Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. "[18], Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. Nov. 22, 2021. 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. At the Pioneer Press , where its staff is down to 60, the paper produced a . By Julie Reynolds. 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. By that point, Alden was widely known as the grim reaper of American newspapers, as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry. 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?. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. 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. 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. 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. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. You need real capital to move the needle, he told me. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. 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. 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. 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. Well, that wasnt the point. At their worst, they used their papers to maintain oppressive social hierarchies. Coppins describes Alden as a specific type of firm: a "vulture hedge fund." 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. Shareholders of Tribune Publishing, one of the country's largest newspaper chains, on Friday approved a takeover by hedge fund Alden Global Capital. Youd be surprised. But by 2013, despite deep losses to Alden funds overall values in the previous two years, Smith was able to begin buying his now infamous swath of South Florida mansions for $58 million and Freeman was acquiring multi-million-dollar New York condos. The newspaper lost a quarter of its staff to buyouts after it was acquired by Alden Global Capital in May. . Alden is known for . But beneath all the recriminations and infighting was a cruel reality: When faced with the likely decimation of the countrys largest local newspapers, most Americans didnt seem to care very much. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. Gerry Smith. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. In addition to the constant layoffs, our buildings were being sold, basic office supplies became scarce and the hot water stopped working. 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. This was the core of Freemans argument. I put the question to Freeman, but he declined to answer on the record. 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. he asks. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. 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. 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. 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. 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. Research shows that when local newspapers disappear or are dramatically gutted, communities tend to see lower voter turnout, increased polarization, a general erosion of civic engagement and an environment in which misinformation and conspiracy theories can spread more easily. Traditional newspaper business model says you make 95% of your money off ad sales and the rest off subscriptions. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Collectively, they control about one-half of daily newspapers in the U.S. That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his fathers death. It has not, however, retained the Chicago Tribune. 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.. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. To industry observers, Aldens brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. 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. That gave the journalists at the Sun a brief window to stop the sale from going through. 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. Eventually he was the only news reporter left on staff, charged with covering the citys police, schools, government, courts, hospitals, and businesses. Alden, which has built a reputation as one of the newspaper industry's most aggressive cost-cutters, became Tribune Publishing's largest shareholder in November 2019 and owns a 31.3% stake. On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. "[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. But I had underestimated how little Aldens founders care about their standing in the journalism world. Instead, they gutted the place. In a news release Monday, Alden said it sent Lee's board a letter with the offer. 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 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. Read: What we lost when Gannett came to town. "[25], In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today. ", "The most feared owner in American journalism looks set to take some of its greatest assets", "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty', "What does the Chicago Tribune sale mean for the future of newsrooms? 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. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. It was founded in 2007 by Randall D. Smith. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. For two men who employ thousands of journalists, remarkably little is known about them. Freemans father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. 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. Some have even suggested that this represents Americas last chance to save its local-news industry. Those that have survived are smaller, weaker, and more vulnerable to acquisition. Smith, a reclusive Palm Beach septuagenarian, hasnt granted a press interview since the 1980s. by Magnus Shaw..An enormous advertising company (Leo Burnett) and a small creative film company (Asylum) have had a difficult couple of weeks. So why be surprised that Knight-Ridder or anyone else is investing in destructive but profitable ventures? He used his own money to pull court records, and went years without going on a vacation. On the surface, the answer might seem obvious. Now it might be facing extinction. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. 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. Scott Olson/Getty Images Newspaper publisher Lee Enterprises is asking its shareholders to help it fight off a hostile takeover . Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard. The question was how. 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. But in the case of local news, nothing comparable is ready to replace these papers when they die. Some in the city started to wonder if the paper was even worth saving. [2] [3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. By the 1980s, this strategy has made Randy luxuriously wealthyvacations in the French Riviera, a family compound outside New York Cityand he has begun to school his children on the wonders of capitalism. The pay was terrible and the work was not glamorous, but Glidden loved his job. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. A native of Vallejo, he was proud to work for his hometown paper. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. 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. These papers would have been liquidated if not for us stepping up.. So Freeman pivoted. 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. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment.
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