Tag: Alden Global Capital

Why Jeff Bezos should rescue Tribune’s newspapers from Alden Global Capital

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

Previously published at GBH News.

It’s going to take a miracle to save the Chicago Tribune, the Hartford Courant, New York’s Daily News and six other large-market dailies from the greedy clutches of Alden Global Capital, the hedge fund that’s widely regarded as the worst newspaper owner in the country.

On May 21, Tribune Publishing’s board is scheduled to vote on selling its papers. At this point, it looks like the only viable bid is from Alden, which has offered $635 million to boost its share of the company from 32% to 100%. A competing bid from the Baltimore hotel magnate Stewart Bainum was dealt a huge setback recently when his partner, the Swiss philanthropist Hansjörg Wyss, pulled out. Bainum, who wants to acquire Tribune’s Baltimore Sun and turn it over to a nonprofit, said he hasn’t given up. Right now, though, money and momentum are on Alden’s side.

Alden’s holdings include The Denver Post, The Mercury News of San Jose and, locally, the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg. All have been decimated, a fate that you can be sure is in store for Tribune’s papers if the hedge fund’s bid is accepted.

But it’s not too late if someone with vast riches and a demonstrated interest in journalism is willing to step up. Someone, for instance, like Jeff Bezos. The mega-billionaire owner of The Washington Post would be the perfect savior for the Tribune papers. Would he do it? I have no idea. If he were willing, though, he could breathe new life into some of our most important journalistic institutions.

Now, I know what you’re thinking. Bezos’ ruthlessness in running Amazon has caught up with him; his public image has taken some well-deserved hits since 2013, when he found $250 million in a spare pants pocket and bought the Post. Do we really want someone whose drivers have to pee into bottles in order to make their appointed rounds having even more power than he does already? Yes, Alden already owns about 100 papers via its MediaNews Group subsidiary. But whoever wins Tribune will control some of the most influential daily newspapers in the country. How can we be sure that Bezos wouldn’t use that power for ill?

To answer that question, we have to look at the record. And however brutal his treatment of Amazon employees may be, he has been an exceptionally good steward of The Washington Post. There is no evidence that he has interfered in the Post’s news coverage, or even in its editorial pages.

Then-executive editor Marty Baron stressed that Bezos had been hands-off when I interviewed him for my 2018 book “The Return Of The Moguls.” And Baron repeated that at a recent event sponsored by Northeastern’s School of Journalism. “His involvement on the news side was nothing beyond approving our budget,” Baron said. (Note: I’m on the faculty.)

What evidence exists to the contrary is, frankly, pretty thin gruel. In his new book, “Fulfillment: Winning And Losing In One-Click America,” ProPublica reporter Alec MacGillis observed that, after buying the Post, Bezos bought a mansion in Washington, D.C., and greatly increased Amazon’s lobbying presence in the capital.

MacGillis also noted that the Post ran a cheerleading editorial in favor of Amazon’s second headquarters, known as HQ2, coming to the D.C. subrub of Arlington, Virginia. “It would be left to a local business journal, not the Post, to uncover the emails showing the lengths to which Arlington officials had gone to ease Amazon’s path,” MacGillis writes. OK, fine. But the Post was hardly the only newspaper that expressed enthusiasm for HQ2 and the thousands of jobs it would bring. As a reminder, take a look at some of The Boston Globe’s coverage.

Indeed, Bezos has built such a sterling reputation for his leadership of the Post that Hamilton Nolan, who keeps tabs on the paper for the Columbia Journalism Review, recently devoted an entire piece to speculating about what would happen if Bezos woke up one morning and decided to weaponize the paper on behalf of his business and personal interests. Nolan wrote that “the editorial independence of the Post should never be taken for granted.” No, it shouldn’t. But after more than seven years of ownership, Bezos has done very little to raise concerns about his vision for the proper role of a newspaper owner.

