The Los Angeles Times may be on the verge of falling into Alden’s clutches

Photo (cc) 2012 by Gerald Angeles

Rick Edmonds of Poynter weighed in on Thursday with devastating news: it’s looking more and more like Patrick Soon-Shiong will sell the Los Angeles Times and The San Diego Union-Tribune, with the hedge fund Alden Global Capital as the most likely buyer.

If you’ve been following this story for a while, you know that Alden — notorious for cutting newsrooms and even closing them down, leaving reporters to work out of their homes and their cars — is on the verge of pulling off a complicated deal to buy Tribune Publishing.

Soon-Shiong bought his papers from tronc, Tribune’s predecessor company, just a few years ago and is still in a position to block Alden’s acquisition of Tribune. Edmonds, though, believes it is far more likely that Soon-Shiong will let the deal go through and throw in his newspapers as well.

Soon-Shiong, a billionaire surgeon, faces a potentially debilitating lawsuit, Edmonds reports. He also notes that the Times has gone without an editor for several months now, and that several candidates withdrew because of a possible sale. Moreover, Edmonds says, Soon-Shiong just doesn’t seem to be having much fun playing the benevolent newspaper owner, unlike Jeff Bezos at The Washington Post and John and Linda Henry at The Boston Globe.

After The Wall Street Journal reported recently that Soon-Shiong might be looking to get out of the newspaper business, Soon-Shiong denied it. But it seemed likely then that there might be something to it, and Edmonds’ piece only adds to the growing body of evidence that the L.A. Times, one of the most important news organizations in the country, may soon be eviscerated by Alden.

Edmonds also notes that the sale could result in Alden’s owning all three of Southern California’s major dailies — not just Soon-Shiong’s properties, but also the Orange County Register, which it already owns. Ironically, tronc was blocked from acquiring the Register several years ago because of antitrust concerns, thus paving the way for Alden. Apparently those concerns have now vanished as the number of plausible buyers continues to shrink. All roads, it seems, lead to Alden.

If Soon-Shiong is determined to get out, there’s one more step he can take: Donate his papers to a nonprofit organization, or perhaps to different nonprofits in L.A. and San Diego. This being the newspaper business that we’re talking about, he wouldn’t be leaving that much money on the table, and there would be tax advantages as well.

He could also ensure that he’d be remembered as the savior of the L.A. Times rather than the villain who paved the way for its destruction. I hope he cares.

‘Mogul Roulette,’ or the totally random destruction of local news

Previously published at GBH News.

In response to the rampaging vulture capitalism that was threatening to destroy their newspaper, union employees at the Hartford Courant last year launched a campaign to find a nonprofit organization that would save their jobs and the journalism their community depends on.

Not only did they fail, but the situation at the Courant, the oldest continuously published newspaper in America, just got infinitely worse.

Meanwhile, 300 miles to the south, a similar effort was under way to save The Baltimore Sun. It paid off big-time, as the Sun and several sister papers are now on the verge of being acquired by a nonprofit foundation that will operate them in the public interest.

No doubt you’ve read a lot here and elsewhere about the local news crisis, and about the role of hedge funds and corporate chain owners in hollowing out once-great newspapers that were already struggling.

Yet what we don’t talk about often enough is the sheer random nature of it all — and why we assume there’s nothing that can be done about a hedge fund destroying a paper here or a nonprofit or benevolent billionaire saving a paper there. We have been so conditioned to thinking that the untrammeled forces of the market must be allowed to play out that we’ve lost sight of what we’re losing. It shouldn’t be this way.

Last week was a particularly fraught moment in the collapse of local journalism.

First we learned that the hedge fund Alden Global Capital, the most avaricious newspaper owner in the country (don’t just take my word for it; as Margaret Sullivan of The Washington Post puts it, “Being bought by Alden is the worst possible fate for the newspapers and the communities involved”), was making a $630 million bid to increase its share of Tribune Publishing — whose holdings include the Courant — from 32% to 100%.

The announcement came with at least a little bit of good news: Alden would spin off The Baltimore Sun to a nonprofit. Even better, Patrick Soon-Shiong, the billionaire owner of the Los Angeles Times and The San Diego Union-Tribune, was in a position to block Alden if he so chose.

Rick Edmonds of Poynter speculated that wouldn’t happen. But hope springs eternal — or at least until last Friday. That’s when Lukas Alpert of The Wall Street Journal reported that Soon-Shiong himself might be looking to get out of the newspaper business less than three years after he got in. Worse, Soon-Shiong was said to be looking at offloading his papers to a larger media group. Though neither Alpert nor his soures said so, Alden would be the most likely buyer.

Soon-Shiong, fortunately, denied he’d lost interest in newspapers. But Alpert is a good reporter, so it’s hard to believe that there isn’t something to it.

