The Media Today

The vultures come for Tribune, as the Baltimore Sun looks to escape

February 17, 2021

In December, Alden Global Capital, a New York City hedge fund and media investor, confirmed, in a filing with the Securities and Exchange Commission, that it was looking to acquire Tribune Publishing, which owns the Chicago Tribune, the New York Daily News, and the Hartford Courant, as well as other local newspapers in Pennsylvania, Maryland, Virginia, and Florida. Tribune already counted Alden as its largest shareholder; Alden was offering $14.25 per share to take full control of the company. Yesterday, following weeks of wrangling, Tribune announced its intention to sell to Alden at $17.25 per share. The deal as a whole is valued at $630 million, and would take Tribune private.

Alden has become notorious—and widely reviled—for its tactic of ruthlessly slashing costs at its existing media properties; in 2018, staffers at the Denver Post, where management had just moved to cut thirty jobs, assailed their owners as “vultures” in an editorial that resonated across the media industry. “Media observers note that they make cuts almost from day one. Pens and notebooks disappear from newsrooms. One newsroom was missing hot water. Then newspaper buildings are sold, and staff is consolidated and cut,” CJR’s Savannah Jacobson wrote in a profile of Alden last year. “Despite earning higher profits than is typical in the industry, the NewsGuild says that between 2012 and 2019, Alden cut 71 percent of jobs in the hedge fund’s Guild-represented newsrooms.” (In their rare public comments, executives at Alden have insisted that they do care about journalism.) Before sinking its teeth into Tribune, Alden tried to execute a hostile takeover of Gannett, which is America’s biggest newspaper publisher by circulation. (It failed, and Gannett subsequently merged with GateHouse, which was America’s second-biggest publisher by circulation—part of an ongoing industry trend of accumulation and consolidation of which the Alden-Tribune deal is just the latest example.) Ken Doctor, of Nieman Lab, told Jacobson that, in his assessment, Alden is betting that newspapers are dying in America, and that “a lot of money can be made on the way down.”

The Tribune takeover has yet to be finalized. Tribune’s board—nearly half of whose members represent Alden after the two companies formed a pact, last year, that forestalled a hostile takeover—has already approved the deal, but two-thirds of the non-Alden shareholders, who between them own roughly two-thirds of Tribune, must also consent. That, as Poynter’s Rick Edmonds noted recently, gives “absolute veto power” to Patrick Soon-Shiong, the medical doctor and biotech billionaire who bought the Los Angeles Times and San Diego Union-Tribune out of the ownership of Tribune (then known, lest we forget, as tronc) in 2018, and still owns nearly a quarter of Tribune’s shares. Soon-Shiong declined to comment on his intentions to the LA Times’ Meg James yesterday, stating that he wants to review Alden’s offer first. When he took over that paper, he was hailed (with a few reservations) as a savior, of sorts; he now has the opportunity to play that role for the Tribune papers he didn’t salvage by blocking Alden’s bid, though Edmonds’s best guess is “that getting out with a good return on his investment will be Soon-Shiong’s main or sole objective.” (Phil Rosenthal, a columnist at the Chicago Tribune, wondered on Twitter yesterday whether a gift of local delicacies might sway Soon-Shiong’s decision.) The deal also hinges on the acquiescence of Mason Slaine, a former CEO of the business publisher Thomson Financial who owns 8 percent of Tribune. He told the Chicago Tribune’s Robert Channick that he, too, wants to assess Alden’s offer, though he otherwise sounded resigned. “Despite all the talk about saving the papers and community interest, no one stepped up,” he said. “So what happens is that Alden gets it. That’s where we’re at.”

Related: Meet the journalist tracking Digital First Media’s hedge fund owner

Slaine was referring to a push for civic-minded ownership that started in earnest after Alden bought out Michael Ferro, Tribune’s then-largest shareholder, in November 2019; early last year, veteran reporters at the Chicago Tribune literally went from door to door in the city’s wealthy enclaves as they appealed publicly for a local buyer. (They also appealed to Soon-Shiong, with no luck.) Since then, and amid the economic fallout from the pandemic, Tribune has made painful cuts in both staffing and infrastructure. Last year, it permanently shuttered the physical newsrooms of papers including the Daily News and the Orlando Sentinel; last month, it moved the Chicago Tribune out of its downtown offices and into the paper’s printing facility north of the city center. The closures invited a question that Jim Friedlich, CEO of the nonprofit Lenfest Institute, which owns the Philadelphia Inquirer, posed in CJR last month: “If Alden already owns nearly a third of Tribune, could life under new full ownership possibly get worse?” The answer, he concluded, “is yes.”

Staffers across Tribune’s papers agree; yesterday, many of them went on Twitter and shared their pain at the Alden news. Gregory Pratt, who covers municipal politics for the Chicago Tribune, called the deal “absolutely terrible news”; Dawn Rhodes, who used to work at the paper and is now an editor at Block Club Chicago, wrote that “hedge funds, and especially Alden Global Capital, have no business in news media. Their track record speaks for itself.” Daniela Altimari, a reporter at the Hartford Courant, called the news a “gut punch” and said she was “heartbroken”; her colleague Emily Brindley said that Tribune could have found a local buyer for the paper but “chose instead to throw us to the wolves.” The unions representing staffers at the Courant and the Sentinel both said they’d been “dreading” the deal. The guild at the Morning Call, a Tribune paper in Allentown, Pennsylvania, shared a statement from Alden (“Our commitment to ensuring the sustainability of robust local journalism is well established, and this is part of that effort”) with a mocking gif. Jon Schleuss, who leads the NewsGuild-CWA, which represents various Tribune and Alden papers, agreed that the deal “isn’t good for workers, the company, shareholders or the communities.”

