Big news out of Houston, where several major philanthropies have announced they intend to raise $20 million to start a nonprofit news project — just the latest major metropolitan area to embrace nonprofit journalism.
What makes it a bit unusual is that the Houston Chronicle, the legacy daily, is owned by Hearst, generally regarded as one of the better newspapers chains. Of course, all corporate chains are problematic, but Houston is not like Baltimore, where hotel magnate Stewart Bainum is launching the nonprofit The Baltimore Banner after losing out to the hedge fund Alden Global Capital in his bid to buy The Baltimore Sun.
Local news is a public service — one that’s been in sharp decline. This project demonstrates that local philanthropies can, and need to, play a transformative role in rebuilding and sustaining independent, original reporting in service of communities.
Here’s an excerpt from the press release:
With an anticipated launch in late 2022 or early 2023 on multiple platforms, the new nonprofit news organization will elevate the voices of Houstonians and address the needs of the community as identified in the American Journalism Project’s extensive research. Its wide-ranging coverage will be available for free to readers as well as other news organizations.
I wish them well, of course. Still, it’s hard not to wonder if the money could go to better use elsewhere. Greater Houston residents already get first-rate coverage of state politics and public policy through The Texas Tribune, which is also a nonprofit, and the Chronicle is presumably doing a better job than your typical Alden or Gannett paper.
Previously published at GBH News. It’s rather late in the game to ask whether hedge funds can be stopped from buying up every last one of our local newspapers. After all, about half of us are already stuck with a paper that is owned by, or is in debt to, the likes of Alden Global Capital (Tribune Publishing and MediaNews Group), Apollo Global Management (Gannett) and Chatham Asset Management (McClatchy).
Still, with Alden having now set its sights on Lee Enterprises, a chain that owns 77 daily newspapers in 26 states, we need to take steps aimed at preventing what is already a debacle from devolving into a catastrophe.
So what can be done? Steven Waldman, the co-founder of Report for America, which places young journalists in newsrooms, has some ideas. At the top of his list: redefining antitrust law.
“In general, antitrust law for the past three or four decades has focused on whether mergers would hurt consumers by raising prices or reducing competition,” Waldman wrote recently for the Washington Monthly. “But before that, antitrust regulators looked at mergers more broadly, including whether they would hurt communities. And that’s what needs to happen here.”
Waldman would also provide tax incentives for nonprofit organizations seeking to buy newspapers as well as tax credits to make it easier for news organizations to hire or retain journalists. That latter provision is part of the Build Back Better legislation, whose uncertain fate rests in the hands of Sens. Joe Manchin and Kyrsten Sinema.
“This will strengthen local news organizations of all shapes and sizes, making them less vulnerable to vultures,” Waldman argued. “The legislation could be a powerful antidote to the sickness spreading within local communities.” Trouble is, the tax credits would benefit the Aldens and the Gannetts just as much as they would the independently owned news organizations that are struggling for survival. Still, it seems like a step worth trying.
The problem with hedge funds owning newspapers is that such funds exist solely for the purpose of enriching their investors. Newspapers, of course, aren’t exactly lucrative. But they still have advertising and circulation revenues, even if they are much smaller than they were, say, 20 or 30 years ago. Cut expenses to the bone by laying off reporters and selling real estate, and you can squeeze out profits for the enrichment of the owners.
Alden is notorious for being the most avaricious of the bunch. Which is why shock waves ripped throughout the journalistic community last week when Rick Edmonds of the Poynter Institute reported that Alden — just months after feasting on Tribune’s nine major-market dailies — was making a bid for Lee, whose papers include the St. Louis Post-Dispatch, The Buffalo News and the Arizona Daily Star. (Julie Reynolds, an investigative reporter who has been dogging Alden for years, recently spoke about the hedge fund with Ellen Clegg and me as part of our podcast, “What Works: The Future of Local News,” at Northeastern University.)
Lee’s papers also include the Omaha World-Herald, and therein lies a sad story. The World-Herald was at one time the flagship of hometown boy Warren Buffett’s newspaper chain, which he began assembling in 2012. But despite Buffett’s self-proclaimed love for newspapers, he failed to invest in their future, cutting them repeatedly and eventually selling out to Lee. Now they face the possibility of a much worse fate.
