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.
The public radio show “On the Media” offered a terrific special hour-long broadcast over the weekend — a deeply reported piece on the Capital Gazette in Annapolis, Maryland, where five journalists were killed in a mass shooting three years ago today.
The story follows the newsroom through the shock of the shooting and the newspaper’s halting recovery. Sadly, as the last part of the hour unfolds, we learn that the journalists overcame the worst horror imaginable only to be done in by their corporate owner, Tribune Publishing. In the closing minutes, things go from bad to worse, as the hedge fund Alden Global Capital purchases Tribune.
By the way, what “On the Media” ran was a compressed version of a two-hour series that was part of the NPR podcast “Embedded,” which had not been on my radar until now. Outstanding and important work.
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.
Alden Global Capital is wasting no time in taking a chainsaw to its newly acquired newspapers. NPR media reporter David Folkenflik tweeted a thread that contains some horrifying details about what the hedge fund has in store for Tribune Publishing:
$60MM of that debt carries a 13% rate – it was borrowed from Media News – Alden Global's other newspaper division.
h/t to @benyt for initial tweet about NYDNews & memo
Last year, Tribune Publishing employment fell by 30%, dropping from 4,114 employees at the end of 2019 to 2,865 employees at the end of 2020, according to the company’s annual reports. The company had a total of 896 newsroom employees across its eight markets entering this year.
Finally, the New York Post’s Keith Kelly writes that Los Angeles Times owner Patrick Soon-Shiong, who was in a better position than anyone to stop the sale of Tribune to Alden, is “taking a lot of heat” for not voting against it — or at least for not abstaining in a way that would have stopped the deal.
Kelly quotes an unnamed source who calls Soon-Shiong “second most despised man in newspapers today behind Heath Freeman,” Alden’s president. Nice quote. I wonder who said it?
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
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.
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.