Needless to say, Bezos could afford to buy Tribune. Even so, it’s worth reminding ourselves just how rich he is. In January 2020, his net worth was $118 billion, according to the Bloomberg Billionaire Index. By early 2021, it had risen to $196 billion as the pandemic super-charged Amazon’s business even while millions of Americans were being thrown out of work.

In other words, it would cost Bezos less than 1% of the money he’s made just over the last year to buy Tribune in its entirety. The latest news about Alden, meanwhile, is that the hedge fund “probably violated federal pension protections by putting $294 million of its newspaper employees’ pension savings into its own funds, according to a Labor Department investigation.” The story, reported by Bezos’ Washington Post, noted that Alden has admitted no wrongdoing and paid the money back. But still.

Bezos is 57, an age when many successful people start thinking about their legacy. He’s stepping down as Amazon’s CEO later this year. By investing resources in The Washington Post, he transformed it into a profitable, growing, digitally focused news organization in just a few years. Attempting to work the same magic with Tribune’s papers would be a worthy challenge.

Is this any way to ensure the future of journalism? No, it is not. As I wrote recently, the fate of great news organizations shouldn’t be left solely to the whims of unregulated, predatory capitalism. Unfortunately, that’s the system we have, and it’s not going to change between now and May 21.

So please, Mr. Bezos. Is it OK if I call you Jeff? Give these papers a chance to thrive. You did it with the Post. You can do it again.

Is government-funded local journalism an idea whose time has come?

U.S. Treasury. Photo (cc) 2007 by Adam Fagen.

The local news crisis has some people talking seriously about government funding for journalism. The idea isn’t entirely new. Nonprofit news organizations enjoy tax benefits, and public broadcasters receive some federal money. As I recently reported for GBH News, federal pandemic relief actually meant that 2020 was a better year than 2019 for some media outlets.

But what comes next? Local media are being squeezed on one side by technology and on the other by avaricious chain ownership. Ideally, you would want to find ways to help independent news organizations without rewarding the corporations and hedge funds that are cutting newsrooms without conscience. But it’s hard to imagine how you would draw distinctions between the two.

Moreover, direct government assistance raises serious questions about how journalism can play its traditional watchdog role if it’s receiving money from the watchdog. It strikes me that it would be a hard sell with taxpayers, too. Nevertheless, some smart people are thinking about how we can provide communities with the news and information they need in an era of market failure.

One idea was offered recently by Osita Nwanevu in The New Republic. Under the headline “The Next Infrastructure Bill Should Save Local Journalism,” Nwanevu writes:

Really, the administration’s push for a more capacious definition of infrastructure should encourage us to think even more creatively about what else should qualify for the next package as it takes shape. Can it seriously be argued, for instance, that access to the news isn’t an important feature of any well-functioning society? We all depend upon a steady stream of accurate information; obviously, we owe much of our awareness that America’s infrastructure is crumbling to the work of journalists who helped alert policymakers and the public to the problem in the first place.

Nwanevu notes that the $3 per capita we currently spend on public broadcasting is a pittance compared to the $90 that is the average in many other developed countries. He also writes favorably of ideas that Andrew Yang put forth during his presidential campaign for a fellowship program for journalists and a “Local Journalism Fund” to help news outlets transition to sustainability. But Nwanevu is also thinking bigger than that, calling for $30 billion to $40 billion over the next 10 years.

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I’m not sold, though, mainly because Nwanevu only half-defines the problem. He cites the challenges posed by technology and the rise of Google and Facebook, but he makes no mention of corporate ownership, which has made the crisis much worse than it needed to be. With chains like Gannett and hedge funds like Alden Global Capital bleeding their newspapers dry, there is no money left over to invest in the future. Meanwhile, a number of independent news organizations across the country, for-profit and nonprofit, are doing a good job of serving their communities. We need more.

