LONGVIEW — The announcement would have been comical if it didn’t hint at the demise of an essential institution.
Alden Global Capital announced late last month that it offered to buy Lee Enterprises, the nation’s third largest newspaper chain and publisher of The Daily News in Southwest Washington. Alden officials called its effort “a reaffirmation of our substantial commitment to the newspaper industry and our desire to support local newspapers over the long term.”
This is like the Big Bad Wolf telling the first little pig that it wanted to strengthen his straw house.
Alden, a New York-based hedge fund that now owns more than 200 newspapers, has demonstrated no real interest in running quality publications. Its interest in gutting staffs, selling off assets and milking the publications of their remaining vitality has been well documented.
Fortunately, Lee’s board announced Dec. 9 that it unanimously rejected Alden’s $141 million takeover bid. The offer, the board said, “grossly undervalued” the worth and financial potential of the Iowa-based company, which owns around 80 dailies, including The Daily News in Longview.
“We remain confident in our ability to create significant value as an independent company,” Lee Chairman Mary Junck said in a statement announcing the Lee board’s decision.
Alden won’t quit so easily, though. It sued Lee on Wednesday, accusing Lee of denying shareholders a say on the offer.
Just the fact that a hedge fund with no apparent motive beside profit can even make a play for Lee is a tragic statement about the state of an institution so critical to democracy and community well-being.
In my 41 years as a reporter and editor at The Daily News, I often was stunned by how much the newspaper furnished the local community’s grist for debate, discussion, sorrow, outrage, alarm, joy or just plain old scuttlebutt. Readers learned about tax and utility hikes, and official and other malfeasance. They read about their kids’ successes, such as their appearance on the honor roll or victories in a state championship, and their tragedies, such as their deaths in combat or car accidents. In short, The Daily News has been essential for establishing community, informing democracy and keeping public officials honest.
Small to medium-sized newspapers — which comprise the bulk of Lee’s ownership — also are incubators for the next generation of journalists. Many fine reporters got their start at The Daily News. The paper has won hundreds of state, regional and national awards, including the Pulitzer Prize for coverage of the 1980 eruption of Mount St. Helens.
Unfortunately, two decades of Lee ownership has been unkind to the paper, as Lee and newspapers across the board hemorrhaged advertising and readership to the internet. The Daily News’ staff shrank 75% in that time. The lone photo and editing positions remain unfilled. Print subscriptions declined nearly two-thirds, and digital subscriptions have been slow to compensate.
Nevertheless, I shudder to think that The Daily News could fall into the hands of Alden. Alden’s lavishly rich principals, Randall Smith and Heath Freeman, have shown scant commitment to public service journalism, which newspapers need to excel and thrive over the long term.
Alden “will take this proud company, built over decades of hard work, and leave it in ashes. Thousands of us will lose our jobs, and the communities we serve will never recover. Cities with weakened or shuttered newspapers have lower voter turnout, higher taxes, more corruption and increased polarization. Our democracy suffers, and Alden reaps the rewards,” according to a letter sent to the Lee board from unions representing 12 Lee newsrooms.
The union representing TDN’s eight newsroom employees in Longview wrote: “We have worked hard here to turn out robust coverage despite the challenges of the pandemic, understaffing and our lack of a full-time editor. We have worked closely with Lee to bring stability back to this newsroom. Selling to Alden could very well destroy the paper itself, jeopardizing The Daily News’ nearly 100-year legacy.”
The newspaper industry will not be saved through more takeovers by rapacious investors. A quarter of U.S. newspapers have closed in the last 15 years, and financial management companies now own half of the remaining dailies, according to The Financial Times.
The decline in newspaper values made them ripe takeover targets for vulture capitalists with little regard for their intrinsic, civic value, and the importance of preserving robust newsrooms. So newspapers are gobbled up on the cheap, even while many chains, including Lee, remain profitable and are on the cusp of reinventing themselves for the digital era. And Lee has gone a long way to dig itself out of a mountain of debt.
It’s a tragic situation akin to selling the Mona Lisa at a garage sale.
It’s time to draw a line against further takeovers. There are many political and financial means to do so, including legislation, advertising boycotts and simple public pressure.
For now, I’m just glad that the Lee board has done its part to draw that line.