Alden Global Capital

Last updated

Alden Global Capital
Company type Private
Industry Investment management
Founded2007;17 years ago (2007)
Founder Randall D. Smith
Headquarters
Lipstick Building, New York City, U.S.
Key people
 Heath Freeman
Products Hedge funds
AUM $1.04 billion
Number of employees
15 [1]
Parent Smith Management LLC
Website aldenglobal.com

Alden Global Capital is a hedge fund based in Manhattan, New York City. It was founded in 2007 by Randall D. Smith, [2] and is a division of Smith Management LLC. [3] [4] Its managing director is Heath Freeman. [2] [5] By mid-2020, Alden had stakes in roughly two hundred American newspapers. [6] [7] The company added more newspapers to its portfolio in May 2021 when it purchased Tribune Publishing and became the second-largest newspaper publisher in the United States. [8] [9] [10] [11]

Contents

The company operates its media holdings through Digital First Media (DFM), which it acquired in 2010 after DMG's parent company, MediaNews Group, declared bankruptcy. [12] With its acquisition of Tribune Publishing in late May 2021, Alden is collectively the second-largest owner of newspapers in the United States, as calculated by average daily print circulation, second only to Gannett. [13]

In November 2021, Alden Global Capital made an offer to purchase Lee Enterprises for $24 a share in cash, or about $141 million. [14] Lee owns daily newspapers in 77 markets in 26 states, and about 350 weekly and specialty publications. [15]

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 . [16] [17]

Alden has a reputation for sharply cutting costs by reducing the number of journalists working on its newspapers. [18] [19] In March 2018, Margaret Sullivan, the media columnist for The Washington Post , called Alden "one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism" [20] and Vanity Fair dubbed Alden the "grim reaper of American newspapers." [21]

Alden received critical coverage from the editorial staff at the Denver Post, who described Alden Global Capital as "vulture capitalists" after multiple staff layoffs. [12] [22] [23]

Origins

According to a 2008 filing with the Securities and Exchange Commission, Alden is a division of Smith Management LLC. [3] The company has its origins in R.D. Smith & Company, a firm founded by Randall Duncan Smith, initially using the $20,000 cash prize he and his wife won on the 1968-1970 gameshow Dream House. [24] In 1991, The New York Times described R.D. Smith & Company's business as "profiting from other people's misery by trading the stock and debt of troubled companies." [25]

Acquisitions

MediaNews Group

Under the acquisition plan, MediaNews Group debt fell to $165 million from about $930 million. Senior lenders under the deal were to swap debt for stock. MediaNews Group came out of bankruptcy in March 2010 under the majority ownership of its lenders. [26] The appointees to the MediaNews board were replaced by new directors representing the stockholders group led by Alden Global Capital. Several interim executive positions were also filled by people related to Alden or its parent, Smith Management LLC. [27]

Tribune Publishing

In May 2021, Tribune Publishing finalized its sale to Alden, after having announced in February 2021 that it intended to pursue this path. [9] [10] Alden's purchase price was $635 million, or $17.25 per share. [10] [28] Tribune Publishing published nine major metropolitan dailies. These included the Chicago Tribune , the New York Daily News , and The Baltimore Sun . The Daily News was transferred by Alden into a separate Alden-owned company, Daily News Enterprises, upon the close of the deal. [29] Alden first became involved with Tribune Publishing in 2019, when they paid $117.9 million to Michael Ferro for his 25.2-percent stake. [6]

Alden sold The Baltimore Sun in January 2024 to David D. Smith, executive chairman of Sinclair Inc. The purchase price was not immediately disclosed. [30]

Attempted acquisition of Gannett

In 2019, Alden attempted, but failed at, a hostile takeover of Gannett. [6]

Attempted acquisition of Lee Enterprises

Alden purchased a 5.9-percent stake in Lee Enterprises in January 2020. Lee Enterprises owns 77 daily newspapers, including the Buffalo News , Omaha World-Herald and the Tulsa World . [6] [15]

In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million. [15]

In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. The specific shareholder rights plan adopted by the Lee board forbids Alden from purchasing more than 10% of the company, and will be in force for one year. The rationale offered by the board was, “Consistent with its fiduciary duties, Lee’s Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Alden’s unsolicited proposal to acquire Lee." [31]

