Tag: Alden Global Capital

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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Wendi Thomas talks about her work at MLK50, a nonprofit covering social justice in Memphis

Wendi C. Thomas. Photo (cc) 2022 by Ellen Clegg.

On the latest “What Works” podcast, we talk with Wendi C. Thomas, the editor and publisher of MLK50: Justice Through Journalism, which is based in Memphis, Tennessee. Thomas founded MLK50 in 2017 as a one-year project designed to focus on the antipoverty work of Dr. Martin Luther King Jr. Dr. King had traveled to Memphis in April of 1968 to support striking sanitation workers who were fighting for safer working conditions and a living wage.

But MLK50 became much more than a one-year project. Thomas and her staff have gone on to produce journalism that has changed the dialogue, and changed lives, in Memphis. Her work has garnered numerous awards. In 2020, she was the winner of the Selden Ring Award for her groundbreaking investigative series, “Profiting from the Poor,” an investigation of a nonprofit hospital that sued poor patients over medical debt. The series, co-published with ProPublica, had major impact: the hospital erased $11.9 million in medical debt. MLK50 is one of the projects that we profile in our book, “What Works in Community News.”

Ellen Clegg has a Quick Take on the situation at the Houston Landing, a highly anticipated and well-funded nonprofit newsroom that launched in 2023. The Landing is in turmoil after CEO Peter Bhatia fired the editor and the top investigative reporter for reasons that remain mysterious.

My Quick Take is on The Baltimore Sun, the venerable 186-year-old daily newspaper that at one time was home to the infamously caustic writer H.L. Mencken. Earlier this month, Alden Global Capital sold the Sun to a right-wing television executive who hates newspapers. But not to fear — public interest journalism is alive and well in Baltimore, as I explain.

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

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How the NY Times over-interprets its reporting about billionaire media owners

Jeff Bezos. Photo (cc) 2019 by Daniel Oberhaus.

The New York Times has published a story (free link) that calls into question the rise of billionaires who own news organizations, noting that The Washington Post under Jeff Bezos, the Los Angeles Times under Patrick Soon-Shiong and Time magazine under Marc Benioff are all losing money. True enough. My problem with the story is that reporters Benjamin Mullin and Katie Robertson try too hard to impose an ubertake when in fact there’s important background with each of those examples. Mullin and Robertson write:

All three newsrooms greeted their new owners with cautious optimism that their business acumen and tech know-how would help figure out the perplexing question of how to make money as a digital publication.

But it increasingly appears that the billionaires are struggling just like nearly everyone else. Time, The Washington Post and The Los Angeles Times all lost millions of dollars last year, people with knowledge of the companies’ finances have said, after considerable investment from their owners and intensive efforts to drum up new revenue streams.

The role of wealthy newspaper owners is something of ongoing interest to me. My last book, “The Return of the Moguls” (2018), focused on the Post, The Boston Globe and the Orange County Register in Southern California, owned by a rich Boston-area businessman named Aaron Kushner. At the time the book came out, the Post was flying high, the Globe was muddling along and the Register was failing; it eventually fell into the hands of the slash-and-burn hedge fund Alden Globe Capital. The Post’s and the Globe’s fortunes have since moved in opposite directions.

Here are the particulars that get glossed over in Mullin and Robertson’s attempt to impose an overarching framework:

• Bezos, who bought the Post in 2013, made deep investments in technology and built up the staff. The result was years of growth and profits, which only came sputtering to a halt after Donald Trump left the White House. Former executive editor Marty Baron, in his book “Collision of Power,” suggests that, over time, a disciplined approach to hiring became more lax. In other words, the Post got ahead of itself and is now in the midst of a reset. A new publisher, William Lewis, begins work this month, and we’ll see if he can articulate a strategy that amounts to more than “just like the Times only not as comprehensive.”

