This is a story about a group of billionaires reshaping the media landscape and public discourse in the U.S. Shockingly, it’s not about Zuckerberg.
This week shareholders of Tribune Media will vote on a takeover attempt by Alden Capital, a job-slashing, cost-cutting hedge fund that is poised to own the Chicago Tribune, New York Daily News, and Orlando Sentinel, among others.
Dracula With Pink Slips
Alden, which Vanity Fair dubbed “the hedge fund vampire that bleeds newspaper dry,” announced a deal in February to acquire Tribune for $17.25 per share, or $635 million.
Journalists and lovers of quality, local journalism were rightly petrified. The fund, led by 40-year-old Heath Freeman, isn’t just known for cutting costs, it’s known for cutting them to the bone:
- In 2018, the Denver Post newsroom posted a cry for help on their own website, as Alden laid off staff and its ranks shrunk to below 100 from 250 just years before. Last year, the Post was hit by another round of layoffs.
- In Northern California, Alden cut the editorial staff at 16 regional newspapers from 1,000 to 150.
The Upshot: The Tribune deal would put Alden, which already owns more than 200 publications, in charge of nearly 18% of the U.S daily newspaper circulation.
Critics say the cost to local journalism isn’t worth the price. “When a mine is tapped out, they’ll start pulling out the pillars of coal they left behind to hold the roof up,” said Terry Orme, the former publisher of the Salt Lake Tribune under Alden. “They’ll get that last bit of coal out, but then the roof collapses.”
After Alden announced the deal, several wealthy businessmen attempted to intervene in the spirit of protecting journalism. Hotelier Stewart Bainum was preparing a competing offer, but backed out last month after his business partner took a look at Tribune’s books. Financial executive Mason Slaine, who owns 3% of Tribune, has voted against the deal but analysts say his stake is too small to matter.
The one remaining obstacle is pharma billionaire Patrick Soon-Shiong, who holds 24% of Tribune stock. He told Bloomberg he hasn’t decided how he will vote (but he stands to profit from a sale).
Pretty Clear: There’s little question what those at Tribune papers think. The Daily News recently published its own desperate headline, begging someone else to “Please buy this newspaper.”