In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today." [32] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises. [33] The Alden lawsuit asserts that the members of the Lee board "have every reason to maintain the status quo and their lucrative corporate positions" and that they are "focused more on [their] own power than what's best for the company." [34]

In mid-February 2022, the Delaware court found in favor of Lee Enterprises. In the face of that setback, Alden said it would turn to the tactic of filing a proxy statement asking the company's shareholders to vote no on board members Mary Junck and Herbert Moloney during the March 2022 board elections. [35] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition. [36]

Real estate holdings

Alden Global Capital includes a real estate division called Twenty Lake Holdings, [37] which primarily buys excess real estate from newspapers. [38] In 2019, Twenty Lake Holdings reported that it had acquired about 180 properties with 2.3 million square feet of real estate in 29 states. [39]

In December 2022, Twenty Lake acquired the remaining 33 bus stations owned by Greyhound Lines. The firm subsequently began selling the properties for real estate development after closing the stations. [40] [41]

Pension fund management

The company has been criticized for investing money for pensions of newspaper employees in funds it manages itself. [42]

Impact on newspapers

Alden Global Capital's management of American newspapers has been heavily criticized. In 2018, Margaret Sullivan of The Washington Post described Alden as "seemingly intent on destroying local newspapers." [43] Writing for Bloomberg, Joe Nocera similarly described Alden and its president, Heath Freeman, as "a destroyer of newspapers." [44] In 2020, Joe Pompeo pilloried Alden in Vanity Fair for reducing newsrooms, writing that "Alden Global Capital has eliminated the jobs of scores of reporters and editors, and decimated journalism in cities all over the country: Denver, Boston, San Jose, Trenton, etc. Next up: Chicago, Baltimore, and the New York Daily News." [45]

In October 2021, The Atlantic examined the impact of Alden's acquisition of the Chicago Tribune , noting that, "The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. Instead, they gutted the place." [24]

Related Research Articles

<i>The Baltimore Sun</i> Daily broadsheet newspaper in the US

The Baltimore Sun is the largest general-circulation daily newspaper based in the U.S. state of Maryland and provides coverage of local, regional, national, and international news.

<i>New York Daily News</i> Daily tabloid newspaper based in NJ

The New York Daily News, officially titled the Daily News, is an American newspaper based in Jersey City, New Jersey. It was founded in 1919 by Joseph Medill Patterson in New York City as the Illustrated Daily News.

<i>St. Paul Pioneer Press</i> Newspaper based in St. Paul, Minnesota

The St. Paul Pioneer Press is a newspaper based in Saint Paul, Minnesota, United States. It serves the Minneapolis–Saint Paul metropolitan area. Circulation is heaviest in the east metro, including Ramsey, Dakota, and Washington counties, along with western Wisconsin, eastern Minnesota and Anoka County, Minnesota. The paper's main rival is the Star Tribune, based in neighboring Minneapolis. The Pioneer Press is owned by MediaNews Group, controlled by Alden Global Capital. It no longer includes "St. Paul" as part of its name in either its print or online edition, but its owner still lists the paper's name as the St. Paul Pioneer Press and the paper also calls itself the St. Paul Pioneer Press on its Facebook and Twitter pages. Its URL and digital presence is TwinCities.com.

The Sun Sentinel is the main daily newspaper of Fort Lauderdale, Florida, and Broward County, and covers Miami-Dade and Palm Beach counties and state-wide news, as well. It is the 4th largest-circulation newspaper in Florida. Paul Pham has held the position of general manager since November 2020, and Julie Anderson has held the position of editor-in-chief since February 2018.

<i>The Salt Lake Tribune</i> Daily newspaper in Salt Lake City, Utah

The Salt Lake Tribune is a newspaper published in the city of Salt Lake City, Utah. The Tribune is owned by The Salt Lake Tribune, Inc., a non-profit corporation. The newspaper's motto is "Utah's Independent Voice Since 1871."

