Heath Freeman in an undated photo provided by Goldin Solutions . [13], Newspapers in Alden's portfolio include Chicago Tribune, The Denver Post, the St. Paul Pioneer Press, the Boston Herald, The Mercury News, East Bay Times, The Orange County Register, and Orlando Sentinel. In early 2011, Alden was still considered a non-controlling investor, but by the end of the year, that would change. The bid by Alden Global Capital, which already owns about 200 local newspapers, had faced resistance from Tribune staff and last-ditch competition. 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.. Baltimore is an underdog town, Liz Bowie, a Sun reporter who was at the meeting, told me. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Aldens papers might try to follow. Alden Global Capital, the hedge fund that owns the Chicago Tribune and New York Daily News, offered to buy Lee Enterprises Inc. for about $142 million, seeking a larger share of the . Instead, they gutted the place. NPR reached out to Alden for a response. It was clear that they didnt care about this being a business in the future. 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 that would require slow, painstaking workand there are easier ways to make money. 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. It has not, however, retained the Chicago Tribune. Feeling burned by the hedge fund, Bainum decided to make a last-minute bid for all of Tribune Publishings newspapers, pledging to line up responsible buyers in each market. But in the case of local news, nothing comparable is ready to replace these papers when they die. 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. The 1% own and operate the . 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." Hedge fund Alden Global Capital in hunt for big newspaper chain Lee 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 . A Secretive Hedge Fund Is Gutting Newsrooms. [3] [4] With its acquisition of Tribune Publishing in late . We were in collective revolt, Lillian Reed, a Sun reporter who helped organize the campaign, told me. 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? 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. 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. 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. I asked, What is the Foundations perspective on those investments now, as news of Aldens gutting of these newspapers has come to light?. On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers. But the group that jumps out to me on the list is the John S. and James L. Knight Foundation. The $633 million sale made Alden the nation's second largest newspaper owner in terms of circulation, with more than 200 newspapers. . They had a father-figure relationship, one told me. 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. 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. Alden Global Capital is a hedge fund based in Manhattan, New York City. 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. 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. Media . 'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers, Stop The Presses! The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. Freeman never responded. The endorsement debate swings around again - Columbia Journalism Review When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. Live news updates from February 28: Tesla to build Mexico - ft.com What happens next? 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. Tuesday, 23 November 2021 07:46 PM EST. 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. 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. A month after he started, one of his fellow reporters left and Glidden was asked to start covering schools in addition to his other responsibilities. After college he worked at Hudson Studio, Art Foundry in Niverville, NY . Inside Alden Global Capital. 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.. Knight began selling off its Alden holdings in 2012, and got completely out in 2014. [29] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. Lee Enterprises holds off an Alden takeoverfor now Billionaires battle for Tribune Publishing | The Economist For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Aldens strategy. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didnt have a reporter in Springfield to follow the resulting scandal. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalistsand thats probably fine by them. 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. Im worried the worst is yet to come. 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. The pitch had a certain romantic appeal to the reporters in the room. Unless the Tribunes trajectory changes, Chicago may soon provide a grim case study. For Freeman, newspapers are financial assets and nothing morenumbers to be rearranged on spreadsheets until they produce the maximum returns for investors. 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. What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. The one central theme, the Times reports, seems to be that Smith and its web of affiliates are out, first and foremost, for themselves. If this reputation bothers Randy and his colleagues, they dont let on: For a while, according to The Village Voice, his firm proudly hangs a painting of a vulture in its lobby. (Freeman denied this through a spokesperson.) 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. 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. Iowa-based Lee Enterprises asks investors to help fight off hedge fund Alden Global Capital. By the charitys own accounting, it lost $ 2.3 million in book value on a $17 million investment that year. No response came back. [4] [5] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune . I put the question to Freeman, but he declined to answer on the record. Margaret Sullivan: The Constitution doesnt work without local news. G ARY MARX and David Jackson, two veteran investigative reporters at the Chicago Tribune, spent most of last year seeking potential buyers who might save their newspaper from Alden Global Capital . Through it all, the owners maintained their ruthless silencespurning interview requests and declining to articulate their plans for the paper. 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. Smith & Company. He says he visited the Tribune's office and was "really shocked by how grim the scene was." Instead, they gutted the place. By McKay Coppins. 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. It was like watching a slow-motion disaster, says Gregory Pratt, a reporter at the Chicago Tribune. For two men who employ thousands of journalists, remarkably little is known about them. Hedge fund Alden in hunt for another big newspaper chain Opinions - Help yourself. Is it ever okay to nick an idea? It was founded in 2007 by Randall D. Smith. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. 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. 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. It felt important. Clearly, for Smith and Freeman, chop-shopping their newspapers paid off. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company. "[26] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. 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. The shadow of hedge fund and corporate ownership leaves newsrooms in He gained 100 pounds and started grinding his teeth at night. On . How this 'vulture' hedge fund's gutting of local newsrooms could hurt