Tag: Stewart Bainum

Alden’s victory marks a dark day for newspapers — but it could lead to a brighter future

The Chicago Tribune Tower — no longer the home of its namesake newspaper, which is now falling into the hands of our worst newspaper owner. Photo (cc) 2013 by R Boed.

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 also remained uncertain well into Friday afternoon about 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.

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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.

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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.

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.

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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.

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.

Rich guys band together in a final push to stop Alden from buying Tribune Publishing

Photo (cc) 2009 by Thomas Hawk

Less than a week ago, efforts to keep Tribune Publishing out of the clutches of the hedge fund Alden Global Capital appeared to be faltering.

The hotelier Stewart Bainum, who originally got involved so that he could acquire Tribune’s Baltimore Sun and its affiliated papers in order to turn them over to a nonprofit, was seeking to outbid Alden’s $630 million offer. But according to Rick Edmonds of Poynter, the Alden deal was a simple cash offer that could be consummated quickly, which meant that Bainum was likely to lose out.

On Saturday, though, Marc Tracy of The New York Times reported that a Swiss billionaire named Hansjörg Wyss had teamed up with Bainum, with each man pledging to put up $100 million apiece.

Then, on Monday, we learned from Lukas I. Alpert of The Wall Street Journal that yet another wealthy patron, the technology investor Mason Slaine, had also agreed to put up $100 million. Slaine, who already owns a small chunk of Tribune, wants to acquire Tribune’s two Florida papers, the Orlando Sentinel and the South Florida Sun Sentinel of Fort Lauderdale.

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Also over the weekend, Gary Lutin, a Manhattan investment banker, revealed that he wants to buy The Morning Call of Allentown, Pennsylvania, telling the paper: “There are many encouraging examples of both large global news organizations as well as small community news organizations that survive and eventually prosper based on improving the quality of the news service.” Lutin’s interest is not dependent on the Bainum group’s success — he says he’ll attempt to cut a deal with whoever the eventual buyer turns out to be.

Meanwhile, Patrick Soon-Shiong, the possibly reluctant owner of the Los Angeles Times and The San Diego Union-Tribune, remains in a position to veto any deal with Alden, though Edmonds has speculated that Soon-Shiong would be happy to cash in.

“Hope is what Tribune staffers are feeling,” writes CNN media reporter Kerry Flynn, “as it looks more and more feasible that local ownership could be in their futures — instead of Alden.”

The Tribune saga has been years in the making as the chain — which currently consists of nine papers — has lurched from one ownership melodrama to another. There was the epic era of Sam Zell, the foul-mouthed Chicago real-estate magnate who hated newspapers, documented memorably by the late David Carr. There was the rudderless period when the company was known as tronc.

Now the struggle over Tribune may represent the last best chance to stop Alden from destroying what’s left of some of the most important papers in the country — among them the Chicago Tribune, New York’s Daily News and, closer to home, the Hartford Courant.

“Maybe I’m naive,” Wyss told the Times, “but the combination of giving enough money to a professional staff to do the right things and putting quite a bit of money into digital will eventually make it a very profitable newspaper.”

Wyss isn’t being naive at all. Not only have The New York Times and The Washington Post shown it can be done, but regional papers such as The Boston Globe, the Star Tribune of Minneapolis and The Seattle Times are all doing well under local ownership committed to the transition from print to digital and from a mostly advertising-based model to one mainly supported by reader revenue.

Journalism is too important to be left to the whims of unbridled capitalism. We shouldn’t be reduced to having to root for one group of rich guys over another. But that’s where we’re at. In that spirit, may Bainum, Wyss, Slaine and Lutin win.

Previous coverage.

A possible savior emerges for Tribune’s newspapers

Stewart Bainum. Photo via Wikimedia Commons.

It sounds too good to be true. Stewart Bainum, the hotel magnate (why are they always magnates?) who is leading the transition of The Baltimore Sun and its sister papers to nonprofit ownership, may make a bid to buy all of Tribune Publishing, according to The New York Times.

As you may recall, the hedge fund Alden Global Capital has a deal to buy Tribune, a move that would almost certainly lead to the gutting of the Chicago Tribune and the rest of the chain’s already-diminished newspapers, including, semi-locally, the Hartford Courant. As part of that deal, Alden would spin off the Sun to a nonprofit.

According to the Times’ Marc Tracy, though, Bainum and Alden have been unable to come to an agreement on the details of that transition — and Bainum may now put together a group of investors who would buy the entire chain. Tracy writes:

If Mr. Bainum manages to reach an agreement to buy Tribune, he would be likely to seek local owners for its other newspapers, which also include The Hartford Courant, The Orlando Sentinel and The South Florida Sun Sentinel, the people said.

“The people” is a reference to Tracy’s unnamed sources.

Who knows what will happen? But this is well worth keeping an eye on, as it could lead to a renaissance for some of our most important newspapers — just as it appeared that they were being led to the slaughterhouse.

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