Or not. Several days after Alden offered to buy Lee in a deal valued at $141 million, the Lee board of directors adopted a poison pill provison. As reported by Benjamin Mullin in The Wall Street Journal, Alden — which currently holds about 6% of Lee stock — would be forbidden for the next year from increasing its share above 10%. If nothing else, the move provides some time for other buyers to emerge. Perhaps the chain will be broken up, with some of Lee’s papers being acquired by local owners.
As Waldman suggests, there is nothing inevitable about local news being destroyed at the hands of venture capital. About two and a half years ago, I wrote about The Salt Lake Tribune, acquired from Alden by local interests and converted into a nonprofit news organization. Now, according to Lauren Gustus, the Tribune’s executive editor, the paper is adding staff and resources. “We celebrate 150 years this year and we are healthy,” she wrote in a message to readers recently. “We are sustainable in 2021, and we have no plans to return to a previously precarious position.”
Alden’s acquisition of Tribune Publishing (not The Salt Lake Tribune; I realize there are a lot of Tribunes to keep track of here) was an avoidable tragedy, made possible by a board that placed greed above the public interest. Since closing the deal, the hedge fund has been hacking away at Tribune newspapers that were already much diminished, including the Chicago Tribune, New York’s Daily News and the Hartford Courant.
Yet some good may come out of it, too: Stewart Bainum, a hotel magnate who had competed with Alden for Tribune, is starting a well-funded nonprofit news site, The Baltimore Banner, that will compete with Tribune’s Baltimore Sun. Maybe that will lead to similar efforts in other Tribune cities.
Meanwhile, Lee Enterprises’ newspapers are safe, at least for now. What will happen a year from now is anybody’s guess. But as long as the vulture can be kept outside the cave, there is hope for the millions of readers who depend on a Lee newspaper to stay informed about what’s happening in their community.
I just skimmed the transcript of Kara Swisher’s interview with Los Angeles Times owner Patrick Soon-Shiong. It gets off to a slow start — but eventually she lets him have it in the chops over his pathetic rationalizations for not stopping the hedge fund Alden Global Capital from buying Tribune Publishing earlier this year.
The short version, for those who aren’t sure what I’m talking about: Soon-Shiong, a billionaire surgeon and medical entrepreneur, owned 24% of Tribune, which publishes nine major-market daily newspapers. He could have blocked Alden by voting no or by voting to abstain, thus giving Baltimore hotel magnate Stewart Bainum more time to put a deal together — or to see if another buyer might emerge.
Instead, Soon-Shiong declined to vote at all, which allowed the deal to go through. Here’s the heart of what Swisher told him:
So essentially you’re saying I couldn’t save them. And I’m — I don’t quite know what to say. There’s some point where you do make a stand and say, you can’t do this. And especially with Alden Global Capital having a reputation it does, you might have stood up for it. You might have said no. But you felt the current owners weren’t going to really do anything with your money. As you said, they had an agenda. It seems like you have a theory of their agenda. But they weren’t going to make it better. And so any port in the storm, is that what you’re saying?
Soon-Shiong’s hedging is pretty much in line with his recent interview with Brian Stelter of CNN. But this response screams out:
Well, it’s a little more than that, right? I think there should be enough civic responsibility in Chicago, enough civic responsibility in Florida, civic responsibility wherever these — Baltimore. And obviously, as you knew, there were certain billionaires and multimillionaires. So to be fair, it should be really the responsibility of people living in their community. I live in California. So I can’t personally be responsible for Florida or Baltimore and Chicago.
Baltimore? Baltimore? Is the good doctor kidding? Bainum originally had an agreement to acquire The Baltimore Sun from Alden after Tribune was sold and then donate the Sun to a nonprofit. After he concluded that Alden was jerking him around, he tried to put together a group that would buy the entire chain. (Bainum is now launching a nonprofit news project in Baltimore.)
Look, it’s great that Soon-Shiong seemed to be committed to the Times and his other paper, The San Diego Union-Tribune. But if you look up the word “disingenuous” in the dictionary, you just might find his photo.
Among the worst outcomes of Stewart Bainum’s failed bid to purchase Tribune Publishing is that he lost out on an earlier deal to buy The Baltimore Sun and donate it to a nonprofit organization.
