Tag: Alden Global Capital

Boston 25 is shrinking. You won’t be surprised to learn that private equity is to blame.

I knew that the news staff at Boston 25 was getting squeezed, but I didn’t realize how deeply until I read Aidan Ryan’s report in The Boston Globe (I’m briefly quoted). Ryan writes:

… at least 13 staffers, including reporters, producers, salespeople, and a news director, who have left the station since the start of the year, according to interviews and workers’ LinkedIn profiles. Those exits at WFXT-TV (Channel 25) came on top of a steady trickle of departures stretching back years.

Eight current and former employees who spoke to the Globe cited a confluence of factors driving people out, including issues with the quality of the station’s content, overwhelming workloads, pay cuts, layoffs, and uncertainty over whether its private equity owners will keep the lights on. Most spoke on condition of anonymity because of fears of retribution.

You will not be surprised to learn that many of these cuts coincide with the station’s 2019 acquisition by a private equity firm, Apollo Global Management. Private equity has destroyed much of the journalistic landscape, especially local newspapers. Unlike newspapers, though, local television news is still a fairly lucrative business, as well as where a large proportion of Americans get their news, according to the Pew Research Center. If you look at this chart, you’ll see that advertising revenues have held fairly steady, with increases in digital offsetting some of the decline in over-the-air ads.

Private equity firms and hedge funds, though, care about only one thing: how much profit they can wring out before walking away and letting the next owner clean up the mess. In fact, Ryan reports that Apollo tried to sell Boston 25 to another hedge fund in 2022, but that deal fell through.

Boston 25 — formally WFXT-TV (Channel 25) — has a long history tied up in the convoluted tale of Rupert Murdoch’s one-time ownership of the Boston Herald. As I wrote for GBH News back in 2014, Hearst’s Herald American was on the verge of collapse in 1982 when Murdoch swooped in, rescued the tabloid and infused it with new energy. Murdoch added it to his Boston holdings in the late 1980s, acquiring Channel 25 and seeking a waiver from the FCC so that he could continue to own both.

One day as that story was unfolding, then-Sen. Ted Kennedy was making a campaign swing through suburban Burlington. As a reporter for the local daily, I was following him from stop to stop. Kennedy had just snuck an amendment into a bill to deny Murdoch the regulatory waiver he was seeking that would allow him to own both the Herald and Channel 25 (the amendment prohibited a similar arrangement in New York). At every stop, Herald reporter Wayne Woodlief would ask him, “Senator, why are you trying to kill the Herald?”

The episode also led Kennedy’s most caustic critic at the Herald, columnist Howie Carr, to write a particularly memorable lead: “Was it something I said, Fat Boy?” Years later, Carr remained bitter, telling me, “Ted was trying to kill the paper in order to deliver the monopoly to his friends” at The Boston Globe.

As a result of Ted Kennedy’s amendment, Murdoch sold the Herald to his longtime protégé Pat Purcell, who operated it until 2018, when the paper declared bankruptcy and was delivered unto the hands of Alden. Murdoch, meanwhile, continued to operate Fox 25.

In those days Fox 25 was a well-staffed operation with a real Boston flavor, running a satellite bureau across the street from the Statehouse and featuring segments such as “The Heavy Hitters” — commentary by local media guys Peter Kadzis, Cosmo Macero and Doug Goudie. Among the station’s journalists were anchor Maria Stephanos and investigative reporter Mike Beaudet, both of whom are now at WCVB-TV (Channel 5). Mike is also a colleague at Northeastern University. And no, despite Murdoch’s involvement, the station bore no resemblance to the Fox News Channel.

The station was acquired by Cox Media Group in 2014, and the station slowly became less distinctive and more generic. “The Heavy Hitters” was eliminated, as was the Beacon Hill bureau. Cutting began and then accelerated after Cox sold itself to Apollo in 2019. That said, I still like what I see whenever I tune in the Boston 25 newscast, and I hope there’s a way forward. Anchor-reporter Kerry Kavanaugh has been generous in helping us with several mayoral debates in Medford.

Boston is fortunate to still have a number of local TV newscasts, and some of them are quite good. Still, the fading away of Boston 25 is sad as well as a loss for both the community and the people who work there — and for those who are no longer at the station.

Correction: Updated to note that Doug Goudie was one of “The Heavy Hitters.” I had the wrong Doug.

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The Boston Herald’s hedge fund owner cuts three jobs

The Boston Herald composing room. Photo from sometime between 1859 and 1885.