The Columbia Journalism Review recently published a conversation with the longtime media reformer Robert McChesney; Steve Waldman, the co-founder of Report for America; and the economist Andrea Prat. All of them offer their own ideas for providing some public assistance for news, with McChesney’s proposal for a “Green New Deal for journalism” being the most ambitious. He describes the challenge this way:

This is the public policy imperative facing the United States regarding journalism in 2021: we need the funding to support independent, competitive, professional local news media. That money must come from the government, but we cannot allow the government to pick and choose who gets the money. The policy must be like the postal subsidy of newspapers: large enough to get the job done, and it cannot discriminate on the basis of ideology or political viewpoint. Censorship is entirely unacceptable. It must allow the people to make of it what they will, and trust them in the process of self-government.

So how would McChesney accomplish that? Through elections at the county level (that wouldn’t really work in Massachusetts, which is pretty much county-free) to elect boards that would distribute between $32 billion and $35 billion a year over a five-year period to fund local news and foster the development of new nonprofit organizations. It’s pretty breath-taking, and McChesney admits there’s no support for such a plan in Washington at the moment. But the value McChesney has always brought to the table is that he thinks big and gives us a chance to wrap our minds around larger possibilities.

Waldman’s plan, by contrast, already has a great deal of support on Capitol Hill: a $250 refundable tax credit to pay for local news subscriptions or to donate to nonprofit media outlets. He would like to see a tax credit for hiring and retaining journalists as well, which is something currently being done in Canada.

Prat, though, argues that the tax credits would mainly benefit large news organizations, whereas “the most urgent problem is not the overall information level but its distribution across the population.” A voucher system, he says, “would give more access to information-poor people.”

So, has the moment come for government-funded news? My own guess is probably not, at least if we’re talking about the ambitious proposals put forth by Nwanevu and McChesney. But some modest assistance aimed at helping news organizations make the transition to a sustainable future might well be a good idea.

Waldman’s tax credits and Prat’s vouchers could be seen as extensions of the help we already provide through nonprofit tax incentives. And surely we can provide more funding for public media while broadening the definition to include community-based journalism.

Everything needs to be on the table.

A major setback in the quest to save Tribune Publishing from Alden Global Capital

Col. Robert McCormick, legendary publisher of the Chicago Tribune

There was some very bad news Saturday in the race to save Tribune Publishing from the hedge fund Alden Global Capital. Hansjörg Wyss, who made his billions in the medical device field, ended his relationship with the hotel magnate Stewart Bainum, according to Katie Robertson of The New York Times.

Bainum insists he’s going to go it alone, but this is a major setback. Bainum and Wyss had outbid Alden, but it still wasn’t clear if they were going to succeed. Now Bainum has to find new investors.

Wyss’ main interest was the Chicago Tribune; apparently he got under the hood and discovered that the finances were a mess. He also reportedly came to the conclusion that his hope of transforming the Tribune into a national paper along the lines of what Jeff Bezos did with The Washington Post was unrealistic. Too bad that serving the third-largest metro area in the U.S. wasn’t good enough for him.

Back when this all started, Alden was going to increase its share in Tribune from 32% to 100%, keep eight of the chain’s nine major-market newspapers, and spin off The Baltimore Sun and several smaller sister papers to Bainum — who, in turn, planned to take them nonprofit. Bainum decided to bid for the entire chain after he concluded that Alden was chiseling him on fees, as Lukas Alpert reported in The Wall Street Journal.

What’s not clear is what happens if we return to the first iteration of the deal. Will Bainum still get The Baltimore Sun? Or is Alden now prepared to take charge of the entire chain — and start putting the squeeze on newsrooms that are already a shadow of their former selves?

Previous coverage.

How a campaign to save The Baltimore Sun may topple Alden’s ambitions

Photo (cc) 2010 by Brent Payne

Washington Post reporters Elahe Izadi and Sarah Ellison have a terrific account of how the campaign to save Tribune Publishing from Alden Global Capital got started.

