Orders for non-defence capital goods excluding aircraft a closely watched proxy for business investment, rose 0.8 per cent in January from a month earlier, comfortably above economists . That might sound like a losing formula, but these papers dont have to become sustainable businesses for Smith and Freeman to make money. A vulture doesnt hold a wounded animals head underwater. And everyone knows its going to run dry.. Interestingly, Smiths foundation didnt do well with its Alden investments in 2016. But we dont know, because they arent saying. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. 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. Alden, which already owned one-third of . . But he couldnt help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force. What happens next? 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 . Its World War II correspondent brought firsthand news of Nazi concentration camps to American readers; its editorial page had the power to make or break political careers in Maryland. 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.. [30], Alden Global Capital includes a real estate division called Twenty Lake Holdings, which primarily buys excess real estate from newspapers. I would know he didnt mean it, and he would know he didnt mean it, but he would at least go through the motions. The families that used to own the bulk of Americas local newspapersthe Bonfilses of Denver, the Chandlers of Los Angeleswere never perfect stewards. 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. When he did, he exhibited a casual contempt for the journalists who worked there. 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. At the time, finalternatives.com reported that the Global Distress Opportunities fund would focus on financial firms as well as homebuilding, gaming and auto-related names.. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. [4][5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune Publishing and became the second-largest newspaper publisher in the United States. But whats happening in Chicago is different. 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 . 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. The purchase represents the culmination of Alden's years-long drive to take over the company and its storied titles . These papers would have been liquidated if not for us stepping up.. Like many alumni of the Sun, Simon is steeped in the papers history. The Alden Global Capital . The 21st century has seen many of these generational owners flee the industry, to devastating effect. 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. I asked if anyone there at the time was aware of Aldens vulture business strategy. Alden Global Capital is a hedge fund based in Manhattan, New York City. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. 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 New York-based hedge fund Alden Global Capital - known for slashing its newspapers' budgets to extract escalated profits - won shareholder approval Friday for its $633 million bid to acquire the Tribune Publishing newspaper chain.. Morale tanked; reporters burned out. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. [7][8] Alden's purchase price was $635 million, or $17.25 per share. 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. Instead, the money was used to finance the hedge funds other ventures. (Freeman denied this through a spokesperson.) "[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. 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. If you're a reader of local newspapers particularly the Chicago Tribune, The Baltimore Sun or New York Daily News you're going to want to make sure the answer is yes. If accepted, the $24 per share purchase price would . At the Suns peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. As a reporter whos covered Alden Global Capital for more than two years, people often ask me who are the investors behind the hedge fund that owns one of Americas largest newspaper chains? In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. You could look to Oakland, California, where the East Bay Times laid off 20 people one week after the paper won a Pulitzer. 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. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. 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. 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. 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. ", "Hedge Fund Reaches a Deal to Buy Tribune Publishing", "Opinion - Will The Chicago Tribune Be the Next Newspaper Picked to the Bone? Others pointed to Bainums financing partner, who pulled out of the deal at the 11th hour. 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. These included several Cayman Island-based funds and another profiting from Greek debt stemming from that countrys financial crisis. The pay was terrible and the work was not glamorous, but Glidden loved his job. It's traded in a prestigious downtown newsroom for a "Chipotle-sized office" near the printing press. 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. These were not exactly boom times for newspapers, after allat least someone wanted to buy them. [10][19][20], The company has its origins in R.D. This once-proud publication is now owned and run by Alden Global Capital, a multibillion-dollar hedge fund with a long record of buying papers on the cheap, selling off their assets and slashing pay and jobs. But for Simon, that paper exists entirely in the past. 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. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. (Freeman denied this characterization through a spokesperson. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. Chicago-based Tribune Publishing on Tuesday announced a proposed sale to hedge fund Alden Global Capital in a deal valued at $630 million. 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 . Some have even suggested that this represents Americas last chance to save its local-news industry. I sort of bully people around to get stuff done, he boasted to The Washington Post in 1985. Instead, they gutted the place. [12] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. Lee Enterprises owns 77 daily newspapers, including the Buffalo News, Omaha World-Herald and the Tulsa World. At the end of last month, Alden Global Capital, a notorious newspaper-owning hedge fund, sought to stake its claim on one of the last newspaper chains it hasn't yet touched: Lee Enterprises, which owns 90 publications across the country.Alden, which currently owns six percent of Lee's stock, sent an unsolicited offer to purchase the newspaper chain for $24 per share. According to Aldens scarce SEC filings, it currently has fewer than 10 investors, most of them from overseas. But who most of those few souls are, and how much of the hundreds of millions skimmed from DFM papers theyve received remains a deep, dark mystery. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. 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. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. 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. My answer is its hard to know. Its a game, Randy explains to his son. In May, The Alden Global Capital a hedge fund, acquired Tribune Publishing TPCO for $633 million. 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. We were like, Theyre not going to take our newspaper from us! 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 a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. 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. When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. So what is this Distressed Opportunities fund? 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. A recent Financial Times analysis found that half of all daily newspapers in the U.S. are controlled by financial firms, and Coppins says that number is all but certain to keep growing. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. Im repulsed by the incestuous world of New York journalism, he tells New York magazine. [33], Alden Global Capital's management of American newspapers has been criticized. They are also defined by an obsessive secrecy. He used his own money to pull court records, and went years without going on a vacation. Hes impressed by their journalism, he told me, but his clearest takeaway is that theyre not nearly well funded enough. Some in the industry say they wouldnt be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history. John Temple: My newspaper died 10 years ago. That may well be the future of local news, he says.
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