It has been a while since we’ve heard about cutbacks at Alden Global Capital’s Massachusetts properties. But Boston Globe media reporter Aidan Ryan writes that the hedge fund is once again on the move, as the Boston Herald has cut three employees from its small staff.

Those reportedly losing their jobs: a full-time sports reporter, a part-time photographer and, on the business side, a part-time account executive. Boston Newspaper Guild president Scott Steeves tells Ryan, “It’s unfortunate because it seems like both the online version and the print version have done well as of late.”

No current headcount, but Ryan observes that the Herald’s newsroom was down to 24 in 2020. Just a few years earlier, the Herald employed 240 people, but it’s not clear whether that’s an apples-to-apples comparison. The Herald also lacks a newsroom.

I’d be curious to know whether Alden’s other Massachusetts properties, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg, have been affected — and if Alden papers across the country are being cut yet again. If you have a tip, just use the “Contact” form.

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The Mendo Voice goes nonprofit as co-founder Kate Maxwell moves on

Kate Maxwell working out of borrowed space in March 2020. Photo (cc) 2020 by Dan Kennedy.

There’s big news in the world of hyperlocal journalism this week: Kate Maxwell, the co-founder and publisher of The Mendocino Voice in Northern California, is moving on. The Voice, which is nominally a for-profit, is becoming part of the nonprofit Bay City News Foundation, which, according to an announcement on Tuesday, “will allow both organizations to expand the geographic reach and depth of their public service reporting.”

In a message to readers, Maxwell writes that “as part of this new chapter, I’ve chosen to move on from my role as publisher.” No word as to what she’ll do next. She adds:

Thanks to your support, we’ve published nearly 5,000 articles, reached millions of readers, created living wage jobs for experienced local reporters, held government officials accountable, received national funding and awards, and shared important Mendocino stories with readers around the state and country. Most importantly, we’ve been able to provide the diverse communities in Mendocino with news that’s been useful to you, our friends and neighbors.

Although the Voice will continue as a standalone free website, it will do so without either of the co-founders. The site’s first editor, Adrian Fernandez Baumann, left several years ago. Here’s part of an FAQ explaining what the change will mean for readers:

This partnership will give The Mendocino Voice the stability to maintain its news operation and support its journalists. It’ll create a regional network all along the coast as well as the inland areas and give reporters the opportunity to grow. It’s a promise of long-term sustainability. Joining with Bay City News Foundation means that we’ll have the capacity for deeper coverage of environmental issues, plus more resources for bringing you that news, including more photographers, data journalists and round-the-clock editors.

The Mendo Voice was the first project I visited in my reporting for “What Works in Community News.” I was on the ground during the first week of March in 2020, and we all know what happened that week. I covered an event the Voice hosted at a local brewpub on Super Tuesday, which I reported on for GBH News. Two days later, I was on hand as Maxwell and Baumann reported on a news conference to announce the first measures being taken in response to what was then called the “novel coronavirus.” The nationwide shutdown loomed.

The reason I wanted to include The Mendo Voice in the book that Ellen Clegg and I were writing was that Maxwell and Baumann were planning to convert the project they had founded in 2016 to a cooperative form of ownership. “We are going to be owned by our readers and our staff,” Maxwell told the Super Tuesday gathering. “We think that’s the best way to be sustainable and locally owned.”

After years of following a nascent news co-op in Haverhill, Massachusetts, which ultimately failed to launch, I was intrigued. Unfortunately, the co-op that Maxwell and Baumann envisioned did not come to pass, either. COVID-19 wreaked havoc with their plans, though the Voice continued to publish and provide “useful news for all of Mendocino.”  Baumann took a personal leave that ended up becoming permanent. And Maxwell was unable to move ahead with the community meetings she had envisioned to make the co-op a reality. “I think we basically had a year’s worth of events that we were planning,” she told me in 2022.

By then, the Voice was essentially operating as a hybrid — a for-profit that had a relationship with a nonprofit organization that allowed for tax-deductible donations to support the Voice’s reporting. Eventually, she said, the site was likely to move toward a more traditional nonprofit model.

The co-op idea is an interesting one, but to this day I’m not aware of a successful example at the local level. The Defector has made it work, but that’s a national project. In Akron, Ohio, The Devil Strip, an arts-focused magazine and website, tried for a while but then collapsed in an ugly fashion.

Maxwell and Baumann, two young journalists who launched The Mendocino Voice after leaving jobs at Mendo County newspapers being destroyed by the hedge fund Alden Global Capital, built something of lasting value. Best wishes to both of them.

