Reporter David Jackson and his colleagues’ campaign to preserve the Chicago Tribune’s legacy of local news excellence isn’t over but it already offers three sobering lessons for free press advocates trying to restore local newspapers to local ownership.
- Public-spirited investors big enough to buy a controlling interest in a company like Tribune Publishing aren’t eager to step in when a hedge fund is circling your publicly traded company. Troubled waters are the happy place of market sharks like Alden Global Capital.
- Newspaper company directors aren’t automatically your allies in an effort to unplug one paper from a newspaper chain and sell it back to the hometown. The whole point of being a chain is to take advantage of scale economies. Reduce scale and you reduce the economies that shareholders love.
- Jeff Bezos’ experience as owner of the Washington Post discourages ultra-rich families who might be inclined to buy a newspaper and operate it as a civic asset. Watchdog journalism by the Washington Post has made Bezos a target of hackers and of the U.S. president.
When you consider the Los Angeles Times’ owner, Patrick Soon-Shiong, is the second-biggest owner of Tribune Publishing shares, Chicago journalists can be forgiven for hoping he’ll bring to Chicago some of the invest-in-journalism ethos he has brought to the LA Times. Jackson said it’s still possible a big investor could step in to block Alden Global, but that hasn’t happened yet.
Jackson said people interested in buying the Chicago Tribune away from its host company ran into delays from the Tribune Publishing board. Then, when billionaire investor Warren Buffet announced in late January he was getting rid of his newspapers, that put a chill on the idea. “The last time I checked in with anybody involved with that, it did not sort of coalesce even to the point of making a formal offer,”Jackson said.
Which left the third approach: creation of a non-profit to buy the paper, similar to what’s being tried at the Salt Lake Tribune. “That effort didn’t get further than conversations and talks which were conveyed to us as being very serious, but ultimately didn’t work their way past any of the boardrooms,” Jackson said. Chicagoans with that kind of money tend to be involved in politics, which makes newspaper ownership tricky.
Daniel Ash at the Chicago Community Trust confirmed via email that talks had taken place, but declined to provide further detail.
Jackson said he’s not giving up.
“In terms of my state of mind — meaning optimism or pessimism — I think I’ve luckily never felt either one in a prevailing way,” Jackson said in a recent phone interview. He’s a Pulitzer Prize-winning investigative reporter who, with colleague Gary Marx, leads the Tribune staff’s efforts to wrest the storied paper away from Alden Global, a hedge fund that appears to be stalking the troubled Tribune Publishing chain.
“The fight Gary and I are trying to make is partly to stave off Alden Global Capital, but it’s also in part to buy this legacy newsroom time so that the next generation of journalists can reinvent or invent a new kind of model,” Jackson said. “We can leave them a newsroom that’s still standing while they invent new ways to reach readers and build audience.”
The clock ticks loudly in Chicago. Tribune Publishing went through the biggest bankruptcy in the history of American media one year after real estate magnate Sam Zell, a tough-talking character right out of a noir novel, bought the company in a heavily leveraged deal that foundered in 2008. That forced layoffs and other cuts in Chicago and at other Tribune papers.
Then last year, Tribune newsrooms learned Alden Global Capital, a hedge fund that specializes in profiting from troubled companies, had become the largest single owner of Tribune Publishing shares. Alden has agreed not to increase its stake before June 30, but analysts like the Poynter Institute’s Rick Edmonds say they expect it to move aggressively when the deadline expires.
Alden Global, through its subsidiary called Media News Group, is infamous for gutting the newsroom of the Denver Post with a 30% all-at-once staff cut, and for wringing dollars out of newsroom budgets in San Jose, Boston and other cities where Alden took control of newspapers.
When Securities Exchange Commission filings in November revealed Alden had accumulated a 32% stake in Tribune Publishing, Jackson and Marx wrote directly to Alden Global managing director Heath Freeman, asking for a meeting to learn what Alden Global’s intentions are.
They wrote to Freeman’s alma mater, Duke University, pressing it to stop accepting Freeman’s donations.
They wrote an Op-Ed column in the hometown paper of Alden Global, the New York Times, criticizing Alden Global’s cost-cutting ways and challenged Alden to publicly commit to sustaining their newsroom, which has won 27 Pulitzer prizes in a city known for corruption and violence.
Joining in the effort to protect the Chicago Tribune from further cuts, Illinois’ U.S. Sens. Dick Durbin and Tammy Duckworth co-signed a letter to Freeman, asking him to be transparent about Alden’s ownership and its intentions for the Chicago Tribune.
“Alden Global Capital must reverse course and put an end to policies that have hollowed out local newspapers and their staff across the country,” the two Democrats wrote. They asked Alden if it will push for additional layoffs. They asked Freeman to provide an example of an Alden Global newspaper investment that did NOT result in mass layoffs or closures and they pressed him to declare what steps Alden Global will take to protect freedom of the press and ensure communities served by Tribune Publishing will continue to be served by “fact-based, timely reporting.”
Finally an answer.
Freeman sent Duckworth and Durbin a letter, marked “Confidential” declaring – without specifics – that Alden Global has endured “extensive inaccurate media coverage.” In the letter, a copy of which was supplied by Sen. Durbin’s staff, Freeman concedes: “Perhaps we should have been more proactive in setting the record straight and correcting coverage in order to have avoided the erroneous ways we are now viewed.”
For starters, Freeman wrote, Alden/Media News Group has never closed a daily newspaper. Rather, he wrote, MNG is the buyer rescuing papers from bankruptcy or liquidation. Listing five small Illinois papers permanently closed by major newspaper chains like Gannett, he said Alden has taken a minority investment in Tribune Publishing to further its goal of supporting local newspapers, “with a focus on ensuring that publications can operate profitably and sustainably.”
Jackson said he was surprised to see Alden Global respond, even to a pair of U.S. Senators, since the firm has declined all interview requests, despite being written about extensively. “Alden writes that it does not control Tribune Publishing and does not make operating decisions about it,” Jackson said. “I simply wonder if that’s true.”
Meanwhile, he continues to follow up suggestions and inquiries from people who want a locally-owned Chicago Tribune.
“There have been some really inspiring and fun and hopeful days and there have been a lot of extremely discouraging days,” Jackson said. With the economy seized up in response to the coronavirus pandemic, the effort is temporarily stalled.
During this campaign, he has learned newspaper people aren’t the only ones who see digital ad companies like Google and Facebook as a major obstacle to the sustainability of local news.
“It does make you wonder why the social media and tech platforms aren’t doing much more to, in a way, get out of the way and allow regional newsrooms to monetize the content they create,” he said. “That’s something that people talk to me about in that high-level world.”
Alden’s pledge of devotion to local news lands in the context of the last 16 years, during which more than 1,800 newspapers have failed. “I personally hope Alden will live up to its statement that it is the buyer rescuing America’s regional newsrooms,” Jackson said.