The hedge fund Alden Global Capital had originally agreed to spin off the Sun to Bainum after buying Tribune’s nine major-market dailies. That deal fell through when Bainum, a Baltimore hotel magnate, balked at Alden’s terms and tried to buy the entire chain.
So it’s very good news that Bainum appears to be moving ahead with a nonprofit venture that would compete with the Sun. Rick Edmonds of Poynter reported earlier this week that Bainum is advertising for a chief product officer who’ll work for a “well-funded startup” aimed at becoming “a new paradigm for digital first, cross-channel local media.”
The project will include the web, mobile, terrestrial and satellite radio and video, both on television and online, according to the ad, which adds that the “vision is to be the leading provider of news and lifestyle content in the Baltimore area.”
Bainum was originally willing to pay $65 million for the Sun. Assuming that money is still on the table, this should be a well-funded regional news product. Bloomberg and the Lenfest Institute are involved, too, though Edmonds suggests their role will be minimal.
One aspect I find interesting is the cross-platform nature of the project. The biggest challenge facing online-only media is getting the word out that they exist. As a former newspaper executive once told me, the problem with dumping the print edition in favor of digital is that print is essentially a billboard for digital. If print goes away, you disappear to non-subscribers. Bainum might avoid that problem by moving into radio and television as well as digital.
I also wonder whether there’s an underlying strategy to wrest the Sun away from Alden. Given the way the hedge fund is already decimating its holdings, which include the Chicago Tribune, New York’s Daily News and the Hartford Courant, there is little doubt that the Bainum project will be a better, more comprehensive news organization than the Sun on the day that it debuts.
If the Sun’s audience and advertisers (yes, nonprofits can accept ads) move en masse to Bainum’s venture, Alden might prove willing to walk away.
From time to time I’ve taken note of rare instances when Gannett has sold some of its 1,000 or so papers to local ownership. In Massachusetts, for example, The Inquirer & Mirror of Nantucket was acquired last fall by a group headed by the editor and a local businessman.
Kristen Hare of Poynter asked Gannett for some numbers, it turns out that the chain has sold 24 papers to community interests. (Be sure not to miss the correction. As you’ll see, Gannett can’t even keep track of how many papers it owns.)
Not that there’s any benevolent motive at work here. Gannett is going to do what’s best for its bottom line, and a few isolated weeklies don’t fit with its strategy of regional groups, dailies and stories shared across papers regardless of whether they have any local interest.
Just recently, Gannett shut down two weeklies west of Boston — the Marlborough Enterprise and the Hudson Sun. Maybe there weren’t any local buyers available. But those towns are also covered by Gannett’s MetroWest Daily News, so there was an incentive not to empower any possible competitors.
Writing for the Local News Initiative at Northwestern University, Mark Jacob speculates that the hedge fund Alden Global Initiative might sell off some of the nine major-market dailies it acquired when it gobbled up Tribune Publishing earlier this year. I suppose anything is possible, but that seemed to fly out the window when Baltimore hotel magnate Stewart Bainum’s efforts to buy Tribune fell short. Bainum planned to break up the chain, starting with The Baltimore Sun, which he wanted to donate to a nonprofit. In the end, though, Alden’s offer prevailed, even though it was loaded with undisclosed debt.
Jacob also profiles The Berkshire Eagle of Pittsfield, a rare instance of a newspaper that Alden was willing to sell to local interests, and The New Bedford Light, launched despite Gannett’s refusal to sell The Standard-Times.
And then there is this odd observation by Jacob:
In some ways, large chains can be beneficial for local news consumers. They often bring website expertise, technical support and consistent business practices. And they may have a greater ability to recruit talent.
No. Some chains are better than others, but all of them are dedicated to the proposition that newspapers exist mainly so that the owners can squeeze out profits that could otherwise be invested in news and technology. Even in terms of digital publishing, I have rarely encountered an independent news website that is as clunky and intrusive as a typical chain site.
Billionaire Los Angeles Times owner Patrick Soon-Shiong evaded the question when CNN’s Brian Stelter asked him on the new “Reliable Sources” podcast why he didn’t intervene to prevent Alden Global Media from acquiring Tribune Publishing.
