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. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. Some in the city started to wonder if the paper was even worth saving. For two men who employ thousands of journalists, remarkably little is known about them. Glidden had heard rumblings about the papers owners when he first took the job, but he hadnt paid much attention. I put the question to Freeman, but he declined to answer on the record. It's newspaper-endorsement season again, and that means it's Should newspapers do endorsements?season again. Send any friend a story As a subscriber, you . Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Its a game, Randy explains to his son. Its a hedge that went and bought up some titles that it milks for cash.. People who know him described Freemanwith his shellacked curls, perma-stubble, and omnipresent smirkas the archetypal Wall Street frat boy. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. Enter the email address you signed up with and we'll email you a reset link. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. Alden Global Capital already owns 200 publications and a 6% stake in Lee Enterprises. 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 . 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. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. 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. 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. He gained 100 pounds and started grinding his teeth at night. 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. 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. Hedge fund Alden Global Capital, known for making deep newsroom cuts, won approval to acquire Tribune Publishing, which includes the Chicago Tribune, The Baltimore Sun and New York Daily News. Yes, today, it's a newspaper without a newsroom. 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. Alden is known for . 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. He was fired after criticizing Alden in a Washington Post interview. 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. 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. Meanwhile, the Tribunes remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspapers most basic functions. It felt important. It hurts to see the paper like this, he told her. [8][24] Tribune Publishing publishes nine major metropolitan dailies. 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 practical effect of the death of local journalism is that you get what weve had, he told me, which is a halcyon time for corruption and mismanagement and basically misrule.. Hes acutely aware of the risksI may end up with egg on my face, he saidbut he believes its worth trying to develop a successful model that could be replicated in other markets. 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. With Alden in control, he believes the Sun is now a prisoner that stands little chance of escape. As the months passed, things kept getting worse. Around this time, Randy becomes preoccupied with privacy. On . What threatens local newspapers now is not just digital disruption or abstract market forces. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. It . [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. 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. Coordinated by . 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? Prior to the acquisition of the Tribune Company, we purchased substantially all of our newspapers out of bankruptcy or close to liquidation, he told me. In budget meetings, according to the former executive, Freeman hectored local publishers, demanding that they produce detailed numbers off the top of their head and then humiliating them when they couldnt. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). The details of how Smith got to know him are opaque, but the resulting loyalty was evident. We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. 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. It was founded in 2007 by Randall D. Smith. Updated May 21, 2021 at 2:13 PM ET. 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." 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. Financially, it was a raw deal. Heath Freeman in an undated photo provided by Goldin Solutions . "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 . [2] Its managing director is Heath Freeman. Shares of Lee Enterprises Inc. rose sharply Monday after hedge fund Alden Global Capital LLC offered to buy the newspaper publisher for about $141 million. Even in the greed is good climate of the era, Randy is a polarizing character on Wall Street. Scott Olson/Getty Images Hellman and BNP together own 46.4 per cent of Allfunds' shares. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. 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. Alden Capital's gutting of the Denver Post is the most discussed example of this, but there are many others. John Temple: My newspaper died 10 years ago. He said that he still appreciated their journalism, but that he couldnt speak for his corporate bosses. This company that owns us now seems to still be prettyI dont even know how to put it, the editor said, according to a recording of the meeting obtained by The Atlantic. But outside the industry, few seemed to notice. 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%. Freeman was only slightly more accessible. Alden gradually took control of the papers that would become DFM. October 14, 2021. 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. It's a tangled tale but essentially Asylum produced a film for the McDonald's charitable foundation for Leo. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. 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. After serving in the Carter administrations Treasury Department, Brian became widely knownand fearedin the 80s for his hard-line negotiating style. He teaches his 8-year-old son, Caleb, to make trades on a Quotron computer, and imparts the value of delayed gratification by reportedly postponing his familys Christmas so that he can use all their available cash to buy stocks at lower prices in December. 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. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. The Banner will launch with about 50 journalistsnot far from the size of the Sunand an ambitious mandate. NPR reached out to Alden for a response. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. How exactly Randall Smith chose Heath Freeman as his protg is a matter of speculation among those who have worked for the two of them. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. but sadly on a global scale there is hardly any independent news sources left currently. [21], Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. 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. 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. Misinformation proliferates. Theres little evidence that Alden cares about the sustainability of its newspapers. 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. Three days later, Bainumstill smarting from his experience with Alden, but worried about the Suns fatesent a pride-swallowing email to Freeman. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. We were like, Theyre not going to take our newspaper from us! Many of the operators were looking at the newspaper business as a local advertising business, he said, and we didnt believe that was the right way to look at it. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. Coppins offers several examples, like the Chicago Tribune and California's Vallejo Times-Herald. Here was one of Americas most storied newspapersa publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizesreduced to a newsroom the size of a Chipotle. [32], The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. At one point, I tracked down the photographer whod taken the only existing picture of Smith on the internet. A former Sun reporter whose work on the police beat famously led to his creation of The Wire on HBO, Simon told me the paper had suffered for years under a series of blundering corporate ownersand it was only a matter of time before an enterprise as cold-blooded as Alden finally put it out of its misery. MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado -based newspaper publisher owned by Alden Global Capital. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? Heath hopes the well never runs dry, but hes going to keep pumping until it does. 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. Aldens calculus was simple. 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. Many in the journalism industry, watching lawsuits play out in Australia and Europe, have held out hope in recent years that Google and Facebook will be compelled to share their advertising revenue with the local outlets whose content populates their platforms.
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