‘Destroyer of Newspapers’ Vulture Fund Buys Majority Stake at Tribune Publishing

Yves here. This is so sad and appears to have gone under the radar due to the impeachment hearings and Democratic party dominating the news yesterday. So many newspapers disappearing or becoming pale shadows of their former selves.

By Andrea Germanos, staff writer. Originally published at Common Dreams

 (Photo: Rachel Kramer/flickr/cc)

Journalists sounded the alarm Wednesday after Tribune Publishing’s largest shareholder sold his stake in the company to a hedge fund that’s been described as “a destroyer of newspapers.”

In a joint statement, the newspaper unions of Tribune Publishing—representing workers at papers including the Chicago Tribune and Baltimore Sun—said that the news of Alden Global Capital purchasing Michael Ferro’s 25.2% stake in the company should not be seen as “simply another change in stock ownership” because “Alden is not a company that invests in newspapers so they succeed.”

“They buy into newspaper businesses with the express purpose of harvesting out huge profits—well above industry standards—and slashing staff and burning resources,” the statement read.

“We know we are faced with the very real threat that Alden is looking to bleed its next chain of newspapers dry,” it continued.

In a 2018 column, Bloomberg‘s Joe Nocera wrote that Alden was a “notorious as a destroyer of newspapers,” and that, under the direction of President Heath Freeman, the company carries out “layoffs [that] aren’t just painful. They are savage.”

Chicago Tribune Guild member Gregory Pratt commented on Alden’s history of slashing newsrooms, writing in a tweet that “Even in an industry flooded with bad owners, this is awful news. Alden gutted the Denver Post, among many other papers.”

Former Tribune reporter Mark Caro wrote in a tweet that “The Tribune parent company keeps going from one piece-of-garbage owner to another.”

News industry analyst Ken Doctor wrote Wednesday of Ferro:

To his would-be peers in the industry, frequent targets of his disdain, he’s departing appropriately enough, with a signature fuck-you. Who better to sell his Tribune stake—the one his group of Chicago investors had bought at bargain-basement prices, and which, ridiculously, gave him effective control of Tribune—to than the only man in the industry more reviled: Freeman, whose Alden has become the face of bloodless strip-mining of American newspapers and their communities.”

“If you subscribe to Capital Gazette or any of the other Tribune papers, let me introduce you to the vultures your money will now benefit,” tweeted reporter Danielle Ohl, who shared a link to a 2018 NiemanLab article  in which Doctor mused that “Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon.”

The fact that the purchase occurred the same day as Gatehouse completed its takeover of publisher Gannett to become the country’s largest newspaper company added to the chorus of concern.

The New York Times reported Tuesday:

In August, Gannett, the parent company of USA Today and more than 100 other dailies, and New Media Investment Group, the owner of the newspaper chain GateHouse Media, announced their intention to join forces. Over the next two months, the plan breezed through the regulatory process, winning approvals from the Justice Department and the European Union. Last week, shareholders at the two companies voted yea. And now one in five daily papers in the United States has the same owner, under the Gannett name, according to figures provided by researchers at the University of North Carolina.

The combined company will have its headquarters in Gannett’s home base, McLean, Va., and will be led by Michael E. Reed, the New Media chief executive since 2006. The job puts him in charge of more than 260 dailies—from small papers like The Tuscaloosa News in Alabama to big ones like The Detroit Free Press.

“Don’t overlook that today was exceptionally terrible for local newspapers,” CBS Newsproducer Jason Silverstein tweeted late Tuesday. “Gannett and Gatehouse merge. Majority stake in Tribune Publishing is sold to a hedge fund notorious for slashing newsrooms. This is a one-day crisis point.”

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  1. Louis Fyne

    horse left barn a long, long time ago. In my opinion if anything, Facebook and Google are as much to blame as private equity.

    Tribune used to have a national-international network of bureaus, TV stations, and even owned the Chicago Cubs. But it’s endured a slow drip-drip decline under decades of lousy public and private ownership.

    Now it’s a squeezed orange after its last big balance sheet assets ($$$$-located HQ and printing plant) have been sold off.