<i>The Denver Post</i> American daily newspaper in Colorado

The Denver Post is a daily newspaper and website published in the Denver metropolitan area. As of June 2022, it has an average print circulation of 57,265. In 2016, its website received roughly six million monthly unique visitors generating more than 13 million page views, according to comScore.

The Santa Cruz Sentinel is a daily newspaper published in Santa Cruz, California, covering Santa Cruz County, California, and owned by Media News Group, which is controlled by Alden Global Capital.

<i>Orlando Sentinel</i> Newspaper in Orlando, Florida, US

The Orlando Sentinel is the primary newspaper of Orlando, Florida, and the Central Florida region, in the United States. It was founded in 1876 and is currently owned by Tribune Publishing Company.

William Dean Singleton is an American newspaper executive. He is the founder and executive board chairman of MediaNews Group, the fourth-largest newspaper company in the United States in terms of circulation, with 53 daily papers totaling 2.7 million subscriptions daily and 3 million on Sunday. He is also a former chairman of the board of directors of the Associated Press. He has been publisher of a number of MediaNews' dailies, including the Denver Post, the Salt Lake Tribune, and the Detroit News. He is a cattle rancher, owning several ranches.

<i>The Morning Call</i> American daily newspaper in Allentown, Pennsylvania

The Morning Call is a daily newspaper in Allentown, Pennsylvania. Founded in 1883, it is the second-longest continuously published newspaper in the Lehigh Valley, after The Express-Times. The newspaper is owned by Alden Global Capital, a New York City–based hedge fund.

<i>The Virginian-Pilot</i> Newspaper in Norfolk, Virginia, U.S.

The Virginian-Pilot is the daily newspaper for Hampton Roads, Virginia. Commonly known as The Pilot, it is Virginia's largest daily. It serves the five cities of South Hampton Roads as well as several smaller towns across southeast Virginia and northeast North Carolina. It was a locally owned, family enterprise from its founding in 1865 at the close of the American Civil War until its sale to Tribune Publishing in 2018. Its headquarters is in Newport News, and prior to 2020 was in Norfolk.

<span class="mw-page-title-main">Lee Enterprises</span> American media company

Lee Enterprises, Inc. is a publicly traded American media company. It publishes 77 daily newspapers in 26 states, and more than 350 weekly, classified, and specialty publications. Lee Enterprises was founded in 1890 by Alfred Wilson Lee and is based in Davenport, Iowa.

Tribune Publishing Company is an American newspaper print and online media publishing company. The company, which was acquired by Alden Global Capital in May 2021, has a portfolio that includes the Chicago Tribune, the New York Daily News, the Orlando Sentinel, South Florida's Sun-Sentinel, The Virginian-Pilot, the Hartford Courant, additional titles in Pennsylvania and Virginia, syndication operations, and websites. It also publishes several local newspapers in its metropolitan regions, which are organized in subsidiary groups.

The Sentinel & Enterprise is a morning daily newspaper published in Fitchburg, Massachusetts, with a satellite news bureau in Leominster, Massachusetts. The newspaper covers local news in Fitchburg, Leominster and several nearby towns in northern Worcester County and northwest Middlesex County, Massachusetts. It is owned by MediaNews Group of Colorado., which is owned by the hedge fund Alden Global Capital.

Style Weekly is an online alternative media outlet that was previously an alternative weekly newspaper started in November 1982 for news, arts, culture and opinion in Richmond, Virginia.

Prairie Mountain Media is an American publishing company owned by Digital First Media. It owns a series of newspapers most notably The Denver Post. Digital First Media is owned by Alden Global Capital which has sharply cut costs by reducing the number of journalists working on many of its newspapers.

MNG Enterprises, Inc., doing business as Digital First Media and MediaNews Group, is a Denver, Colorado, United States–based newspaper publisher owned by Alden Global Capital. As of May 2021, it owns over 100 newspapers and 200 assorted other publications.

<span class="mw-page-title-main">Randall D. Smith</span> US hedge fund manager

Randall Duncan "Randy" Smith is an American hedge fund manager, and the founder and chief of investments of Alden Global Capital. Smith is known as a pioneer of vulture capitalism, the purchase and dismantling of distressed firms.