It began with Save Our Sun, a group launched by several Baltimore Sun reporters. And as recently as a few weeks ago, it looked like they had won a significant but limited victory: Alden would take ownership of eight of Tribune’s nine major-market dailies, spinning the Sun and several affiliated papers off to nonprofit ownership.

That’s when things got more interesting. When Stewart Bainum, the hotel magnate behind the nonprofit plan, grew frustrated with Alden’s terms, he put together a group of billionaires and outbid Alden for the entire chain. Though Bainum’s victory is not yet assured, things are moving in the right direction. The papers would be spun off to local owners, some of them nonprofits, which would represent the biggest victory over chain journalism in many years.

Among the papers that would be saved from Alden’s clutches: the Chicago Tribune, New York’s Daily News and the Hartford Courant.

Meanwhile, Joshua Benton of the Nieman Journalism Lab explains how Alden can win even if it loses: the hedge fund already owns 32% of Tribune. So if the Bainum group ends up paying a premium, Alden will be among the beneficiaries.

Previous coverage.

 

Beyond scale: Looking for hope amid the media’s ongoing meltdown

Recasting a media future. Photo (cc) 2007 by Goodwin Steel Castings.

Previously published at GBH News.

Bad news about the media business is nothing new. From the moment that the commercial web slipped into view in the mid-1990s, news organizations have been on the losing end of a long war over how — and even whether — journalism should be paid for.

Some recent developments, though, offer reasons for hope amid the gloom. Consider:

• BuzzFeed recently acquired HuffPost and immediately took an axe to it, laying off 47 employees, with the threat of more cuts to come. I will concede there’s nothing positive about that. But the debacle points to the limits of media funded by venture capital and could encourage more sustainable models.

• The notorious hedge fund Alden Global Capital was on the verge of acquiring Tribune Publishing, whose nine large-market daily papers include the Chicago Tribune, New York’s Daily News and, locally, the Hartford Courant. But a group of billionaire investors led by Baltimore hotel magnate Stewart Bainum stepped forward to propose breaking up the chain and operating the papers locally, some of them on a nonprofit basis. And, at least at the moment, it looks like they might win.

• As media observers had long feared, the departure of former President Donald Trump from the White House led to an immediate decline in news consumption — not just at the cable news networks, but at national and regional newspapers too. Yet the post-Trump slump represents a chance to emphasize local news, which has more of an effect on readers’ actual lives and helps build community.

What a lot of this comes down to is the end of the idea that scale will save the digital news business. “Local doesn’t scale” has long been the motto of community-based entrepreneurs. But now it’s looking like scale doesn’t work at the national level, either, with a few notable exceptions like The New York Times and The Washington Post.

Josh Marshall, founder of a small but successful political website called Talking Points Memo that depends mainly on reader revenue, described the dilemma in a recent essay for The Atlantic. For years, he wrote, venture capitalists kept pouring more and more money into digital news outlets hoping that they would someday become large enough to dominate their rivals, rake in a bounty of ad revenues and give the investors a chance to cash in.

Instead, the digital ad money went to Google and Facebook, leaving these outlets without any way forward.

“The whole digital news industry has been based on lies,” Marshall wrote, adding: “Investors realized that the tantalizing prospect of ad revenue lock-in that had always appeared just over the horizon was an illusion, so they shut off the investment spigot … In digital publishing, scale was the god that failed.”

If bigger isn’t necessarily better, that points to an opportunity for local news, whose tribulations have been the subject of considerable discussion over the past several years. Last November, I wrote that reviving community journalism could help overcome the angry polarization of the Trump era. Now three scholars have conducted a study showing there may be something to it.

According to an overview by Joshua Benton of the Nieman Journalism Lab, the researchers — Joshua Darr of Louisiana State University, Matthew Whitt of Colorado State University and Johanna Dunaway of Texas A&M — conducted a survey of readers after The Desert Sun of Palm Springs, California, decided to drop from its opinion pages all syndicated columns and references to national politics for one month.

