In the latest sign of the finance industry’s tightening grip on the local news business, Alden Global Capital has moved a significant step closer toward acquiring a major prize: Tribune Publishing, the parent of nine major metropolitan papers including The Chicago Tribune, The New York Daily News and The Baltimore Sun.
Alden, a hedge fund that has already amassed a media empire of roughly 200 newspapers nationwide, made its first big move on Tribune Publishing in 2019, when it took a 32% stake, making it the publisher’s largest shareholder. It increased its influence in July, when it placed its founder, Randall D. Smith, on the Tribune board.
Now Alden’s endgame is coming into sharper focus. In a Dec. 14 letter to the Tribune board that became public in a federal regulatory filing Thursday, Alden proposed buying the Tribune shares it did not already own for $14.25 apiece. That would be 11% more than the Wednesday closing price for Tribune, a publicly traded company. The offer, first reported by The Wall Street Journal, values Tribune at about $520.6 million.
Alden controls its network of newspapers through its MediaNews Group subsidiary. The proposed acquisition of Tribune Publishing would create an even more formidable rival to the largest U.S. newspaper chain, Gannett.
The letter to the Tribune board was signed by Smith, a onetime Bear Stearns partner who runs Alden with its president, Heath Freeman. When Smith gained his Tribune board seat, after weeks of negotiations, he became the third executive from Alden or affiliated companies to join the Tribune board, which grew to seven seats, from six.
Tribune did not immediately respond to a request for comment.
Many Tribune Publishing reporters have denounced Alden’s growing presence, citing its practice of slashing newsroom costs. Alden’s latest proposal may further alarm some journalists and press advocates who have decried the influx of financial firms into the news business, arguing that they make imperfect stewards of watchdogs of government and commerce. Among those who sought potential patrons to keep Tribune papers out of Alden’s control were two Chicago Tribune investigative reporters.
Alden’s most dramatic run-in with journalists came in 2018, when the staff of The Denver Post openly rebelled, publishing a special opinion section devoted to blasting its hedge fund ownership, which had made drastic cuts at the paper.
“If Alden isn’t willing to do good journalism here, it should sell The Post to owners who will,” the paper’s editorial board wrote.
Tribune was already in trouble before Alden came along. For many years the company billed itself under a name meant to suggest its embrace of digital media — Tronc — and its executives tangled with newsroom employees at The Los Angeles Times in a series of spats that did not end until 2018, when Tribune sold that paper to Dr. Patrick Soon-Shiong, a medical entrepreneur, and his wife, Michele B. Chan. That same year, Tribune cut the staff of The Daily News, once the nation’s largest-circulation newspaper, in half.
Since Alden acquired its majority stake in Tribune, hard times have continued. The company has offered buyouts to employees and closed newsrooms while trying to stave off the effects of the coronavirus pandemic on an already distressed industry.
In August, when most newspaper employees had been working remotely for months, Tribune announced that it was permanently closing the physical newsroom of The Daily News. That announcement was quickly followed by the company’s shuttering of the newsrooms of The Morning Call in Allentown, Pennsylvania; The Orlando Sentinel; The Carroll County Times in Westminster, Maryland; and The Capital Gazette in Annapolis, Maryland. In December, the newsroom at another Tribune daily, The Hartford Courant, which has been in operation since 1764, went dark.
In the proposal letter to the Tribune board, Smith of Alden said that his company had engaged in conversations with Stewart Bainum Jr., a business executive and onetime politician in Maryland, to gauge his “interest in respect of certain assets of Tribune.” Tribune’s Maryland publications include The Sun, The Capital Gazette and The Carroll County Times of Westminster.
Mason Slaine, a former chief executive of Thomson Financial who owns roughly 7% of Tribune’s shares, has publicly suggested that Tribune try to sell individual newspapers to interested buyers. Slaine, who has a home in Boca Raton, Florida, has expressed interest in buying a Tribune paper, The Sun Sentinel of South Florida.
Revenue for the local news industry has plummeted over the past 15 years as readers have increasingly favored getting the news on screens rather than in print newspapers. Alden and other hedge funds have nonetheless been able to wring profits from newspaper chains through austere management practices, and the finance industry has driven a wave of consolidation in the news media business.
In 2019, Gannett, the publisher of USA Today, was acquired by New Media Investment Group, the parent company of GateHouse Media, to create a behemoth (called Gannett) that publishes approximately 1 in 5 of the country’s daily newspapers. The supersized version of Gannett was created thanks to nearly $2 billion in financing from Apollo Global Management, a private equity firm.
In 2020, the last of the major family-owned chains, McClatchy, emerged from bankruptcy as the property of Chatham Asset Management, a New Jersey hedge fund. Chatham also owns a majority stake in Postmedia, one of Canada’s largest newspaper publishers. Since it took over the Canadian media company, 1,600 of its employees have been laid off, and more than 30 publications have been shut down.