Here’s the exchange:
Stelter: Patrick, there are people who want to know why, with the Alden deal, you didn’t step in. This is the deal where Tribune was being taken over by the hedge fund Alden Global Capital. You are the biggest outside shareholder. You could have stepped in. There’s questions about why you decided to abstain, why you decided not to stop that from happening. Can you share with us why?
Soon-Shiong: Well, look, you know, I was a passive shareholder, and it was really important for the board to do what it has to do with regard to the rest of the Tribune holdings. I’ve got my hands full and frankly, really committed to the LA Times and San Diego Union-Tribune.
A quick recap: Alden, the worst newspaper owner on the planet, paid $633 million last month to boost its share of Tribune’s nine major-market dailies from 32% to 100%. Soon-Shiong, who held 25% of Tribune’s shares, could have just said no and given Baltimore hotel magnate and philanthropist Stewart Bainum more time to pull together his own deal.
Instead, Soon-Shiong abstained, and he did it in such a way that the deal was allowed to go through. That is, if he had formally abstained, the sale would have been stopped.
And now Alden is decimating Tribune’s newspapers, just as it has with its 100-paper MediaNews Group chain.
Could Alden Global Capital’s acquisition of Tribune Publishing be headed for a do-over? Julie Reynolds, who’s been reporting on the hedge fund’s evisceration of newspapers for years, has written a fascinating story for the Nieman Journalism Lab suggesting that the $633 million deal may have been illegal.
Alden, which already owned 32% of Tribune’s papers, pledged to pay $375 million in cash in order to bring its share up to 100%. But Reynolds reports that Alden didn’t actually have the cash, a fact that may have been known only to the three members of Tribune’s board who were affiliated with the hedge fund.
As soon as the transaction was consummated, Alden forced the papers to borrow about $300 million. That included $60 million from Alden’s other newspaper chain, MediaNews Group, at an eye-popping interest rate of 13%. As everyone predicted, Alden has gone on a cost-cutting rampage, offering buyouts throughout the chain.
Nieman Foundation curator Ann Marie Lipinski, a former editor of Tribune’s largest paper, the Chicago Tribune, tweeted, “The scale of talent leaving the Chicago Tribune is staggering.”
The scale of talent leaving the Chicago Tribune is staggering. Combined with January buyouts, a hedge fund’s takeover is driving out irreplaceable experience, Pulitzer winners among them. Incalculable loss for Chicago. If you live in a city with a local paper, take care of it. https://t.co/C47durRnbY
Reynolds also reports that the full Tribune board may have been left in the dark about a private meeting that Tribune board member and Alden founder Randall Smith had with Baltimore hotel magnate Stewart Bainum last year.
You may recall that Bainum had initially worked out an agreement under which Alden would buy Tribune’s nine major-market dailies and then sell one of them, The Baltimore Sun, to Bainum, who planned to donate it to a nonprofit organization. After Bainum concluded that Alden was trying to gouge him, he tried to put together a bid for the entire chain. Most if not all of the papers would have been spun off to local buyers. But he was never able to put together a firm offer, and the board went with Alden instead. Alden is keeping all nine papers, including the Sun.
As Reynolds notes, the Tribune board spurned Bainum’s higher offer because the financing was not in place — and ignored the reality that Alden’s wasn’t in place, either. She writes:
Given the healthy profits Tribune has generated over the last several quarters, the cuts are there for just one reason: to achieve higher margins for Alden. Randall Smith will get richer while communities served by Tribune are starved of the information they need.
If Reynolds is correct in asserting that laws were broken in order to pave the way for Alden’s acquisition of Tribune, then the punishment ought to be more than a fine and a slap on the wrist. The sale should be voided and the Tribune board should be forced to vote again.
Maybe this time Patrick Soon-Shiong, the billionaire owner of the Los Angeles Times, can be persuaded to stop Alden. As a 25% owner of Tribune before the sale, Soon-Shiong could have said no. Instead, he abstained, and did it in a manner that allowed the transaction to go through.