Call it Mogul Roulette.

So let’s survey the landscape, shall we? Tribune’s papers, which include the Chicago Tribune, New York’s Daily News, the Orlando Sentinel, the Courant and others, will be gutted if the Alden deal goes through. In fact, the Courant is already operating with neither a printing press nor a newsroom.

On the other hand, The Baltimore Sun has been granted a new lease on life. We don’t know what’s going to happen in L.A. or San Diego. And, here and there, large regional papers with either strong private ownership (The Boston Globe, the Portland Press Herald, the Star Tribune of Minneapolis, The Seattle Times) or nonprofit control (The Philadelphia Inquirer, The Salt Lake Tribune, the Tampa Bay Times and, soon, the Sun) are providing their communities with the news and information they need, even if they still face challenges.

This situation is unacceptable. Reliable news is vital to democracy, and though we don’t necessarily need legacy newspapers to deliver it, they remain the most widespread and efficient means for doing so. As the media scholar Alex Jones has written, newspapers continue to produce the overwhelming share of accountability journalism that we need to govern ourselves — what Jones calls the “iron core.” We shouldn’t be dependent on whether the newspaper in our community is owned by someone who believes in journalism’s civic mission or who simply sees it as a piggy bank to be depleted before moving on to the next victim.

Several years ago I had a conversation about newspaper ownership with Victor Pickard, a scholar at Penn’s Annenberg School; he would later go on to write “Democracy without Journalism?,” a call for (among other things) greatly increased funding for public media. Why, I asked him, should communities have so little control over who owns their local newspaper?

We didn’t come up with any answers that day, although Pickard did suggest that antitrust laws be used more aggressively. These days, unfortunately, we are dealing with the antitrust legacy of Robert Bork, who developed a theory that any amount of monopolization is just fine as long as it doesn’t drive up prices.

The Bork doctrine makes no sense in the shrinking newspaper business. At one time Tribune Publishing, then known as tronc, proposed uniting the L.A. Times, the Union-Tribune and, in the middle, the Orange County Register, whose previous owner, Aaron Kushner, had steered into bankruptcy. Soon-Shiong could have been the savior of all three papers instead of just the two he bought from tronc. Instead, a federal judge ruled that such a combination would violate antitrust laws because it might drive up the price of ads. (Your honor, we need to drive up the price of ads.) Yet, paradoxically, Bork’s theories say nothing about giant chains stretching across the country and destroying local newspapers.

What comes next? Maybe Soon-Shiong will step forward and outbid Alden for the rest of Tribune, placing the entire chain in much better hands. Or maybe he’ll sell to Alden. In any case, it’s unacceptable for the fate of local journalism to be left to the whims of unbridled capitalism. We need to start thinking about what alternatives to that model might look like.

The Globe will partner with the Portland Press Herald on a Spotlight reporting project

The Boston Globe will partner with the Portland Press Herald on an unspecified investigative reporting project, according to the trade publication Editor & Publisher. The partnership will produce “a multi-part investigative report that will be published by both organizations this fall.”

The project will be funded by the Spotlight Investigative Journalism Fellowship, established by the Globe and Participant Media, the producers of the movie “Spotlight.” Grants of up to $100,000 are awarded to reporters or teams of reporters. This is the first time the Globe has partnered with another news organization. The series will be published by both papers.

Scott Allen, the Globe’s assistant managing editor for projects, declined in an email to say what the topic of the reporting would be — but when I noted that the Press Herald reporter who’ll be working on the project, Penelope Overton, covers the lobster industry, Allen said that “we expect to take full advantage of her considerable expertise.”

There are some interesting intersections between the Globe and the Press Herald. The E&P story points out that Press Herald managing editor Steve Greenlee worked at the Globe for 12 years. But it goes beyond that. Lisa DeSisto, who is chief executive officer of the Press Herald and its sister papers, was previously a high-ranking business-side executive at the Globe (and, before that, a colleague of mine at The Boston Phoenix).

The two papers also have the distinction of having been pursued by Boston-area businessman Aaron Kushner, who tried to buy the Globe in 2010 and nearly succeeded in buying the Press Herald in 2012. Kushner and a team of investors ended up purchasing the Orange County Register in Southern California later in 2012. They spent considerable resources in building up the Register and acquiring and launching other papers — only to tear it all down in short order when the hoped-for revenues failed to materialize. Today the Register is owned by the notorious hedge fund Alden Global Capital. (I tell the story of Kushner’s newspaper adventures in my book “The Return of the Moguls.”)

Today the Press Herald is owned by Reade Brower, a printer, who’s built a small chain of Maine newspapers and gets generally high marks for his stewardship. The Globe, of course, is owned by billionaires John and Linda Henry.