<i>The Colorado Sun</i> Online news outlet based in Denver, Colorado, US

The Colorado Sun is an online news outlet based in Denver, Colorado. It launched on September 10, 2018, to provide long-form, in-depth coverage of news from all around Colorado. It was started with two years of funding from blockchain venture capitalists at Civil and from a Kickstarter campaign. The operation is now funded by reader support, through memberships, and from sponsorship and grant revenue. The Sun is an associate member of the Associated Press.

Heath Freeman is the managing director of Alden Global Capital, the owner of Digital First Media, and runs its daily operations. Freeman is said to be publicity-shy but has attracted national interest because of his role at Alden which as of May 2021 owns the second-largest portfolio of American newspapers, second only to Gannett. He has been described as "aggressive and highly intelligent," and “flinty-eyed and focused."

References

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  2. 1 2 "Company Overview of Alden Global Capital LLC". Bloomberg News . Archived from the original on June 26, 2016. Retrieved April 12, 2018.
  3. 1 2 Walker, Randy (November 2, 2022). "A hedge fund-linked company bought a mobile home park. Many residents were told to pay hundreds more or be evicted". Cardinal News. Archived from the original on November 2, 2022. Retrieved April 27, 2024.
  4. ↑ Reynolds, Julie (May 9, 2023). "The vulture fund that picked American newspapers apart has a new target". Columbia Journalism Review . Archived from the original on June 8, 2023. Retrieved April 27, 2024.
  5. ↑ Ellison, Sarah, "Heath Freeman of Alden Global Capital says he wants to save local news. Somehow, no one's buying it.", The Washington Post, June 11, 2020. Retrieved 2020-06-16.
  6. 1 2 3 4 Jacobson, Savannah (June 29, 2020). "The most feared owner in American journalism looks set to take some of its greatest assets". Columbia Journalism Review. Retrieved February 20, 2021.
  7. ↑ Nicholson, Kieran (March 8, 2018). "Minority shareholder sues Denver Post parent and NY hedge fund over 'breaches of fiduciary duty'". The Denver Post. Retrieved April 12, 2018.
  8. ↑ Yoksoulian, Lois (June 2, 2021). "What does the Chicago Tribune sale mean for the future of newsrooms?". Illinois News Bureau. Retrieved June 2, 2021.
  9. 1 2 Folkenflik, David (May 21, 2021). "'Vulture' Fund Alden Global, Known For Slashing Newsrooms, Buys Tribune Papers". NPR. Retrieved May 21, 2021.
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  12. 1 2 Ember, Sydney (April 7, 2018). "Denver Post Rebels Against Its Hedge-Fund Ownership". The New York Times. ISSN   0362-4331 . Retrieved May 2, 2018.
  13. ↑ Alpert, Lukas (May 21, 2021). "Tribune Says Sale to Alden Wins Approval Amid Confusion Over Key Shareholder's Vote". Wall Street Journal. Retrieved May 22, 2021.
  14. ↑ Kellahar, Colin (November 22, 2021). "Lee Enterprises Shares Jump on Takeover Offer From Alden". MarketWatch. Retrieved November 22, 2021.
  15. 1 2 3 Benton, Joshua (November 22, 2021). "The vulture is hungry again: Alden Global Capital wants to buy a few hundred more newspapers". Nieman Lab. Retrieved November 22, 2021.
  16. ↑ Ember, Sydney (April 12, 2018). "Colorado Group Pushes to Buy Embattled Denver Post From New York Hedge Fund". The New York Times. Retrieved April 12, 2018.
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  20. ↑ Sullivan, Margaret (March 15, 2018). "Is this strip-mining or journalism? 'Sobs, gasps, expletives' over latest Denver Post layoffs". The Washington Post. Retrieved June 5, 2019.
  21. ↑ Pompeo, Joe (February 5, 2020). "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat". Vanity Fair Blogs.
  22. ↑ Sanchez, Robert. "How Massive Cuts Have Remade The Denver Post", 5280 (magazine), September 2016. Accessed February 13, 2020.
