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Some have even suggested that this represents Americas last chance to save its local-news industry. That may well be the future of local news, he says. They could be vain, bumbling, even corrupt. After all, it has a long and venerable history of supporting local news. 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. Connecting this to the current state of American newspaper ownership seems rather tenuous.. 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. 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. "The question is, will local communities decide that this is an important issue, that it's worth saving these newspapers, protecting them from firms like Alden, or will they decide that they don't really care?" 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. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. Heath hopes the well never runs dry, but hes going to keep pumping until it does. [2][3] By mid-2020, Alden had stakes in roughly two hundred American newspapers. [3] [4] With its acquisition of Tribune Publishing in late . When hed agreed to the interview, Id expected him to say the things he was supposed to saythat the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. 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. Knight spokesman Andrew Sherry declined to answer any of those questions, saying instead, Our endowment investments support our grantmaking., We invested approximately one half of one percent of our endowment in an Alden fund between late 2009 and early 2014, he said via email. When I asked Freeman what he thought was broken about the newspaper industry, he launched into a monologue that was laden with jargon and light on insightsummarizing what has been the conventional wisdom for a decade as though it were Aldens discovery. 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 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). [8][24] Tribune Publishing publishes nine major metropolitan dailies. I asked. 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. 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. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. 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. 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.. They are also defined by an obsessive secrecy. Prior to the buildings completion, McCormick directed his foreign correspondents to collect fragments of various historical sitesa brick from the Great Wall of China, an emblem from St. Peters Basilicaand send them back to be embedded in the towers facade. 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. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. The company has been growing its portfolio and as of May 2021, owns over 100 newspapers and 200 assorted other publications. The audio for this interview was produced by Ryan Benk and edited by Scott Saloway. Russ Smith is a puckish libertarian whose self-described contempt for the journalistic class animates the pages of the publication. 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. No response came back. A Cornell grad with an M.B.A., Randy is on a partner track at Bear Stearns, where hes poised to make a comfortable fortune simply by climbing the ladder. But for Simon, that paper exists entirely in the past. But as long as Alden had made back its money, the investment would be a success. 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. A century later, the Tribune Tower has retained its grandeur. 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 . . To him, its the same as oil, the publisher said. Knight first reported its investment in Alden in 2010, noting the fair market value of its Alden holdings was $13.4 million. He had spoken on this issue before, and it was easy to see why. 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. 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. Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. Frustrated and worn out, Glidden broke down one day last spring when a reporter from The Washington Post called. That gave the journalists at the Sun a brief window to stop the sale from going through. Now he was feeling the effects of their management. This is a subscription-based business.. 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. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. [14], Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. Feb. 16, 2021 8:04 PM PT. Other large shareholders include Californian asset manager Capital Group and UK fund manager Jupiter Asset Management. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. According to its 990s, Knight ended up making $185,000 over five years on its initial $13.4 million investment. Already the largest shareholder . Meanwhile, in Vallejo, John Glidden went from covering crime and community news to holding the title of the only hard news reporter in town, filling a legal pad with tips he knew he'd never have time to pursue. He can cite decades-old scoops and tell you whom they pissed off. Alden Global Capital, a hedge fund known for gutting local newsrooms, is seeking to buy Lee Enterprises (LEE), a publicly traded company with a chain of daily newspapers and other publications . The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. . 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. Aldens website contains no information beyond the firms name, and its list of investors is kept strictly confidential. [13], In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. 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. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. The Ubiquity - The student news site of Quartz Hill High School "[17] and Vanity Fair dubbed Alden the "grim reaper of American newspapers. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. 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. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. (Freeman denied this through a spokesperson.) It has filed a lawsuit in its bid to buy out news publisher Lee Enterprises. When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. Alden is not a newspaper company, says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister. [7][8] Alden's purchase price was $635 million, or $17.25 per share. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. "And what we've seen in a lot of these places where newspapers have been scaled back or even closed is there really is no comparable product in place, whether it's by the government or by another news organization, to do what these local newspapers have done for hundreds of years.". All good works, and Knight is to be commended for them. "[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. Media . After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. 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. 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. 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. More to the point, Tribune Publishingwhich represents a substantial portion of Aldens titleswas profitable at the time of the acquisition. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner. "[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. Or to Denver, where the Posts staff was cut by two-thirds, evicted from its newsroom, and relocated to a plant in an area with poor air quality, where some employees developed breathing problems. So who is investing with them? To David Simon, the whimpering end of The Baltimore Sun feels both inevitable and infuriating. Alden's holdings already spanned the country, including the . But Glidden felt sure he knew the real reason: Alden wanted him gone. 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. 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. But a sense of fatalism permeated the work. [33], Alden Global Capital's management of American newspapers has been criticized. He studied art at Alfred University under sculptors Glenn Zweygardt and William Parry. This story originally appeared on the Morning Edition live blog. This summer, Alden Global Capital acquired Tribune Publishing and its titles, from small community newspapers to major metro titles like its flagship, The Chicago Tribune, and The Baltimore Sun. And everyone knows its going to run dry.. * Edited from 'independent . But while its true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. In the past 15 years, more than a quarter of American newspapers have gone out of business. The firm has a history of purchasing newspapers to cut costs wherever . Have you heard of the hedge fund Alden Global Capital? 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 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. 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. [11], In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. 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. [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. I asked if anyone there at the time was aware of Aldens vulture business strategy. Alden Global Capital swallowed all of the Tribune's newspapers, including the New York Daily News, earlier in 2021. hide caption. It seemed reasonable to ask that they answer a few questions. 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. Heath Freeman in an undated photo provided by Goldin Solutions . Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Aldens commitment to cost-cutting as a badge of honorthe thing that distinguished him from the saps and cowards who made up Americas previous generation of newspaper owners. 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. 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. The newsroom was moved to a single room rented from the local chamber of commerce. 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. They call Alden a vulture hedge fund, and I think thats honestly a misnomer, Johnson said. The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of . 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. 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%. But even for a group of journalists, it was tough to keep the publics attention. In recent months, hes been meeting with leaders of local-news start-ups across the countryThe Texas Tribune, the Daily Memphian, The City in New Yorkand collecting best practices. [10][19][20], The company has its origins in R.D. 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. But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. A native of Vallejo, he was proud to work for his hometown paper. 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. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Below are highlights from his conversation with Morning Edition's A Martnez. Coppins notes that there's even some research indicating that city budgets increase as a result, because corruption and dysfunction can take hold without a newspaper to hold powerful people to account.