A major hedge fund with a reputation for aggressive cost cutting got the greenlight on Friday to acquire Tribune Publishing, the owner of big city dailies such as The Chicago Tribune, The Baltimore Sun, the Orlando Sentinel and The New York Daily News.
Tribune shareholders approved the deal with Alden Global Capital, dashing the hopes of a number of employees at the publications who fear that they will soon see jobs lost and coverage scaled back. There had been hopes that the largest shareholder of Tribune, Patrick Soon-Shiong, who owns the Los Angeles Times and the San Diego Union Tribune, would try to block the deal, but he abstained from voting. A spokesperson said that he viewed his Tribune stake, which is almost 24%, as a “passive investment,” and that he was concentrating on his California holdings, which are facing their own set of financial challenges.
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The deal was valued at $630 million. Alden Global already owns about 200 other papers. The deal is expected to close next month, and will take the company private.
Employees at the Tribune papers had appealed to alternate buyers. A hotel owner, Stewart Bainum Jr., had made a counter offer, but it fell apart after a billionaire partner backed out of the proposal.
Per the AP, the president of Alden Capital, Heath Freeman, said in a statement, “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.”
A number of news guilds issued a statement after the vote, condemning Tribune Publishing shareholders for voting to “put profit and greed over local news in our country.”
Jon Schleuss, the president of News-Guild CWA, tweeted, “Tribune Publishing shareholders just approved Alden’s takeover of the company. This is disappointing, but our fight will continue to grow. Hedge funds have no place in the news industry.
Alden owns titles including the Los Angeles Daily News, the San Jose Mercury News, the Boston Herald and the Denver Post, but it has aggressively slashed costs and sold off real estate.
A declining advertising base has devastated local media, but what sets the Alden Capital deal apart is it involves the purchase of a number of big city dailies among Tribune’s nine metropolitan properties. The Chicago Tribune, founded in 1847, once had as its slogan the “world’s greatest newspaper,” even assigning it to the call letters of the station it once owned, WGN-TV. But Tribune is just a shell of its former self, not just because of the decline in the industry but due to crippling financial moves, including a buyout in 2007 by real estate investor Sam Zell that was followed by the company’s filing for bankruptcy. A private equity buyout in 2012 found Tribune’s papers split from the more lucrative TV stations into two separate companies. The stations were eventually sold to Nexstar.
Lawmakers have taken notice of the troubles with local media, with one pending piece of legislation that would allow local media outlets to collectively negotiate for deals with major tech platforms. But the bill has yet to advance.
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