(CN) — A hedge fund that controls one-third of Tribune Publishing’s shares has offered to buy out the media conglomerate’s remaining shares and take total control of its operations, making its intentions official with a Securities and Exchange Commission filing released Thursday.
Alden Global Capital, current owner of 31.6% of Tribune shares, sent a letter to Tribune on Dec. 14 offering $14.25 per share for the Chicago-based company’s remaining stock, calculating the publisher’s total value at $520.6 million. The hedge fund says it has not received feedback on what it termed a “preliminary inquiry.”
Alden in recent years has developed a growing portfolio of media companies and newspapers, putting it in the crosshairs of scathing criticism from journalists and others in the media industry wary of the company’s track record of acquiring newspapers only to slash their budgets, shutter physical newsrooms and put reporters out of work.
Buying out Tribune would add the Chicago Tribune, the New York Daily News and the Baltimore Sun to its roster of prominent metropolitan dailies, among others.
It’s no secret that the newspaper industry at large has grappled with grim financial troubles for years in the internet era, causing the shutdown of scores of local newspapers nationwide as the woefully cash-strapped industry continues its paradigm shift toward digital content and distribution.
According to a study released by Pew Research Center in April, U.S. newsroom employment dropped 23% between 2008 and 2019, going from around 114,000 employees—including reporters, editors and photographers—to around 88,000. The hemorrhaging is worst at newspapers, according to Pew, which dropped more than half of their newsroom employees in the same timespan, plummeting roughly from 71,000 to 35,000.
The Covid-19 pandemic, a scourge to countless industries in 2020, has hit newspapers hard as well. Chatham Asset Management, a New Jersey-based hedge fund that owns the National Enquirer, announced in July its deal to acquire McClatchy, the second largest newspaper publisher in the country. One month later, the New York Daily News, a prominent tabloid run by Tribune since 2017, permanently closed its Manhattan newsroom in tandem with at least four Tribune-owned local dailies including The Morning Call, a more than 100-year-old paper out of Allentown, Pennsylvania.
In 2019, Gannett—a Virginia-based mass media company and owner of USA Today, the Milwaukee Journal Sentinel, the Detroit Free-Press and dozens of other newspapers—merged with GateHouse Media, a company controlled by the New Media Investment Group hedge fund, to become the largest newspaper company in the country.
Takeover of American newspapers by private equity firms like Alden has largely been met with simmering resentment and fear, if not outright revolt from newspaper workers. The Denver Post, one of the dailies under Alden’s umbrella, ran a special opinion piece in 2018 blasting its hedge fund ownership’s harsh cutbacks. Two investigative reporters at the Chicago Tribune undertook a public campaign seeking outside benefactors in order to avoid the consequences of Alden’s control, often characterized by severe austerity measures in the name of profitability.
Tribune’s troubles have not been for a lack of trying. In 2016, the company, which dates back to when the Chicago Tribune published its first edition in 1847, rebranded itself as “tronc,” a shortened version of “Tribune online content.” The move shifted the company’s focus to streamlined output centered on video and online platforms before it changed its name back to Tribune Publishing two years later after the venture proved unpopular and unsuccessful.
Joseph Russomanno, a professor at Arizona State University’s Walter Cronkite School of Journalism and Mass Communication, told Courthouse News on Thursday that “in an era in which the economic vulnerability of the news media has been exposed, the sale of any major news organization is concerning.”
More concerning, Russomanno added, was the fact that “the buyer is a group that has no history in news and no tradition of informing the public,” and journalism is a principled, truth-seeking field based on holding those in power accountable, which “has little if anything to do with maximizing profits.”
Kathy Forde, an associate professor of journalism at the University of Massachusetts-Amherst, agreed in an email on Thursday that “private equity firms are sucking the life out of the American newspaper industry and endangering democracy in the process.”
“If Alden buys out Tribune Publishing, we can expect more newsroom closures, more staffing cuts, and a profoundly diminished capacity for investigative and public good journalism” across the nation, Forde predicted, citing the fact that Alden has already “decimated” a number of historic newspapers in Los Angeles, Boston, Philadelphia, Denver and St. Paul.
Alden could not be immediately reached on Thursday for comment on its plans for Tribune.