The newspaper business has struggled for most of the 21st century as the rise of digital media has cut deeply into the revenue once generated by print advertising and newsstand sales. At the same time, Facebook and Google have grabbed a huge chunk of digital ad revenue, effectively blocking the industry from one of its traditional sources of cash.
Roughly a quarter of the newspapers in the United States, most of them weeklies, were shut down between 2004 and 2019, while about 50 percent of newspaper jobs were eliminated. Hedge funds, however, see newspapers as a potential bargain. With a strict management style that often means job cuts and shrunken coverage of local news, they have been able to squeeze them for profit.
In the process, they have often angered their employees. Journalists at The Denver Post, a daily controlled by an Alden media company, mutinied in 2018 by publishing a special section of opinion essays that blasted the hedge fund, likening its executives to “vulture capitalists.” Earlier, Alden ordered The Post to slash 30 jobs from a newsroom that was down to 100 editorial employees, having already lost a significant number of journalists to layoffs and buyouts since the firm took control in 2010.
Penny Abernathy, a former New York Times and Wall Street Journal executive who studies the economics of local media at the University of North Carolina’s journalism school, said Alden’s track record did not bode well for Tribune Publishing newspapers that may fall under its control.
“Based on the model Alden has used so far, this is contraction of the industry without a significant investment for the future of newspapers,” she said. “One of the problems with these large chains is they’re disconnected, journalistically and economically, from the communities those newspapers serve.”
Some journalists who work for Tribune Publishing papers — which also include The Orlando Sentinel and The Hartford Courant — have tried to persuade wealthy benefactors to step in before the hedge fund was able to gain more shares. Last year, two Chicago Tribune reporters sent letters to Chicago luminaries urging them to buy the paper. In Baltimore, journalists backed the effort to interest Mr. Bainum in The Sun.
Randall D. Smith, a onetime Bear Stearns partner who runs Alden with Heath Freeman, took a seat on the Tribune Publishing board last summer. He was the third executive from Alden or affiliated companies to join the seven-member board. The other Alden representatives are Dana Goldsmith Needleman and Christopher Minnetian.