Sign up for CJR's daily email

The massive cloud here does have a silver lining (or, if you prefer, a rainbow streaked across it). If the deal goes ahead, Tribune papers in Maryland, including the Baltimore Sun, won’t go to Alden, but will instead be spun off into a new nonprofit controlled by Stewart Bainum Jr., a local hotel executive, philanthropist, and former politician. The nonprofit deal follows a high-profile pressure campaign, called “Save Our Sun,” that was backed by local celebrities including the director John Waters and the screenwriter (and former Sun journalist) David Simon; Bainum’s takeover is not directly tied to the campaign, but has its support. (Ted Venetoulis, a spokesperson for the campaign, told the Sun that Bainum is “just a remarkable person.”) Notably, the Capital Gazette, in Annapolis, would be included in the transition—three years after a gunman invaded its newsroom and murdered five staffers. The newsroom was among those that Tribune shuttered last year; on Labor Day, Gazette staffers tried to enter the building one last time to clear out their desks and hold a farewell rally, only to find that management had locked them out. (Tribune cited coronavirus concerns.) Every local newspaper deserves sustainable, civic-minded oversight. It’s hard to think of a worthier case than the Gazette’s.

Still, the massive cloud is impossible to ignore. Nonprofit ownership is a promising growth area for the media industry—in addition to papers like the Inquirer and the Tampa Bay Times, which have nonprofit owners, the Salt Lake Tribune sought, and was frictionlessly granted, nonprofit status in its own right in 2019—but it hasn’t yet proved scalable. There was speculation, last summer, that the nonprofit Knight Foundation might acquire every paper belonging to McClatchy, another major newspaper chain; in the end, the company went to a hedge fund. As things stand, the same fate seems likely to befall the Sun’s Tribune stablemates. As Nieman Lab’s Joshua Benton put it yesterday, the news about the Sun seems bright, “but allow me to be gloomy that only Baltimore pulled this off, not Chicago, Orlando, Hartford, etc.”

Below, more on local news:

  • Embedded: Tomorrow, NPR will release the first episode in a new four-part series of its show Embedded focused on the fallout from the shooting at the Capital Gazette. According to a preview, Chris Benderev, a producer on the show, spent more than two years following the “trauma and triumphs” of the paper’s staff. “We hear them adapt to their new lives as part of a uniquely American club no one wants to join. We hear them cover the legal proceedings of the man who killed their colleagues. And we hear them face a threat that has nothing to do with guns and everything to do with the demise of local news in America.” You can listen to the trailer here.
  • Consolidation: Sara Fischer, of Axios, reported yesterday that Gannett and McClatchy are teaming up to jointly sell ads across their newspapers. “There aren’t many great options for Fortune 500 companies to buy ads at the local level without having to transact with hundreds of different outlets individually,” Fischer writes. “This partnership aims to address that problem.” Sales staff at USA Today, the national title in Gannett’s portfolio, will take the lead on the effort—a boost for McClatchy, Fischer notes, since it does not own a national newspaper.
  • Covering the storm: Poynter’s Amaris Castillo checked in with journalists who have been covering the massive winter storm that swept across the South this week. “Local newspapers have had to move fast to meet the needs of their readers. Journalists themselves have dealt with power outages,” Castillo writes. “The icy conditions have caused some newspapers to halt home deliveries until conditions improve.” Deliveries of the Houston Chronicle were disrupted yesterday following a power cut; as of last night, the paper was “hopeful” of distributing the Tuesday and Wednesday editions today.
  • A study, I: For CJR and the Tow Center for Digital Journalism, Sara Sheridan spoke with Sarah Stonbely, of the Center for Cooperative Media at Montclair State University, about her new research into local-news provision in New Jersey. “By analyzing New Jersey from the municipal level, Stonbely and her research team were able to create a more nuanced map of where news is coming from in the state, and where it may be overlooked,” Sheridan writes. “They also integrated municipal-level median household income, tax-spending data, and population demographics to better understand who was receiving or else missing out on local news.”
  • A study, II: For Nieman Lab, the communications experts Joshua Darr, Jeremy Padgett, and Johanna Dunaway recapped their recent finding that extremely conservative and extremely liberal lawmakers get more TV airtime than moderates. “Robust local news outlets once held legislators to account by covering whether they delivered for their district,” they write. “But as local news has declined, voters are turning to national media outlets for their political news. There, ideological outliers now set the tone of the debate.”

Other notable stories:

New from CJR: How a Texas TV reporter gained the confidence to cover climate change

Jon Allsop is a freelance journalist whose work has appeared in the New York Review of Books, Foreign Policy, and The Nation, among other outlets. He writes CJR’s newsletter The Media Today. Find him on Twitter @Jon_Allsop.