Twitter battle rages over ‘Moguls’; journo tells followers to ‘BUY THIS BOOK NOW’

“The Return of the Moguls” hasn’t been officially released yet (that will come on March 6), but it’s already generated a Twitter battle between the Southern California-based journalist Gustavo Arellano and Eric Spitz, who, along with Aaron Kushner, are former owners of the Orange County Register.

I interviewed Arellano, then the editor of the OC Weekly, and Spitz (and Kushner) about the Register, which under Kushner and Spitz’s leadership added about 150 newsroom jobs only to go bankrupt just three years after their investment group bought the paper. The Twitter action began earlier this afternoon:

What fun!

Arellano also offered an endorsement:

Yes. Please do.

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What will GateHouse Media do with the Boston Herald?

There is so much local media news breaking today that it’s hard to keep it all straight. Late this afternoon came the huge announcement that Boston Herald publisher Pat Purcell, who bought the tabloid from his mentor Rupert Murdoch in 1994, was taking the paper into bankruptcy with the intention of selling it to GateHouse Media.

I’ve posted the clip of us talking about the deal on “Beat the Press.” Here is the Herald’s coverage. And here is The Boston Globe’s. The Boston Business Journal has some interesting details as well, including the bankruptcy filing. I talked with Jenna Fisher of Patch about what’s next.

At this point, we all have far more questions than answers. A friend suggested something to me a little while ago that is worth pondering: Can we be sure that GateHouse will end up with the Herald? Once a business goes into bankruptcy, it’s up for grabs. As I note in my forthcoming book, “The Return of the Moguls,” the executives who were running California’s Orange County Register took that paper into bankruptcy several years ago with the goal of buying it themselves. They lost out, and today the Register is part of the Digital First Media empire.

Other questions: Although cuts have already been announced, will the diminished Herald be its old recognizable blend of local news, good photography and sports coverage, and feisty tabloidism? Or will it be something else entirely? Will GateHouse keep Herald Radio up and running? Will it honor its printing contract with the Globe, or will it move operations to a GateHouse facility? We’ll learn the answers to all these questions in the weeks and months to come.

Interestingly, for a few years Purcell owned around 100 community papers in Eastern Massachusetts in addition to the Herald, selling all but the Herald to GateHouse about 15 years ago. Now things have come full circle.

No one wants to see hard-working journalists lose their jobs. We all hope GateHouse will keep the pain to a minimum, and that the Herald will be with us for many years to come.

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Talking with Bob Schieffer about the future of news

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Recently I had the opportunity to record a podcast about my Shorenstein paper on the Washington Post under Jeff Bezos with CBS News legend Bob Schieffer and Andrew Schwartz of the Center for Strategic and International Studies. Our conversation was posted on Thursday.

Schieffer and I met last spring at the Harvard Kennedy School, where I was a Joan Shorenstein Fellow and he was the Walter Shorenstein Media and Democracy Fellow. Schieffer was a friendly, gregarious presence, and my fellow fellows and I enjoyed his company immensely.

My Shorenstein paper is part of a book project with a working title of The Return of the Moguls, which will be about the Post under Bezos, the Boston Globe under Red Sox principal owner John Henry, and the Orange County Register under entrepreneur Aaron Kushner, to be published by ForeEdge in 2017.

Schieffer and Schwartz’s podcast, “About the News,” offers regular updates about various media topics. It’s available at iTunes.

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Millionaires, billionaires, and the future of newspapers

tumblr_static_policycast_logoHard to believe, but my time as a Joan Shorenstein Fellow at Harvard’s Kennedy School will be ending soon. Recently I recorded an HKS PolicyCast podcast under the expert guidance of host Matt Cadwallader. We talked about my research regarding wealthy newspaper owners and whether the innovations they’ve introduced may show the way for others. I hope you’ll give it a listen.

As I’ve written before, I’m working on a book that will largely be about three such owners—Amazon’s Jeff Bezos, who bought the Washington Post in 2013; Red Sox principal owner John Henry, who announced he would purchase the Boston Globe just three days before Bezos made his move; and greeting-card executive Aaron Kushner, whose time as publisher of the Orange County Register ended in 2015, but whose print-centric approach made him perhaps the most closely watched newspaper owner of 2012-’13.

Bezos and the Post will be the subject of the paper I’m writing for Shorenstein, so—in case any of you folks at the Globe were wondering—I’ve suspended my reporting on the Globe for the time being. I’ll be back.

Rob Curley out, jobs eliminated at Orange County Register

Photo (cc) by Dan Kennedy
Photo (cc) by Dan Kennedy

Digital news pioneer Rob Curley is out as editor of the Orange County Register, whose acquisition by Digital First Media was completed earlier today. The story was broken by the Orange County Business Journal.