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How Anne Eisenmenger built a group of free, for-profit weekly newspapers

Anne Eisenmenger with two of her friends, Duff and Sunny. Photo by Pat Lester.

On the latest “What Works” podcast, Ellen Clegg and I talk with Anne Eisenmenger, who is president of Beaver Dam Partners and publisher of several weekly newspapers in southeast Massachusetts, including Wareham Week and Sippican Week. Anne has a laser focus on developing and operating hyperlocal for-profit newspapers.

Anne lives in Wareham, and she founded her community news company there in 2010 with the launch of Wareham Week. And, yes, it’s an actual print newspaper, with a for-profit business model based on free distribution at high-traffic locations, and it’s packed with ads.

In our Quick Takes, I dive into one of the best newspaper stories in the country, which is right here in our backyard, or at least in the western sector of our backyard. It involves The Berkshire Eagle, a daily based in Pittsfield, Massachusetts, once regarded as one of the best small papers in the country. Then it fell into the hands of Alden Global Capital, so we all know what happened next. This story, though, has a happy ending, at least so far.

Ellen talked recently with Paul Hammel, a reporter doing a story on the loss of small-town newspapers across Nebraska. He focused on a couple who sold their paper, in a town of 1,000, but had to come back after retirement when the new owner quit in the middle of the night.

You can listen to our conversation here and subscribe through your favorite podcast app.

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Look out, Oregon: Ken Doctor is planning a new media outlet to challenge Gannett

Eugene, Oregon. Photo (cc) 2012 by Visitor7.

The pixels were barely dry on my post about the Pulitzer Prize awarded to Lookout Santa Cruz when I learned about plans by founder Ken Doctor to launch a second Lookout Local site in Oregon’s Eugene area. The Oregonian reported last month that Lookout Eugene-Springfield will launch in late 2024 or early 2025 with a newsroom of 20, of whom 15 will be journalists. That’s more firepower than Gannett’s Eugene Register-Guard can muster. Indeed, The Oregonian published a pretty depressing report on that paper a year ago that began:

The Eugene Register-Guard, once one of the best newspapers in the region, today has no local editor, no publisher, no physical newsroom and little love from a dismayed citizenry. The news staff that once exceeded 80 now stands at six.

As was the case in Santa Cruz, California, Doctor’s reputation in the news business is standing him in good stead. He said he has already raised $2.5 million for his Oregon project and plans to scrounge up another $1.5 million. Doctor is a graduate of the University of Oregon’s journalism school, so this is something of a homecoming for him.

Doctor also has a long post up at Nieman Lab about efforts in California to bolster local news. Like longtime media analyst Jeff Jarvis, Doctor opposes efforts to extract money from Google and Facebook, noting that Meta, Facebook’s parent company, has made it clear that it doesn’t need news, and that going after Google would harm the uneasy balance between the good and bad that the company has done for (and to) journalism.

Instead, Doctor is looking to New York State, which recently created tax credits for news publishers who create and retain jobs. The key, he writes, is to ensure that those credits go to California-based publishers rather than to out-of-state conglomerates. And though he doesn’t name names, he’s presumably referring to the hedge fund Alden Global Capital, with whom he competes in Santa Cruz, and Gannett.

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The Berkshire Eagle celebrates eight years of local ownership

“Pittsfield in the near Future.” Photo of 1906 postcard (cc) 2010 by Steve Shook.

The Berkshire Eagle of Pittsfield, Massachusetts, is celebrating its eighth anniversary as a locally owned independent newspaper. In 2016, a group of business people and community leaders rescued the Eagle from the hedge fund Alden Global Capital and began restoring it. There was a time in the not-too-distant past when the Eagle was regarded as one of the best small dailies in the country. I can’t say for sure how it stacks up these days, but given the dismal state of the news business overall it may very well deserve that appellation once again.

Publisher Fredric Rutberg writes:

Today, more people read The Eagle than in 2016. Indeed, paid subscriptions are up by more than 20 percent in that time period and paid circulation is up 5 percent. I use the term “paid” for several reasons: We have to sell our publications to survive and increased sales is a powerful vote of confidence in the quality of our publications, while having more readers affirms the value of advertising which remains our primary source of revenue.

Like a number of other for-profit newsrooms, ranging from The Provincetown Independent to Iowa’s Storm Lake Times-Pilot, the Eagle now works with a nonprofit arm — in this case the Local Journalism Fund — which can receive tax-deductible contributions to support certain types of public interest journalism. For the Eagle, that means more coverage of education, health, economic development and the arts. Read more about how the Eagle makes it work.