    1. David in Santa Cruz

      I did a lot of research when Singleton used a W Bush anti-trust waiver to buy up the major non-Hearst California newspapers from Marin to Monterey and subsequently entered bankruptcy. When the papers emerged, they were all eventually owned by the obscure private equity group Alden Global Capital.

      The major bankruptcy creditors were the Gates Family Foundation and the Hearst Corporation. Go figure.

      As always, follow the money…

      1. smoker

        Hadn’t known about the Gates Family Foundation (not in the least surprised) and Hearst Corp. as creditors, though I also followed that issue quite a bit; do tell more. But yep, the forced Knight Ridder break-up comes to mind immediately.

        Then again though, even under Knight Ridder, Gary Webb was utterly destroyed, for writing the seriously horrid truth, while working at Knight Ridder’s San Jose Mercury News – while some of the aholes on board at the time are still there under Alden’s San Jose Mercury News, or either recently and pleasantly moved on to further pastures, or very, very comfortably, retired.

        From up close personal experience, I can say that Knight Ridder had some very toxic personalities on board when its corporate headquarters were at the previously named Knight Ridder Building in San Jose, no doubt they did at the, pre 1998, Miami Herald Building headquarters also.

        I increasingly believe that a vast majority of what I’ve consumed regarding major and minor issues from Reporters allowed to Report™, was (and still is, even more so) usually tainted – and many times, far, far worse than tainted

    2. WestcoastDeplorable

      The vulture capitalists (Bain/Romney) already drained the last drop from the Radio industry and it died without a peep throwing tens of thousands out of work. About time they finished off the newspapers.
      A large piece of the puzzle is due to the Clinton admin discarding the ownership rules, which is why you hear Ryan Seacrest constantly on iHeart stations nationwide.

    3. WestcoastDeplorable

      The vulture capitalists (Bain/Romney) already drained the last drop from the Radio industry and it died without a peep throwing tens of thousands out of work. About time they finished off the newspapers.
      A large piece of the puzzle is due to the Clinton admin discarding the ownership rules, which is why you hear Ryan Seacrest constantly on iHeart stations nationwide.

  2. Arizona Slim

    A few days ago, someone wrote a comment in favor of worker-owned publications. Count me as another NC-er who agrees with that idea.

    1. Dirk77

      Yet, the Tribune unions made no move to buy their newspapers from Ferro, etc. Since they knew what was coming what stopped them?

  3. Wukchumni

    When we moved here 15 years ago, you could buy both the LA Times & SF Chronicle in paper backed editions, and then about a dozen years ago one day, they both went away. Our local weekly newspaper gave up the ghost earlier in the year and went online only, and really lost something along the way to oblivion.

    I feel awkward going out to breakfast sans a familiar friend in hand, to peruse in an old fashioned way.

    1. Joe Well

      >>I feel awkward going out to breakfast sans a familiar friend in hand, to peruse in an old fashioned way.

      If I see a newspaper lying around somewhere, I always pick it up and look through it, especially if I’m having coffee. Soon, the whole commonplace experience will be gone, a Proustian memory.

      But I can’t bring myself to buy one. It would be like going onto MSNBC.com or worse and donating $2.

  4. Joe Well

    Ten years ago, I met a guy who was 35 and who was laboring under $100,000 of journalism school debt. He was a school teacher at a private school because there was no way he could afford to be a journalist even without the debt, much less with it. He is one of only two Americans near my age I have known who ever took serious steps to work in journalism (the other got out after a few years as a local newspaper reporter).

    The whole professional journalism industry seems like it’s a rich kids/lucky Boomer club (look at how they treat Bernie!) which makes it difficult for me to feel bad about legacy media being destroyed. It’s like if you told me that tenure for university professors were being abolished. It’s a world of privileges that was not built to serve me but rather to exploit me. Shouldn’t I be happy if it falls apart?

    Also, has anyone ever tallied all the bad things newspapers do, like legitimating malfeasance at CALPERS, alongside the good and compared?

    1. lyman alpha blob

      I do see your point, however being totally uninformed isn’t any better and just makes it easier for the wolves to prey on the sheep.

