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Largely lost in the extraordinary national news of the new year is a Securities and Exchange Commission filing that could have an outsize impact on local news.
On New Year’s Eve, Alden Global Capital reported in the filing that it had offered to purchase full control of Tribune Publishing, home to several storied local newspapers, including the Chicago Tribune, the New York Daily News, the Baltimore Sun, the Hartford Courant, and others.
Whether the decline of this once-towering American newspaper chain accelerates rapidly or is meaningfully reversed will be determined in the next few weeks. Tribune has engaged Lazard, the investment banking firm, to advise a special committee of the board on Alden’s offer to increase its holding beyond the current 32 percent. A response by the company to Alden’s offer could come this week.
Different buyers hold different places in the media food chain. Alden is the deepest and most aggressive cost-cutter in the American news industry. The company hollowed out what had been some of America’s greatest local news organizations, including the San Jose Mercury News and the Denver Post, both of which are now news organizations on life support.
An Alden purchase of all of Tribune doesn’t have to be a fait accompli. In fact, the threat of such a deal represents an opportunity for civic-minded local investors across the country, who could use this case not only to save a critical local news institution, but to reinvent it.
Tribune Publishing, to use its latest name, has long been in decline, from its overleveraged purchase in 2007 by real estate investor Sam Zell and subsequent bankruptcy to its mercifully brief 2017 rebranding as Tronc. (For a taste of Zell’s stewardship of the company, reread this blistering profile from the late New York Times media critic David Carr.)
In late 2019, after Alden purchased its initial interest in Tribune, the company went through a round of buyouts, including a reduction of thirty-three news employees at the Chicago Tribune and a 25 percent news staff reduction at the Morning Call in Allentown, Pennsylvania, according to NewsGuild officials in each city. Perhaps most egregiously, Tribune announced last summer its plans “to permanently vacate” most of its editorial office space at its newspapers in New York, Hartford, and elsewhere, abandoning the practice of having newspeople work in newsrooms. The Chicago Tribune announced this week that it is giving up its downtown office space and moving employees to its printing facility.
If Alden already owns nearly a third of Tribune, could life under new full ownership possibly get worse? The answer is yes. Alden began acquiring distressed news properties as a debt holder. The strategy is unabashedly to run newspapers for cash, treating them as bonds or financial oil wells, until they run dry. At the moment Alden lacks either board or direct management control. The acquisition of the rest of Tribune would give Alden free rein to maximize near-term cash returns by pursuing its cost-reduction playbook.
Several communities that are home to Alden or Tribune newspapers have tried to fight back. In Denver, following a sharp reduction in newsroom staff, the Post’s editorial page called for Alden to sell the paper to local interests while it still provided journalistic value to its community: “As vultures circle, The Denver Post must be saved.” Local buyers were unable to offer enough money to interest Alden. A group now called the Colorado Media Project has opted instead to support Colorado public media and other budding nonprofit newsrooms.
In Baltimore, a community group called “Save Our Sun” has attempted to raise both sufficient capital and community uproar to acquire the Sun from Tribune. The group—which includes local foundations, public officials, and NewsGuild executives, with support from local celebrities including director John Waters, TV writer and former Sun police reporter David Simon, and baseball Hall of Famer Cal Ripken Jr.—is sincere, serious-minded, and colorful, but has so far been unable to engage Alden or Tribune.
The harsh reality is that no such consortium has proved successful in the past. A civic-minded local investor might prove a much better bet.
Where local interests have successfully retaken control of major regional news properties from newspaper-group or hedge-fund owners, it has invariably been a single, moneyed individual offering an aggressive price and certainty of closing the deal, rather than a community group passing the hat. These buyers have two things in common: big hearts and big wallets.
I am the chief executive of one such project. In 2014, a local investment group led by media entrepreneurs Lewis Katz and H.F. “Gerry” Lenfest purchased the Philadelphia Inquirer from Alden and its coinvestor Angelo Gordon & Co., also a distressed-debt investor and once a major shareholder in the Tribune Company. Lenfest later purchased full control from Katz’s estate, then, two years later, donated the Inquirer and modest endowment capital to a nonprofit organization, the Lenfest Institute for Journalism, which I lead.
I am neither unbiased about the financial-buyer approach to newspapers nor unemotional about saving local journalism, but that is exactly the point. The Lenfest experience in Philadelphia is an experiment not only in the repurchasing of a cherished hometown news enterprise by local interests but also in creating a test lab for nonprofit, community-centered ownership.
With Lenfest grant support as well as substantial local community donations, the Inquirer has been able to maintain a newsroom of over two hundred reporters and editors; has doubled the size of its investigative news team; and has launched a high-impact statewide sister news organization called Spotlight PA, now serving fifty other Pennsylvania news enterprises.
Elsewhere, local buyers have shown that they can be committed investors in quality local journalism. John Henry spent $70 million to buy the Boston Globe from the New York Times Company in 2013, and Glen Taylor paid $100 million to bring the Minneapolis Star Tribune out of bankruptcy in 2014. Perhaps the most high-profile recent example is Dr. Patrick Soon-Shiong’s 2018 purchase of the Los Angeles Times and San Diego Union-Tribune from Tribune for half a billion dollars. Each of these buyers went on to invest in both the news and digital transformation necessary to ensure the longer-term impact of their newsrooms.
In Baltimore, a new buyer may well emerge as an alternative to Alden. The Alden/Tribune filing discloses Tribune board discussions and direct Alden conversations with Stewart Bainum, chair of Choice Hotels. I met Bainum in the course of his exploration of possible newspaper ownership. He is a lifelong Maryland resident, has served in the Maryland General Assembly and on the boards of trustees at Johns Hopkins University and the University of Maryland Medical Center, and has been committed to several other local philanthropies. While Bainum’s principal interest is the Baltimore Sun, he appears to have the wherewithal to acquire Tribune as a whole should he choose to do so.
Let’s hope that the presence of a willing buyer for one major Tribune property engenders other serious interest from local buyers as the process moves forward. Local news doesn’t need another hedge-fund loss.
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