• Benioff bought a dog and, predictably, it’s going “woof woof.” Time was the largest of the Big Three newsweeklies, along with Newsweek and U.S. World & News Report; it’s also the only one of the three that still exists in a somewhat recognizable form. Newsweeklies succeeded because, pre-internet, you couldn’t get great national papers like the Times, the Post and The Wall Street Journal delivered to your doorstep. Not only is there no discernible reason for them to exist anymore, but the leading newsweekly these days, at least in terms of cachet, is The Economist.

• Not all billionaire owners are in it for the right reasons, and Soon-Shiong has proven to be an uncertain leader. Does he care about the Los Angeles Times or not? He’s built it up; now he’s tearing it down. He recently pushed out his executive editor, Kevin Merida, the most prominent Black editor in the country, and he’s done some truly awful things such as delivering Tribune Publishing’s papers to Alden Global Capital and more recently selling The San Diego Union-Tribune to Alden.

So what does that tell us about billionaire owners? Not much. As Mullin and Robertson acknowledge, some are doing just fine, including The Boston Globe under John and Linda Henry and The Atlantic under Laurene Powell Jobs. They could have also mentioned the Star Tribune of Minneapolis under Glen Taylor or, for that matter, The New York Times, a publicly traded company that is nevertheless under the tight control of the Sulzberger family. I don’t think the Sulzbergers are billionaires, but they are not poor.

At the moment, it seems that the only two viable models for large regional dailies is individual ownership by wealthy people who are willing to invest in future profitability and nonprofit ownership, either in the form of a nonprofit organization owning a for-profit paper, as with The Philadelphia Inquirer and the Tampa Bay Times, or a paper that goes fully nonprofit, as with The Salt Lake Tribune and The Baltimore Banner. The Banner is a digital startup that nevertheless is attempting to position itself as a comprehensive replacement for The Baltimore Sun. The Sun, in turn, was one of the Tribune papers that Soon-Shiong helped gift-wrap for Alden, and just this past week was sold to right-wing television executive David Smith.

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Why we should be wary of The Baltimore Sun’s return to local ownership

The Baltimore Sun’s convoluted ownership journey took an unexpected turn on Monday. The notorious hedge fund Alden Global Capital, which acquired the paper as part of its purchase of Tribune Publishing in 2021, sold the Sun to David Smith, who’s executive chairman of the television network Sinclair. The price has not been disclosed.

Smith is a Baltimore guy, and he’s buying the Sun as an individual — that is, the Sun will not be part of Sinclair. In that respect, the deal is similar to Jeff Bezos’ purchase of The Washington Post in 2013. The Post is not part of Amazon, although the mega-retailer was enlisted to sell discount descriptions to the Post, especially during the early years of Bezos’ ownership.

We are in the early hours of the Sun deal, so we don’t know how this is going to play out. It’s striking how much fear and criticism I’ve seen given Alden’s reputation as the worst newspaper owner on the planet, infamous for slashing newsrooms, selling off real estate and making journalists work out of their homes. Normally a transfer to independent ownership would be celebrated, and, in fact, Smith might provide an infusion of cash and energy. Then again, he might also bring his toxic brand of right-wing politics to the Sun.

The Sun is the flagship of a regional group that also includes the Capital Gazette in Annapolis, Maryland, the site of a horrific mass shooting some years ago.

This didn’t have to happen. Back when Tribune was for sale, Baltimore hotel magnate Stewart Bainum reached an agreement to buy the Sun from Alden once Alden had acquired Tribune. Bainum, though, came to believe that Alden was not adhering to that agreement, and he wound up bidding for all of Tribune’s nine major-market newspapers.

Although Bainum was offering more money than Alden ($680 million versus $635 million), word at the time was that Alden’s bid was more straightforward, and the vulture capitalists won the prize. Among other things, Patrick Soon-Shiong, the billionaire owner of the Los Angeles Times and then a member of Tribune’s board, declined to stop the sale to Alden, for which he was roundly criticized.

Bainum, meanwhile, used some of his wealth to found The Baltimore Banner, a nonprofit digital venture that immediately established a reputation for journalistic excellence. It will be fascinating to see whether Smith rebuilds the Sun into a worthy competitor to the Banner, or if instead he uses it to grind his political axe.

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