      To use your example, even if a paper is legitimizing malfeasance at CALPERS, at least you are able to know it’s happening and are able read critically enough to know the paper is in the wrong.

      1. notabanker

        I cannot get on board with intentional propaganda is better than no news at all. Mediums fill the void. Their irresponsible decisions should seal their fate.

        This is essentially the same rationale for TARP and QE. Can’t let them fail so bail them out. The banks should have failed, we should have let them fail, and we should have dealt with the fallout. It would have been painful, but look where we are at now. It’s going to be a lot worse.

  5. Danny

    Chicago, and the entire state of Illinois, seems to be one of the epicenters of American financial and civic decline.

    p.s. There’s something wrong with the way only this page displays. All other N.C. pages work fine.

    There is no left margin. The text is jammed up to the very left edge. (In Firefox)

      1. The Rev Kev

        Same here on Firefox and the elements to the right are down the bottom so the text spans the entire page.

  6. Carolinian

    Of course it was the NYT that sold our local newspaper to Gatehouse–not that we are noticing much difference. The Times was big on owning local papers for awhile. Then they weren’t.

    I’d worry less about local papers like mine and more about big city newspapers that actually had a decent amount of content. If our national newspapers like the NYT keep going downhill then perhaps Gatehouse will buy them.

  7. barefoot charley

    Thankfully Tribune finally sloughed off the LA Times before giving itself this final kneecapping. Hard to believe the news could be even worse.

    1. Anon

      The Tribune Co. sold the newspaper portion of the LA Times, but kept the real estate (Times building in downtown is a historic and expensive piece of RE) for major profit stripping. The new owner (a wealthy doctor/inventor) has made “muckraking” its’ new focus. They do good work.

      1. Danny

        The L.A. Times is actually impressive, especially when compared to lackluster POS, like the S.F. Chronicle, or even far worse, the Marin Independent Journal, or other Bay Area Newspapers that use the same exact software, pictures and articles.

        This is a good opportunity to switch allegiance and advertising dollars to whatever independent and alternate papers there may be left.

  8. Brooklin Bridge

    One more thing, intentional or not, herding and locking us into digital services that extract more information from us than ever dreamed possible, make that data available, persistent, no longer our own, and always ready to be analyzed and exploited. If you buy a hard copy news paper and take it home to read in your kitchen (or house), you have quite a bit of well established law protecting your privacy. Go online, and that disappears.

    I was just musing the other day about banks and privacy. I recall back in the misty days of the 1990’s, one’s privacy at a bank was (I think) considered sacrosanct. Now I get the same barn door wide open letters in postal form from the banks (always starting off with, “We take your privacy very seriously…”) that I get from web sites. Of course that makes cents, not for us, as it ties in with all their digital services. It’s a new world considerably more barren of individual as well as of human rights.

    The same phenomenon applies to print news paper take overs. A certain amount of law had been established (hard fought) regarding journalists and the rights of the press which is being severely threatened or outright upended in the digital sphere. And few indeed are noticing this. Simple convenience and innocuous looking virtual scenery (reaching out deceptively like a twisted growth from more passive but still pathological TV patterns) has proven unbelievably alluring and seductive.

  9. Pelham

    The internet appears to have a major hand in the demise of newspapers, largely because the defamation laws that apply to every medium — including print — completely exempt online sources. Perhaps much of this problem would be solved if the laws were applied evenly. Then Facebook, Google et al would be sued out of existence.

    Separately, given all the experimentation that major newspapers have undertaken online over the past 15 to 20 years, I remain mystified by the fact that not one has at least tried to go offline altogether (except for subscriber services). Why not try that model? What’s left to lose? Simply copyright all the original content and sue the pants off anyone who dares to duplicate it online. That way, for instance, if people in Chicago wanted actual news produced by actual journalists, they’d have to buy a physical paper. Containing, incidentally, often attractive display ads that don’t pop up and crapify your attempts to read and then track your every move.

    1. Yves Smith Post author

      That is not true. Defamation is defamation.

      What you seem to be not getting is that is a website does not moderate user content at all, it is not liable. It is acting as a communications platform and the content-providers (the commentors or the FB posters) are liable..

      If you are a publisher, you are liable. If you moderate comments, you are liable for them.

