Hedge Fund’s Run at Tribune Publishing ends With
a New Board Seat
Journalists have been wary of Alden
Global Capital, which is known for gutting newsrooms to eke out
profits from struggling publications.
The Chicago Tribune Freedom Center, where
the newspaper and others are printed. The newspaper’s parent
company, Tribune Publishing, has been in negotiations with a
shareholder, the hedge fund Alden Global Capital.Credit.
July 2, 2020
Alden Global Capital seemed in position this week to take control
Publishing, a move that would have enabled the New York hedge fund to
merge the parent company of The Chicago Tribune and The Baltimore Sun with
MediaNews Group, an Alden-owned newspaper chain, to create a new media giant.
Instead, after negotiations this week, Alden settled, for now, on
something less ambitious: a Tribune Publishing board seat for one of its
founders, Randall D. Smith, a onetime Bear Stearns partner who runs Alden with
As part of the deal that gives the investment firm more say in
the company, Alden and Tribune Publishing extended a so-called standstill
agreement, struck last year, that could prevent Alden from pursuing ownership of
the Tribune chain for up to another year.
Alden’s designs on Tribune Publishing, a publicly traded company
that owns nearly a dozen prominent metro dailies across the country, became
clear in November, when it revealed that it had taken a 32-percent stake in the
chain. That news led to an outcry
from Tribune Publishing reporters, many of whom have denounced the
hedge fund’s habit of slashing newsroom costs at its MediaNews Group papers.
At the close of this week’s negotiations, Alden agreed not to
continue its pursuit until after the Tribune Publishing’s next annual
shareholder meeting, which is scheduled to take place no later than June 15,
2021, according to a public filing Thursday.
The standstill agreement would no longer apply if some other
entity acquired as much as 30 percent of Tribune Publishing or made an offer to
buy the company, according to a public filing. If that were to happen, Alden
would be free to pursue a deal for Tribune Publishing.
“Tribune Publishing will continue to focus on our long-term
strategy to drive digital growth and invest in high-quality content while
reducing legacy costs,” Philip G. Franklin, the chairman of Tribune’s board and
not an Alden member, said in a statement.
Mr. Smith is the third executive from Alden or affiliated
companies to join the Tribune Publishing board, which grew to seven seats, from
six. The other Alden representatives are Dana Goldsmith Needleman and
Few newspapers have been immune to cost cuts since readers
started getting their news from digital devices rather than printed pages. In
that time, Alden has been aggressive in laying off newsroom employees in an
effort to wring profits out of MediaNews Group, which operates roughly 200
Two years ago, journalists at The
Denver Post, a MediaNews Group paper, blasted Alden in a special
opinion section. “If Alden isn’t willing to do good journalism here, it should
sell The Post to owners who will,” The Post's editorial board wrote in the lead editorial.
Journalists at Tribune Publishing papers believed they saw fresh
evidence of Alden’s cut-to-the-bone style when the company offered buyouts in
January. Then, in February, there was turnover: Terry Jimenez, the Tribune
Publishing chief financial officer, replaced Timothy P. Knight as the company’s
Weeks later, Mr. Jimenez announced a change in leadership at The
Chicago Tribune: Bruce Dold, the publisher and editor in chief, was
replaced by Colin McMahon, who had been Tribune Publishing’s chief content
officer. Mr. Dold, a winner of a Pulitzer Prize, had worked at the paper for 42
The coronavirus pandemic has hit the newspaper industry with a
new challenge, now that struggling or shuttered businesses have reduced how much
they spend on advertising. In response, Tribune Publishing imposed cuts,
including three weeks of furloughs for some employees and permanent pay cuts for
After Alden became a significant part of the company at the end
of last year, the NewsGuild union teamed with several Baltimore-area benefactors
to push for local ownership of The Sun. Matthew D. Gallagher, the chief
executive of the Goldseker Foundation in Baltimore, said his group had been “in
contact” with Tribune Publishing, but he declined to comment further.
Journalists have also sought new ownership for other Tribune
Publishing papers. Among those making the rounds were a pair of Chicago Tribune
investigative reporters, who lobbied wealthy
Chicagoans in an effort to keep Alden from taking control.
Those pushing for Tribune Publishing to sell its papers to local
owners have found an ally in Mason Slaine, an investor who bought a roughly 7
percent stake of the company this spring.
“The newspapers should really be owned by the local communities,”
Mr. Slaine, a former chief executive of Thomson Financial, said in an interview
Mr. Slaine, who lives in Boca Raton, Fla., added that he had some
interest in buying The Sun Sentinel of South Florida, a Tribune Publishing
In 2018, Dr. Patrick Soon-Shiong, a billionaire medical
entrepreneur, bought The Los Angeles Times, The San Diego Union-Tribune and
other California papers from Tribune Publishing, then known as Tronc, for $500
million. Dr. Soon-Shiong is the second-largest shareholder in Tribune
Publishing, with about a quarter of its shares.
Wall Street ownership of
newspapers has become common, and Alden helped drive that trend since the Great
Recession, when it started grabbing stakes in distressed media companies.
Last year, in a deal financed by the private equity firm Apollo
Global Management, the newspaper chain Gannett was acquired by the parent
company of GateHouse Media to form a giant that publishes more than 250 dailies.
The resulting company, called Gannett, is controlled by another private equity
fund, Fortress Investment Group, which is owned by the Japanese conglomerate
McClatchy, another chain, is likely to emerge from the bankruptcy
it declared this year into the hands of its largest bondholder, the hedge fund
Chatham Asset Management.
Alden itself recently disclosed a significant stake in the
newspaper chain Lee Enterprises.
Tribune Publishing fell into bankruptcy a decade ago, shortly
after it was bought by the Chicago billionaire Sam Zell. In 2016, the private
equity firm Merrick Ventures became the largest shareholder in the company. Its
chairman, Michael W. Ferro Jr., oversaw extensive job cuts before stepping
down in 2018, after two women accused him of unwanted sexual
Alden then made its move, acquiring approximately nine million
Tribune Publishing shares held by Mr. Ferro and his company.
covers print and digital media. He previously covered college sports.
A version of
this article appears in print on July 4, 2020, Section B, Page 1 of the New York
edition with the headline: Hedge Fund Delays Effort To Buy Tribune.
© 2020 The
New York Times Company