  23. ↑ Doctor, Ken. "Newsonomics: By selling to America’s worst newspaper owners, Michael Ferro ushers the vultures into Tribune", November 2019, Nieman Lab. Accessed February 13, 2020.
  24. 1 2 Coppins, McKay (October 14, 2021). "A Secretive Hedge Fund Is Gutting Newsrooms". The Atlantic. Archived from the original on October 14, 2021. Retrieved October 14, 2021.
  25. ↑ Cowan, Alison Leigh (March 29, 1991). "Bottom Fishing With R.D. Smith". The New York Times . ISSN   0362-4331. Archived from the original on April 22, 2024. Retrieved April 27, 2024.
  26. ↑ McCarty, Dawn; Bensinger, Greg (January 22, 2010). "Affiliated Media Files for Bankruptcy to Restructure (Update2)". Business Week. Bloomberg. Archived from the original on June 28, 2011. Retrieved February 22, 2011.
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  28. ↑ "Alden Global Capital to buy Tribune in deal valued at $630 million".
  29. ↑ "Form 8-K". EDGAR . U.S. Securities and Exchange Commission. May 25, 2021. Retrieved October 30, 2024– via Tribune Publishing.
  30. ↑ Mirabella, Lorraine (January 15, 2024). "The Baltimore Sun purchased by Sinclair's David D. Smith". Baltimore Sun. Retrieved January 16, 2024.
  31. ↑ Mullin, Benjamin (November 24, 2021). "Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover". Wall Street Journal. Retrieved November 25, 2021.
  32. ↑ Bruell, Alexandra (December 9, 2021). "Lee Enterprises Board Rejects Alden's Acquisition Offer". Wall Street Journal. Retrieved December 11, 2021.
  33. ↑ Turner, Jonathan (December 21, 2021). "Alden Global Capital takes Lee Enterprises to court over failed board nominations". QuadCities.com. Retrieved December 28, 2021.
  34. ↑ Fischer, Sara (December 15, 2021). "Alden Global Capital sues Lee Enterprises after rejected takeover bid". Axios, republished on Yahoo News. Retrieved December 15, 2021.
  35. ↑ Edmonds, Rick (February 15, 2022). "Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board". Poynter.org. Retrieved February 20, 2022.
  36. ↑ Hayden, Sarah (March 10, 2022). "Lee Enterprises shareholders reelect three directors amid hedge fund fight". Quad-City Times. Retrieved May 20, 2022.
  37. ↑ "Twenty Lake Holdings, LLC Company Number 5300776". opencorporates.com. Retrieved November 23, 2023.
  38. ↑ Cridlin, Jay (August 31, 2021). "Tampa Bay Times sells printing plant to developer for $21 million". Tampa Bay Times. Retrieved September 25, 2021.
  39. ↑ O'Connell, Jonathan (February 11, 2019). "A hedge fund's 'mercenary' strategy: Buy newspapers, slash jobs, sell the buildings". The Washington Post. Retrieved September 25, 2021.
  40. ↑ Struett, David (June 26, 2023). "How could potential sale of Greyhound station in downtown Chicago affect bus riders at regional hub?". Chicago Sun-Times . Retrieved November 24, 2023.
  41. ↑ Allard, Sam (November 18, 2023). "Greyhound stations are leaving downtowns after sale to notorious investment firm". Axios . Retrieved November 24, 2023.
  42. ↑ O'Connell, Jonathan (April 17, 2019). "The hedge fund trying to buy Gannett faces federal probe after investing newspaper workers' pensions in its own funds". The Washington Post. Archived from the original on May 17, 2019. Retrieved June 26, 2019.
  43. ↑ Sullivan, Margaret (March 15, 2018). "Is this strip-mining or journalism? 'Sobs, gasps, expletives' over latest Denver Post layoffs". The Washington Post . ISSN   0190-8286. Archived from the original on March 15, 2018. Retrieved April 27, 2024.
  44. ↑ Nocera, Joe (March 26, 2018). "Imagine If Gordon Gekko Bought News Empires". Bloomberg News . Archived from the original on March 27, 2018. Retrieved April 27, 2024.
  45. ↑ Pompeo, Joe (February 5, 2020). "The Hedge Fund Vampire That Bleeds Newspapers Dry Now Has the Chicago Tribune by the Throat". Vanity Fair Blogs. Archived from the original on February 6, 2020. Retrieved October 14, 2021.
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