      The problem is defamation in the US has become so eroded in case law compared to what it was before that even if you win, it is hard to get meaningful damages. And who can sue someone with virtually unlimited deep pockets like Google or FB?

  10. KenG

    I’ve been a Tribune subscriber for many years, both digital and paper. John Kass and the editorial board are reliably idiotic (they endorsed Gary Johnson in 2016), but they still do some really good reporting.

    Just this week they’ve had stories about IL schools keeping kids in solitary confinement and environmental challenges in Lake Erie. They are one of the few papers with the resources to do reporting on issues that affect the Great Lakes region.

    I imagine going forward I can expect a lot more dumb editorials and wire stories and a lot fewer in-depth stories about the region.

    P.S. The Tribune now carries adds for upscale apartments in the Tribune Tower, which the paper moved out of earlier this year. Quite the symbol of our misplaced priorities.

  11. Tyronius

    When I was a kid, my dad wrote for the Denver Post and the Rocky Mountain News. Journalistic integrity meant something. Telling the truth was not negotiable. Ownership of the papers as not commingled with ownership of other major corporations so there was little temptation to cover for corporate malfeasance. That era seems like a fairytale now…

    Once again, I must thank the tireless efforts of NC and others to keep us informed about the mass takeover of our country by the forces of graft and grift.

  12. John

    Read the wiki on yellow journalism around 1895….we been here before. Sensationalism and war mongering.
    Hopefully the greedheads will lose a lot of money selling off the corpse.
    Will keep on happening until American workers learn that they must organize to keep from being eaten by the predators individually.

  13. Math is Your Friend

    “The internet appears to have a major hand in the demise of newspapers, largely because the defamation laws * * * completely exempt online sources. Perhaps much of this problem would be solved if the laws were applied evenly. Then Facebook, Google et al would be sued out of existence.

    * * * given all the experimentation that major newspapers have undertaken online * * * I remain mystified by the fact that not one has at least tried to go offline altogether (except for subscriber services). Why not try that model? * * * if people in Chicago wanted actual news produced by actual journalists, they’d have to buy a physical paper. ”

    1. IIRC, the decline of print media was well underway with the rise of television news. Whether that would have been as effective in supplanting print media without the help of the internet is unclear.

    2. The internet is international. Most of the newspapers I read I find on web sites in other countries. In general, countries prefer to control their own laws, not have other countries impose foreign laws at whim. When you live in the same country as the news outlet you want to sue, you don’t have messy problems with lack of legal authority. If you are suing a news site in China, or Russia, or Brazil, you may not have much traction.

    3. The internet has enormous inherent advantages over print media. It has much lower costs, for almost all aspects of the business. The incremental cost of serving another customer is almost nil. The cycle from event to presentation to the audience can be down to minutes, or fractions of an hour, producing a continuous news cycle the print cannot match. At one time, some major papers had as many as five to seven editions, to keep refreshing the content over 24 hours. The cost of that eventually drove most to one or two editions. It is also easy to distribute the staff over the world, most working from home, if you are web only. No cost for offices. Stories filed within an hour of the reporter getting the information. No more photographers, or delays in moving and developing film… for news purposes the reporters’ phones are quite adequate. Less cost faster service.

    4. You can find real journalists on the web, with more variety and freedom of expression than those bound to a single company and a largely local market. It is much easier to seek out sources that agree with you, and also easier to seek out a diverse collection of viewpoints from around the world. I find that often some of the more insightful analysis can come from writers and sites in another continent rather than the one where the relevant events are unfolding.

    Other web news sources include digital editions of print media, and sites run by broadcast media outlets or news agencies or networks, again, often with really good journalists writing the material.

    And then there are individual journalists’ sites. At one time journalists could be punished for nonconformist ideas and independent thinking by firing them, removing their ability to express alternate viewpoints. Unless you found a paper that had policies aligned with your worldview, you stayed silenced. Now a good, established journalist can have their own site – and if they are good enough reporters, people can and will go there.

    All those advantages made it largely inevitable that the print news media would eventually go the way of the town crier.


    “Containing * * * display ads that don’t pop up and crapify your attempts to read and then track your every move.”