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New York local news tax credit would benefit nonprofits and exclude Gannett

New York will become the first state to offer a tax credit aimed at helping local news organizations. According to Rebuild Local News, which has been pushing for several different tax credits at the federal and state levels, the New York legislature and Gov. Kathy Hochul have agreed to a budget provision that will set aside $30 million a year for three years in order to offset the cost of hiring and retaining journalists.

Although the plan is multi-faceted, there are two aspects that I think are especially worthy of note.

The first is that calling it a “tax credit” is something of a misnomer — rather, it’s a payroll credit available to all news publishers, including nonprofits, which don’t pay taxes, and for-profits operating at a loss, which are also exempt from taxes under most circumstances. Zachary Richner, the founder of the 200-member Empire State Local News Coalition, explained that in a recent appearance on “E&P Reports,” a vodcast hosted by Mike Blinder, publisher of the trade publication Editor & Publisher. Given the importance of nonprofit startups in helping to solve the local news crisis, it makes sense to include them.

The second is that newspapers owned by publicly traded corporations are ineligible for assistance. That would exclude Gannett, the country’s largest newspaper chain, which is notorious for its slash-and-burn approach to managing its newsrooms. According to the chain’s website, Gannett currently owns 12 daily newspapers in New York, including well-known titles such as the Democrat and Chronicle of Rochester and the Times Herald-Record of Middletown.

Gannett shouldn’t be rewarded for destroying newspapers, but the provision does lead to some anomalies. For instance, Alden Global Capital, which, like Gannett, is notorious for driving up profits by hollowing out its newspapers, would presumably be eligible for assistance because it is a privately held hedge fund rather than a public company. On Twitter/X, I asked Steven Waldman, the president of Rebuild Local News, whether Alden would be able to put its hands on some state money. His answer: “Yes. I think so.”

Alden’s MediaNews Group chain owns four dailies in New York, including The Record of Troy, and The Saratogian. Alden also owns New York City’s legendary Daily News, which is listed as being part of MediaNews but which I understand is managed separately.

If I might speculate, it could be that there are several privately held chain owners in New York that are doing good work and that proponents of the credit didn’t want to exclude them. The largest privately held national chain doing business in New York is Hearst, whose Times Union of Albany is a well-regarded paper (but is not part of the Empire State coalition). In any case, even if Alden’s papers get some of the money, it provides an incentive for them to do the right thing.

Some other details of interest, quoting Rebuild Local News:

  • No newsroom can get more than $320,000.
  • The subsidy to newsrooms will be based on the number of  employees. The benefit will be up to $25,000 per employee (50% of the salary  up to a $50,000 wage.)
  • $13 million for firms with fewer than 100 employees, $13 million for bigger ones, $4 million for new hires.

As I said up top, there have been a number of tax credits proposed to help local news outlets over the past few years. The best known, the Local Journalism Sustainability Act, would have created credits not just for publishers but also for subscribers and advertisers. President Biden included a credit for publishers in his Build Back Better bill, which died at the end of 2021.

The question, as always, is whether government assistance to local news is a good idea. U.S. Rep. Claudia Tenney, R-N.Y., recently filed legislation to defund NPR in response to former senior editor Uri Berliner’s error-filled lament that the network has fallen in with the progressive left. Tenney, as it happens, is a lead sponsor of the Community News and Small Business Support Act, a bipartisan bill that would create tax credits for local publishers and advertisers.

Mike Blinder raised the issue of government interference with Richner and Waldman, who was also a guest on Blinder’s recent podcast. They responded, essentially, that the New York tax credit was worded in a neutral manner so that news organizations could not be punished for their specific content.

I agree that tax credits are about as neutral and arm’s-length as you can get in insulating journalism from government pressure. But it’s always going to be a challenge. Given that the New York credit expires after three years, you can be sure there will be a debate over whether to renew it as the expiration date approaches. That, in turn, will give politicians an opportunity to redefine eligibility requirements — and there’s always a possibility that some assessment of content might be part of that.

Still, the New York system seems like an experiment worth trying, and I’d like to see it spread to other states.

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Alden Global Capital to close eight weekly papers in Minnesota

The hedge fund Alden Global Capital, notorious for hollowing out its newspapers, is shutting down eight weekly newspapers in Minnesota. Louis Krauss of the Minneapolis-based Star Tribune reports that six of the papers are part of the Southwest News Media group and two are under the auspices of Crow River Media.