Gustavo Arellano, the editor of OC Weekly, adds that some 50 to 70 employees are losing their jobs at the Register and its sister paper, the Riverside Press-Enterprise. These are “mostly on the sales, circulation, and marketing side,” Arellano writes, a sign that Digital First—which also owns several other papers in Southern California—is consolidating its business operations.

A little more than a year ago I spent a good chunk of a day at the Register as part of my book project. Curley, who made his bones as an early digital guy at the Lawrence Journal-World a dozen years ago, followed by stops at the Washington Post and the Las Vegas Sun (among other places), allowed me to spend a considerable amount of time with him and answered all questions. However, it was completely off the record, so I can’t share with you anything I learned. I can tell you it wasn’t all that eventful.

The next day, Kushner—who had tried to purchase the Boston Globe and Maine’s Portland Press Herald before leading a group that bought the Register in 2012—stepped down a day before I was to interview him. Kushner’s emphasis on print, and his head-turning moves to hire staff and buy and launch newspapers (including a short-lived daily in Los Angeles), earned him national recognition. Unfortunately, a shortage of funds led him to dismantle what he had built in very short order.

Digital First bought the Register and the Press-Enterprise for $49.8 million after the US Department of Justice convinced a federal judge that a higher bid by Tribune Publishing, which owns the Los Angeles Times and the San Diego Union Tribune, should be rejected because it would reduce competition.

It struck a number of observers, including me, that the government was engaged in outdated thinking that no longer applied to the shrinking, money-losing newspaper business. Tribune has gone through numerous gyrations over the years, but the LA Times has remained an excellent newspaper. It almost certainly would have been a better steward of the Register and the Press-Enterprise than Digital First.

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The latest update on the Globe‘s home-delivery meltdown

Update, 5:05 p.m. Confirming a rumor I picked up earlier today, Globe tech columnist Hiawatha Bray reports on Facebook that “dozens” of Globe reporters, responding to the “fiasco” of the past week, will deliver the Sunday paper.

***

Today’s must-read post on The Boston Globe‘s ongoing home-delivery meltdown is by Adam Gaffin of Universal Hub. Among other things, he notes that when the Orange County Register switched to the Globe‘s new carrier, ACI Media Group, in 2014, mayhem ensued.

But I’m confused. According to the Times‘ story, the Register switched from the Los Angeles Times‘ service to ACI, based in Long Beach, California, after it fell behind on its payments to the Times. Yet when the Globe published a story on its own problems earlier this week, it identified ACI as the company that delivers the Los Angeles Times.

Googling ACI Media Group leads to dead ends and 404s (not a good sign). But I did find a cached press release from September 2010 in which ACI reported that it had at least some of the L.A. Times‘ home-delivery business:

American Circulation Innovations (ACI) is now delivering a weekly volume of 250,000 of the subscription-paid daily and Sunday Los Angeles Times. This represents a more than 100% increase of ACI’s delivery of the Los Angeles Times newspaper.

ACI’s Chief Executive, Keith Somers said: “We’ve been able to leverage our management team’s circulation background and our highly innovative and efficient delivery model to provide the Los Angeles Times with quality home delivery at reduced rates. We’re proud that our performance and service have earned increased business from such a valued and marquee partner.”

So the Orange County Register switched from the Los Angeles Times‘ home-delivery service to ACI Media Group, which also had at least some of the Times‘ business. And now the Globe is reporting that ACI has all of the Times‘ business. I guess.

The company’s new name appears to be the ACI Last Mile Network. And for what it’s worth, I haven’t been able to find any stories about problems with its service similar to what the Globe is going through. The Register‘s problems were essentially self-inflicted—though that may turn out to be the case with the Globe as well.

What I’ll be doing in the coming year

I thought I should say a few words about what I’m up to.

For the next year, I’ll be on sabbatical from Northeastern as I work on a book about how three business people who are passionate about newspapers are using their wealth to reinvent their papers and possibly to show the way for others. They are John Henry of The Boston Globe, Jeff Bezos of The Washington Post and Aaron Kushner of the Orange County Register. Kushner is no longer running the Register, but the print-centric orientation he took during his time at the helm has much to tell us.

My project actually became public two years ago when the Globe somehow got word. That item has proved useful in helping me to line up interviews. But only now am I embarking on the bulk of my reporting. I lost a year when I agreed to serve as interim director of Northeastern’s School of Journalism following the death of my friend and mentor Steve Burgard. Steve’s death was a difficult blow. In terms of the book, though, the delay may prove to be a good thing, as it seems to me that Henry’s and Bezos’ visions are still coming into focus.

I have a contract with University Press of New England and a year that should be (I hope) free of distractions. I’m excited to push ahead.