    Here is a different set of reasons driving change.

    1. Advertisers want to pay for results – clicks, online sales, sales in physical stores, demonstrable influence on actions, information to better sell to and influence viewers.

    2. Modern internet advertising services can and do measure all those things in a way that is impossible with print. That is why the ad money goes largely to the internet, not to print media.

    3. Modern advertising can track and extract far more information than most people realize. That information is valuable, and can be sold for a goodly sum. For that matter, tracking and analytical techniques can provide a starting point for criminal activities as well, including burglary, fraud, spear phishing, identity theft, and doubtless things I haven’t thought of in the 90 seconds spent typing this. Advertisers may have that kind of motivation as well, and if they don’t want to hack advertising servers, they can just buy the information – which makes you and your information an even more valuable commodity.

    To put a rough scale on this, there have been estimates that car manufacturers can make 10 times as much selling the data your connected car gathers about you than they will selling you a new car. (radical but not unsound advice – if you have a connected car, visit the cellular transmitter with wire cutters or a very hot soldering iron).

    As for the ads themselves, the annoyance and distraction are not the worst negative effect.

    At this time, a single ad with a ‘properly’ structured image, font, media file, script, or character set can completely compromise your computer, silently giving someone on the other side of the planet complete control over it, and your data, and probably, every other device on your network. The remote attacker can see everything you do, and if you have a camera or microphone in your computer, they can silently watch and listen to everything around the computer, as well as steal the passwords to every service you access with that machine. A compromised computer can hide attack code on every USB device you plug into it, attack any computer on your network, probably attack devices that send or receive mail from that machine, or that synchronize data with that machine. Your contact lists, financial activities, encryption keys, personal images and journals… all of these are either exposed or at risk.

    If you have the right defenses on your computer you will often see each site you visit calling executable code from dozens or even scores of other sites. Those in turn may serve dozens or scores of ads during a browsing system, and they may call other sites. Smart attackers will slip one poisoned ad or image or font into every hundred or every thousand ads, making it really hard for anyone to pinpoint the real source of the attack, concealing the fact that a site or ad service has been compromised.

    Remember that there are no safe sites. Hacked sites commonly include commerce sites, banks, governments, police forces, military, advertising services, media sites, transportation sites, health sites, universities, and even if the root site is safe any site it calls for any purpose may present poisoned data or code… or call an unsafe site at the next remove.

    Everything noted about computer vulnerabilities apply, and even more so, to smartphones.

    Never, never go on the internet without a full set of defensive extensions and software. A complete set should include anti-malware and anti-root kit software, firewall, disk and data stream scanners, script blockers, anti-tracking and privacy protection, and if using wireless networks, a good VPN with strong encryption and a network lock. That’s the basic set, but it will make you a couple orders of magnitude harder to compromise. Levels of protection after that take more work.

    And don’t put anything that will hurt you if it is compromised on a smartphone.

    Or in the cloud, unless you have encrypted it before it left your device and don’t decrypt it until it comes back.

    And not with any system that lets anyone other than the intended recipient have a key to the data.

    Assume anything on a shared server may be at risk (Meltdown, Spectre, Rowhammer, hypervisor escapes, etc – all of which bypass security that should separate different users or even different virtual machines).

    Sigh. To do this topic justice would take hours at talking speed, let alone my typing speed. Stopping now…

    1. Yves Smith Post author

      Please don’t make shit up. This comment is rife with it.

      1. The rapid decline of newspapers have absolutely nothing to do with defamation laws. Thanks to a series of adverse decisions, defamation is now very hard to prove (the standard is now willful or reckless), particularly for public figures. On top of that, it is even harder to win damages.

      The internet sure did kill newspapers, but it was via decimating classified ads, which once provided about half of total industry revenues. This is widely known and you embarrass yourself by fabricating an alternative story.

      2. You are also wrong about Internet ads. Virtually none are click through any more. Virtually all are CPM, or reader views. Advertisers do look for a site to have a certain low level of clicks on ads, but that is generally widely met.

      The fact that FB has huge fraud in its metrics is proof of how crappy advertiser verification methods are.

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