New Owner Set for Chicago Tribune, Daily News and
The bid by Alden Global Capital, which
already owns about 200 local newspapers, had faced resistance from
Tribune staff and last-ditch competition.
The Chicago Tribune printing and distribution center in Chicago.
It is being sold to a hedge fund, along with The Baltimore Sun,
The New York Daily News and others.
Taylor Glascock for The New York Times.
May 21, 2021
Tribune Publishing, the owner of some of the largest metropolitan
newspapers in the United States, will be acquired by a hedge fund with a
reputation for slashing costs and cutting newsroom jobs, after shareholders
voted to approve the deal on Friday.
The sale of Tribune, whose titles include The Chicago Tribune,
The Baltimore Sun and The New York Daily News, to Alden Global Capital comes at
a time of crisis for local news. The coronavirus pandemic exacerbated the
headwinds facing small newspapers as
spending from advertisers collapsed. But even before the pandemic,
more than 2,000 American newspapers closed between 2004 and 2019 and about half
of the jobs in the industry were lost, according
to researchers at the University of North Carolina.
The losses have hollowed out local news coverage across the
country, and with growing
polarization and rampant disinformation, reliable coverage of
institutions like state houses and city councils is more important than ever.
The slump has crippled outlets that people rely on to know about everything from
school board decisions to local sports scores.
Alden, the second-largest newspaper owner in the country, will
gain control of nine daily newspapers, adding them to a stable of about 200
other publications. Alden says its intention is to ensure newsrooms can survive,
but its critics point to a record of slashing spending and cutting back on
reporting as it focuses on extracting profits for its shareholders.
“What we’ve seen over the last year is a reaffirmation of how
vitally important local news is and how much we depended on having a trustworthy
source of news and information,” said Penny Abernathy, a visiting professor at
Northwestern University’s journalism school. “But at the same time, we saw how
economically fragile the whole local news ecosystem is.”
After the sale to Alden was announced in February, journalists at
Tribune’s papers protested the deal and publicly pleaded for another buyer to
step in. Stewart
W. Bainum Jr., a Maryland hotel executive who had planned to buy The
Baltimore Sun from Alden, offered a glimmer of hope when he emerged with a
last-minute offer for the entire company. He was backed for a brief time by a Swiss
But the rival bid never fully came together, so the choice facing
Tribune’s shareholders was to approve or reject Alden’s offer, which valued the
company at roughly $630 million.
The company’s second-largest shareholder, Dr. Patrick Soon-Shiong,
abstained from voting, saying through a spokeswoman on Friday that he considered
his investment to be a “passive” one. Dr. Soon-Shiong, a billionaire who also
owns The Los Angeles Times, had been seen by Tribune employees who opposed the
sale as their last hope, because a “no” vote from him would have blocked the
“He should have taken a stand as a civic leader in journalism,”
said Gregory Pratt, the president of the Chicago Tribune Guild. “He had a
responsibility in my opinion to vote ‘no,’ but at the bare minimum he had a
responsibility to take a firm stance one way or the other instead of punt,”
Dr. Soon-Shiong’s decision not to vote caused some confusion over
the status of the deal. Approval required a two-thirds “yes” vote by investors
other than Alden, which owns 32 percent of Tribune, and the company’s shareholder
filings stated that an abstention would count as a vote against the
But Tribune counted the vote as a “yes,” because Dr. Soon-Shiong
did not check the “abstain” box on the ballot, a person with knowledge of the
vote said, asking not to be identified discussing private information.
Tribune said the deal received approval from 81 percent of
non-Alden shares and is expected to close by Tuesday.
The vote underscores the growing might of financial firms in a
consolidating media industry. Investors, seeing opportunities to buy distressed
assets at bargain prices, have swooped in over the past decade, with plans to
make money by drastically cutting costs, laying off workers, combining
operations and selling off real estate holdings.
In that time, Alden amassed a media empire through its MediaNews
Group, which owns newspapers including The Denver Post and The Boston Herald. In
August, the family-owned publisher McClatchy was
sold to the hedge fund Chatham Asset Management after a bankruptcy auction.
Gannett, the publisher of USA Today, was bought by New Media Investment Group,
the parent company of GateHouse Media, in 2019 with financing from the private
equity firm Apollo Global Management.
Alden first signaled its pursuit of Tribune when it announced in
November 2019 that it had bought a 32 percent stake in the company. Tribune,
whose other papers include the Hartford Courant, The South Florida Sun Sentinel
and The Virginian-Pilot, has struggled to grow its digital subscription business
and has cut costs and shed journalists in recent years. (It said in
its latest earnings release that it had 436,000 digital subscribers at the end
“The purchase of Tribune reaffirms our commitment to the
newspaper industry and our focus on getting publications to a place where they
can operate sustainably over the long term,” Heath Freeman, the president of
Alden, said in a statement Friday.
But Mr. Pratt of the Chicago Tribune said the company’s
journalists were concerned about Alden’s ownership because of the way it has
managed its newspapers. Alden steadily cut jobs at The
Denver Post by half in eight years.
“They dramatically cut the public service that we are able to
perform by reducing personnel dramatically for no reason other than greed,” Mr.
The hedge fund’s first priority is likely to be to consolidate
Tribune’s operations with those of its other newspapers, resulting in job losses
and cost savings, said Jim Friedlich, the chief executive of The Lenfest
Institute for Journalism, a journalism nonprofit that owns The Philadelphia
“Alden’s playbook is pretty straightforward: Buy low, cut
deeper,” said Mr. Friedlich, who served as an unpaid adviser to Mr. Bainum, the
hotel magnate. “There’s little reason to believe that Alden will approach full
ownership of Tribune any differently than they have their other news
in February to sell to Alden. At the time, Mr.
Bainum said that he would establish a nonprofit to buy The Baltimore
Sun and other Maryland newspapers from Alden once its purchase of Tribune went
through. But negotiations on the specifics of that purchase ran
aground, and Mr. Bainum instead made a bid for the whole company.
That offer valued Tribune at
about $680 million, and he was then joined by Hansjörg
Wyss, a Swiss billionaire who lives in Wyoming and had expressed an
interest in owning The Chicago Tribune. Mr. Bainum would have put up $100
million, with Mr. Wyss financing the rest.
But Mr. Wyss took himself out of the equation less than two weeks
later. Part of the reason for his decision, people with knowledge of the matter
said at the time, was the realization that his plans to transform the Chicago
newspaper into a competitive national daily would be near impossible to pull
Though Mr. Bainum sought another partner, he was never able to
make a viable offer for the company. And with a deal for The Baltimore Sun and
other Maryland papers also scuttled, he is left trying to find a new way to
enter the news business. Mr. Bainum said on Friday that he remained focused on
Baltimore, was evaluating different options for supporting local nonprofit
newsrooms and would make an announcement in the coming days.
“While our effort to acquire the Tribune and its local newspapers
has fallen short, the journey reaffirmed my belief that a better model for local
news is both possible and necessary,” Mr. Bainum said in a statement.
Ms. Abernathy said there were reasons to be optimistic about the
future of local news, including a growing awareness outside of the media
industry of its current state and its important civic role.
“Given the interest that has been shown by various local
billionaires and entrepreneurs in purchasing the various papers and bringing
them into local ownership, we may see the start of a new trend,” she said.
Robertson is a media reporter. She previously worked as an editor and reporter
at Bloomberg and News Corporation Australia. Email:
A version of
this article appears in print on May
Section B, Page 1 of the New York edition with the headline: Tribune
Shareholders Vote For Sale to a Hedge Fund.
© 2021 The
New York Times Company