Darr, Whitt and Dunaway compared The Desert Sun’s readers to those of a control paper and found that polarization was less than what might otherwise have been expected. The numbers were small and didn’t really prove anything one way or the other. But, as the three wrote, the effect was notably salutary regardless of the actual numbers, since the experiment pushed the paper to pay more attention to what was taking place in its own backyard.

“Local newspapers are uniquely positioned to unite communities around shared local identities, cultivated and emphasized through a distinctive home style, and provide a civil and regulated forum for debating solutions to local problems,” they wrote. “In Palm Springs, those local issues were architectural restoration, traffic patterns and environmental conservation. The issues will differ across communities, but a localized opinion page is more beneficial for newspapers and citizens than letters and op-eds speckled with national political vitriol.”

It’s worth noting, too, that The Desert Sun — a Gannett paper — is small enough to be regarded as a truly local paper. According to the Alliance for Audited Media, the Sun’s combined digital and print weekday paid circulation is 15,862, and 16,993 on Sundays. But will the experiment have a lasting impact?

According to Julie Makinen, the paper’s executive editor, the answer is yes. Although the ban on national politics lasted only lasted for a month, she wrote approvingly about the study last week and added that it “is useful to us in that it helps point the way for further improving our opinion pages as we bring on a new editor for the section.”

Which brings me back to where I started. If scale is “the god that failed,” as Josh Marshall puts it, and if local news and opinions are an answer to rebuilding both journalism and civic engagement, what should come next?

Damon Kiesow of the Missouri School of Journalism, whose professional stops include a stint on the digital side at The Boston Globe, recently tweeted out a link to a piece he wrote more than a year ago that seems even more relevant now than it did then.

Because most local newspapers are owned by national chains, he wrote, those papers often end up getting caught in a strategy of pursuing scale even though it makes no sense for them. Journalistically, it means loading up on syndicated content. On the business side, it means chasing advertising dollars — or pennies — that are going to go to Google and Facebook in any case.

“To succeed,” he wrote, “local media have to abandon scale and refocus on community. Advertising remains part of the equation. But reader revenue, donations, foundation funding — yard sales if necessary — are all in the mix.” He concluded that “the internet is infinite; your community is not. Go small, or we are all going home.”

For a generation now, much of the news media have been seeking magical one-size-fits-all solutions to the economic destruction created by technology and out-of-control capitalism. The problem is that there are no easy answers, and scaling up has only made things worse. Those who have succeeded have done so through the hard work of figuring out what their communities need — and then going about the business of serving those needs.

A new editor in Lowell and Fitchburg

MediaNews Group, the newspaper chain owned by Alden Global Capital, has named a new senior editor at The Sun of Lowell and the Sentinel & Enterprise of Fitchburg: Bruce Castleberry, who will remain as regional sports editor for Massachusetts.

Castleberry replaces Tom Shattuck, who left late last month.

Could Alden be frozen out?

The group of billionaire investors headed by Baltimore hotel magnate Stewart Bainum has pulled out ahead of the hedge fund Alden Global Capital in the bidding for Tribune Publishing’s nine daily newspapers. The Bainum group would split the chain apart and run at least some of the papers as nonprofits. Cara Lombardo and Lukas I. Alpert report in The Wall Street Journal:

If Alden loses the deal, it would mark a stunning, 11th-hour turnaround for the New York hedge fund, and a major victory for critics who say its model of aggressive cost-cutting has hurt the local news industry. Alden had spent nearly a year-and-a-half positioning itself to take over Tribune, publisher of nine large-market daily newspapers including the Chicago Tribune, New York Daily News and the Baltimore Sun.

Previous coverage.

A remarkable editorial in the Orlando Sentinel pleads for deliverance from Alden

Orlando, Florida. Photo (cc) 2020 by Joe Flood.

The Orlando Sentinel — one of nine Tribune Publishing newspapers that are either on the verge of being bought and destroyed by Alden Global Capital or rescued by a group of would-be billionaire saviors — has published a remarkable editorial about its fate.