“The closings will leave the communities without their long-time local papers,” Krauss writes. “Two of the papers, the Shakopee Valley News and Chaska Herald, have been published for more than 160 years, while the Jordan Independent was founded 140 years ago.”

Alden owns 68 dailies and more than 300 weekly publications through its MediaNews Group as well as another seven larger-market dailies through Tribune Publishing. Tribune recently sold The Baltimore Sun to David Smith, the head of Sinclair Broadcasting; Smith’s first act was to meet with his staff and berate them. Alden also owns New York’s Daily News but for some reason has separated it from its Tribune holdings. In Massachusetts, Alden owns the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg.

A number of startup projects that Ellen Clegg and I wrote about in “What Works for Community News” were founded by people who quit an Alden-owned paper rather than continue to put up with round after round of cuts. Examples include relatively large outlets like The Colorado Sun and small projects like The Mendocino Voice and Santa Cruz Local.

Now it looks like some opportunities are about to open up in Minnesota for entrepreneurial-minded journalists.

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The Chicago public media merger, hailed two years ago, hits some serious bumps

Half full or half empty? Photo (cc) 2014 by bradhoc

Among the projects that almost made it into “What Works in Community News” was the Chicago Sun-Times and Chicago Public Media, which merged two years ago. It struck Ellen Clegg and me as a leading example of how public media could step up to preserve local and regional news, especially after the city’s leading paper, the Chicago Tribune, fell into the hands of the hedge fund Alden Global Capital.

Now the combined enterprise is laying people off. Dave McKinney of WBEZ, which is part of Chicago Public Media, reports that about 15% of 62 union content creators at the radio station are losing their jobs, and that four positions on the business side at the Sun-Times would be cut. In all, 14 jobs will be eliminated.

McKinney notes acidly:

The job cuts coincide with the debut of a $6.4 million, state-of-the-art studio at WBEZ’s Navy Pier office and follows a double-digit-percentage pay increase for Chicago Public Media’s top executive. Additionally, other high-level executives departed the not-for-profit news organization in December.

The announcement follows cuts and threats of cuts at a number of public media outlets around the country, including WAMU in Washington, Colorado Public Radio and, in Boston, WBUR and GBH, neither of which has announced layoffs but have pointedly said cuts may be coming.

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A riveting Boston Globe story about a medical disaster with ties to the local news crisis

St. Elizabeth’s Medical Center in 2012. Photo (cc) by John Phelan.

If you haven’t seen The Boston Globe’s story about a mother who died shortly after giving birth, perhaps because the hospital lacked a device it needed to stop her bleeding, then you have to stop what you’re doing and give it a read. Globe reporter Jessica Bartlett’s 2,800-word story is both riveting and incredibly disturbing. It’s also so well-crafted that I asked my intermediate reporting students to read it in class so we could talk about how it was put together.

Bartlett skillfully shifts back and forth between the frantic attempts to save Sungida Rashid’s life and the larger crisis at St. Elizabeth’s Medical Center, the Brighton hospital that Rashid and her husband, Nabil Haque, had chosen for the birth of their first child. We learn that St. Elizabeth’s did not have the device, known as an embolism coil, because the hospital’s supply had been repossessed. It turns out that Steward Health Care, a for-profit company that owns St. Elizabeth’s and eight other hospitals in Massachusetts, hadn’t been paying its bills.

Incredibly, Haque didn’t know that devastating fact until the Globe informed him about it after he and his daughter had moved back to Bangladesh.

The major question a reader might have after reading the story was how St. Elizabeth’s and Steward had fallen into such a financial mess. That story is laid out in an earlier story by Bartlett and in a column by Globe business columnist Larry Edelman, who explain that a private equity firm known as Cerberus Capital Management had bailed out the hospitals in 2010. According to Edelman, Cerberus quadrupled its money and flipped the hospitals in 2017.

As Edelman points out, Cerberus is “named after the three-headed dog that guards the gates of Hades in Greek mythology.” The firm is also deeply involved in the destruction of the newspaper business. In 2021, Julie Reynolds reported for Nieman Lab that Cerberus was the financial backer for the notorious hedge fund Alden Global Capital when it acquired Tribune Publishing’s nine major-market daily newspapers, including the Chicago Tribune, The Baltimore Sun and the Hartford Courant. Cerberus gets much of its money, in turn, from investments made by public employee pension funds, especially in California and Pennsylvania.

Reynolds talked about the Alden-Cerberus connection on our “What Works” podcast back in November 2021.

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