Alden Global Capital bids for full ownership of Tribune Publishing
Alden Global Capital, a hedge fund known for cutting journalists at local papers to maximize profits, sent a letter to Tribune Publishing Company on Thursday asking to buy out the newspaper publisher in its entirety. The group currently owns 32% of the company.
Why it matters: Given Alden's history, a takeover is expected to result in a restructuring of the company that could result in more local news jobs being cut.
Details: In a filing with the SEC, Alden said it's willing to purchase Tribune at a price per share equal to $14.25. That offer values Tribune at about $520.6 million, per the New York Times.
- In recent months, Alden has increased its footprint at the company. Over the summer, the Wall Street Journal reported that the hedge fund brokered a deal with Tribune to award Alden co-founder Randall Smith a third seat on Tribune's seven-person board.
- In return, Alden agreed to extend a deal that prevented the hedge fund from increasing its stake in the company, unless there was interest from an outside bidder, until 2021.
- Journalists at newsrooms owned by Tribune have been bracing for this moment. Buyouts were offered to Chicago Tribune and Orlando Sentinel journalists in early January of this year, following Alden's increased stake in Tribune in 2019.
Tribune has been trying to offload assets to weather the financial headwinds from the pandemic and the broader collapse of the local news industry.
- According to a regulatory filing by Tribune this summer, the company has terminated eight leases since March and hasn’t made rent payments at many of its other properties since then.
- Earlier this year, it announced that it had permanently closed its headquarters in Manhattan for the storied New York Daily News tabloid.
- Tribune also closed the newsroom of the Capital Gazette in Annapolis, Maryland, which was vaulted into the national spotlight in 2018 when five people were killed in a mass shooting at its offices.
The big picture: As Axios has previously reported, cuts to big-city papers are happening at the same time that hedge funds and private equity firms have been taking greater ownership in newspapers, absorbing entities in the hopes of finding synergies and making some cash.
- The pandemic has made the situation more dire, causing local newsrooms to take drastic measures to stay afloat, including by vacating historic newsrooms or selling printing presses.
- While private equity firms don't have a particularly great track record in the legacy media space, many have been trying to take over local chains to try to quickly juice profits out of the entities before possibly offloading them.
- In July, Chatham Asset Management, a New Jersey-based hedge fund, won the once family-owned newspaper chain McClatchy in a bankruptcy auction.
Between the lines: For Alden, this is the latest in a long string of local news investments not only in newspapers, but also in local television and radio stations.
- Alden already mostly owns hundreds of papers through its majority ownership of MNG (MediaNews Group) Enterprises, known commonly as Digital First Media.