“Alden’s history with newspaper ownership is akin to a biblical plague of locusts — it devours newsroom resources to maximize profits, leaving ruin in its wake,” the editorial says. Indeed, Alden, the hedge fund behind MediaNews Group, has destroyed papers from coast (the Orange County Register) to coast (the Boston Herald) and at various points in between (The Denver Post).

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The Sentinel’s local and regional coverage would be valuable to its community in any case. But as the editorial notes, it’s the paper’s reporting on indicted former elected official Joel Greenberg that led the national press to U.S. Rep. Matt Goetz, a Florida Republican whose meltdown encompasses so much alleged wrongdoing that it can’t be easily summarized here.

As I wrote earlier this week, a group led by the hotel magnate Stewart Bainum, who hopes to take Tribune’s Baltimore Sun nonprofit, has offered Tribune’s board slightly more money than Alden ($650 million to $630 million). But the board has been leaning Alden’s way because the Bainum group hasn’t pulled its financing together yet. The Sentinel editorial puts it this way:

This is the kind of principled ownership the Sentinel and other Tribune papers like the Chicago Tribune and South Florida Sun Sentinel need to survive and thrive, investors who see not just an opportunity to make money (because many papers, ours included, still make money) but also a way to strengthen their communities.

With chains of varying levels of greed such as Gannett, Advance and McClatchy controlling almost everything else, the fight of Tribune really feels like it’s the last battle in a long war for the soul of American newspaper journalism.

If the Bainum group loses, the only thing left will be the hard work of building an alternative local news ecosystem.

How FCC ownership regulations helped shape the Boston media landscape

Photo (cc) 2008 by Dan Kennedy

The U.S. Supreme Court on Thursday unanimously upheld a 2017 ruling by the FCC to loosen media ownership regulations, including an end to the so-called cross-ownership ban. That ban prohibits one entity from owning a newspaper and a TV or radio station in the same market.

The FCC’s long, tortured history on cross-ownership shaped the Boston media scene from the 1950s through the ’80s. Although the ban wasn’t formalized until 1975, the FCC had much to say about the issue well before that. No one told the story better than John Aloysius Farrell in his 2001 book “Tip O’Neill and the Democratic Century,” which I wrote about for The Boston Phoenix.

It’s a pretty amazing tale, and it’s crucial if you want to understand how the dynamic between The Boston Globe and the Boston Herald played out over the course of those decades. The very short version: the Boston Herald Traveler, with the support of the Kennedys, obtained the license to Channel 5 in the 1950s through corrupt means. The Globe, with the help of O’Neill, then a young congressman, exposed that corruption. That, in turn, led to the Herald’s losing the license to Channel 5 in the early 1970s, thus cementing the Globe’s status as the city’s dominant daily newspaper.

The final act played out in the late 1980s when Rupert Murdoch, who then owned the Herald, bought Channel 25 and sought a waiver from the FCC that would have allowed him to keep both. Sen. Ted Kennedy slipped an amendment into a bill that made it virtually impossible for the FCC to grant such a waiver. Several years later Murdoch sold the Herald to Pat Purcell, a longtime lieutenant. Although the Herald enjoyed a few years of prosperity under Purcell, it eventually entered a long, slow decline, ending in bankruptcy and the sale to the hedge fund Alden Global Capital in 2018.

So now that the cross-ownership ban is gone, what’s next? A number of organizations, including the media-reform group Free Press, opposed the FCC’s move, arguing that it will make it more difficult for local groups, including those representing women and people of color, to acquire media outlets. I agree, although there’s also a case to be made that newspapers and, to some extent, broadcast media are so moribund that ownership regulations are more about the last century than this one.

It does seem likely to me that we’re going to see newsrooms that combine newspaper and broadcast operations in an attempt to save money. We’ll see less diversity and less coverage as a result. But given that virtually all media have shifted to the unregulated internet, the ultimate effect of such consolidation is yet to be determined.