It was, in a sense, the perfect ending to the disastrous $630 million sale of Tribune Publishing to the hedge fund Alden Global Capital. After Tribune’s board voted earlier today to turn over its nine major-market dailies to the worst newspaper owner in the country, it wasn’t entirely clear that the vote was valid. And I’m guessing that the Newspaper Guild, which has been fighting the sale, will file a challenge. Elahe Izadi and Sarah Ellison of The Washington Post explain:
But participants alsoremained uncertain well into Friday afternoonabout the potential impact of Patrick Soon-Shiong’s surprise announcement, made via a spokeswoman, that he “abstained” from the vote. The California biotech billionaire owns the Los Angeles Times — which is unaffected by the sale — and about one-quarter of Tribune shares, meaning he had enough votes to torpedo the takeover.
According to Tribune Publishing proxy filed on April 20 with the Securities and Exchange Commission, an “abstain” vote would be counted as “against” the merger. Yet it appears that Soon-Shiong ultimately did not cast his ballots in a way that would have stopped the Alden sale. Unnamed Tribune Publishing officials told the Chicago Tribune that the proxy ballots registered to Soon-Shiong were submitted without the “abstain” box checked, and that his votes were counted as “yes” for the merger.
Had he not voted at all, his silence would have been recorded as a vote “against” the merger. But ballot submitted without any boxes checked at all were understood as endorsing the board’s recommendation to approve the merger.
David Folkenflik of NPR has a comprehensive account of what went down today and what it means for the future.
There are two villains here in the looming destruction of some of our most important newspapers, including the Chicago Tribune, The Baltimore Sun and, closer to home, the Hartford Courant. One is Soon-Shiong. I realize he has his hands full with the LA Times, and I’m glad that he appears to be recommitted to that paper after rumors circulated earlier this year that he was looking to sell. But all he had to do today was vote “no,” buying more time for another bidder to emerge. Instead, Soon-Shiong will walk away with $150 million.
The other villain is a Swiss billionaire named Hansjörg Wyss. At one point, Baltimore hotel magnate Stewart Bainum put together a $680 million bid that was largely aimed at breaking up the chain and finding local buyers. Wyss wanted the Chicago Tribune — but reportedly decided against it once he learned that its finances were in worse shape than he’d been led to believe. He also reportedly lost interest after his advisers convinced him that, no, the Trib couldn’t be transformed into a national paper in league with The New York Times or the Post. With a net worth of $6.4 billion, though, Wyss easily could have sucked it up rather than walking away.
I’m not going to single out mega-billionaire Jeff Bezos as a villain, even though I recently argued that he should add Tribune to his ownership of the Post. It would have been nice, but there was never a hint that he had any interest.
And here’s a really terrible wrinkle. Earlier this year, Alden had agreed to buy Tribune and then sell The Baltimore Sun to Bainum, who in turn planned to donate it to a nonprofit. Bainum decided to try to buy the entire chain after concluding that Alden was trying to chisel him on the terms of the deal. Now Alden will keep all nine Tribune metros plus some pretty vital smaller papers, such as the Capital Gazette of Annapolis, Maryland.
Alden will soon control two newspaper chains. In addition to Tribune, Alden owns MediaNews Group (also known as Digital First Media), whose 100 or so papers include The Denver Post, the Orange County Register in Southern California and, in Massachusetts, The Sun of Lowell, the Sentinel & Enterprise of Fitchburg and the Boston Herald. Its papers are mere shadows of their former selves, barely able to cover the communities they purportedly serve.
If there’s a bright spot — and there is — it’s that entrepreneurial journalists move in where there is market failure. Former Denver Post journalists are now operating The Colorado Sun, a digital operation that recently acquired a chain of 24 regional newspapers around Denver. In Northern California, two former Alden journalists are now running a news co-op called The Mendocino Voice. And in Baltimore, Bainum says he’s going to investigate launching a nonprofit alternative to the Sun.
This may be the darkest day in the history of American newspapers. My hope is that, five years from now, we’ll look back and see that something good came out of it.
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.
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?
NEWS ON TRIBUNE SALE: medical device billionaire Hansjorg Wyss drops out of bidding for TribPub after reviewing finances of Chicago Tribune; hotel magnate Stewart Bainum Jr “more committed than ever” to make bid for whole chain exceeding offer from hedge fund Alden Global/MORE