Defenders of local newspapers expressed grave concern Thursday after Alden Global Capital—a hedge fund once dubbed "the face of bloodless strip-mining of American newspapers and their communities"—signaled it wants to have full ownership of Tribune Publishing.
"It's hard to imagine how this wouldn't be an apocalypse for local news," tweeted Wired editor Megan Greenwell.
It's not just declining ad dollars and subscriptions hurting newspapers. It's companies like Alden Global Capital who buy newspapers to raid their real estates and slash jobs to enrich themselves https://t.co/3YZ4D4qh6b https://t.co/Dy8XQLtGPA— Fenit Nirappil (@FenitN) December 31, 2020
News of the $520 million offer was first reported by the Wall Street Journal.
Chicago-based Tribune owns nine major newspapers including The Baltimore Sun, New York Daily News, and Chicago Tribune. Alden is already Tribune's largest shareholder, currently holding 31.6% of shares having acquired additional stakes in November—much to the outrage of newspaper unions.
Alden has "a media empire of roughly 200 newspapers nationwide," the New York Times noted, and is known, along with other hedge funds, for "wring[ing] profits from newspaper chains through austere management practices" including massive layoffs when taking over media entities.
The Save Maryland Newspapers website, an effort of the NewsGuild-CWA, is less muted in its criticism, describing Alden as "an unscrupulous hedge fund aimed at lining the pockets of a handful of investors at the expense of news, accountability, and the people of our community."
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Heath Freeman cuts 75% of the workers at unionized newspapers, takes the real estate, destroys most of the journalism and creates the highest profits in the industry for himself and his buddies https://t.co/hUrJUjAQAM— Hedge Clippers (@GoHedgeClippers) September 11, 2020
According to the Tribune:
Alden... made a nonbinding proposal on Dec. 14 to buy out other shareholders for $14.25 per share, according to a filing Thursday with the Securities and Exchange Commission. [...]
Launched in 2007, the hedge fund turned its focus to newspapers during the Great Recession, buying stakes in companies that had declared bankruptcy such as MediaNews, Philadelphia Media Network, and Journal Register.
"In June," CNN further noted, "Alden acquired a third seat on Tribune Publishing's board in exchange for a standstill agreement with the newspaper chain. The agreement prevents Alden from increasing its stake for the company until June 2021."
Alden's bid, the Tribune added, requires approval from the two-thirds of Tribune Publishing's shareholders, and that's something the Chicago Tribune Guild is hoping doesn't come.
"If you're a shareholder and you have any concern for the future of this institution or the common good," the union tweeted, "please don't sell to Alden Global Capital."