Hedge Fund Known For Slashing Newsrooms Poised To Buy Tribune Publishing
STEVE INSKEEP, HOST:
A hedge fund is set to buy Tribune Publishing, a newspaper chain with papers in cities big and small. The hedge fund is known for taking control of newspapers and then slashing their newsrooms in search of profits. Tribune Publishing includes the Chicago Tribune, along with the New York Daily News, The Baltimore Sun and the Orlando Sentinel, among many other famous papers. NPR media correspondent David Folkenflik is here. Hi there, David.
DAVID FOLKENFLIK, BYLINE: Good morning, Steve.
INSKEEP: OK, company shareholders are set to vote on the sale today. Who's the buyer?
FOLKENFLIK: The buyer is expected to be a company called Alden Global Capital. It's been wanting to take over Tribune Publishing for several years now. It is a secretive fund, doesn't talk much about what it wants to do, says it wants to create a viable business model for newspapers. But the way it does that is by ramping up its expectations for what profit margins should be and slashing deeply the amount of people doing the covering, in some cases to the point where these newspapers are a shadow of what they used to be and their ability to cover events happening in the communities that they purport to serve has been harmed, in some cases irreparably.
INSKEEP: I guess we should underline a basic fact about reporting is that it's labor intensive. You need time to look up information. You need time to check things, to interview people or just time to think. So how much have they damaged newspapers in other other cities?
FOLKENFLIK: Well, you know, you take a newspaper like - San Jose Mercury News used to have several hundred people in its newsroom. It's now down to a few dozen. You're not going to get people able to hold public officials accountable, to provide checks on corporate excess or pollution, to do the kind of accountability that people can't do for themselves and still operate as informed citizens in our form of democracy.
INSKEEP: I'm a little surprised to hear news of this sale, David, though, because I had been following news stories leading up to this and I thought there was another offer by another company on the table.
FOLKENFLIK: Well, actually, what there was was an incredible grassroots opposition, led in part by an education reporter at The Baltimore Sun named Liz Bowie who dubbed it Project Mayhem. She connected with union members at newsrooms throughout the chain to try to identify public-minded figures and organizations that might come forward and buy the local papers. A guy named Stewart Bainum Jr., a hotel magnate in Maryland and a major philanthropist, said that he wanted to acquire The Baltimore Sun and run it as a nonprofit. He actually struck a deal with Alden to do that, assuming its deal went through, became so disgusted by Alden that he tried to launch a bid for the entire company. That seems to have fallen just flat. But, you know, there were folks who emerged in most of these markets who did want to take these papers and said that they were offering a public service mission for the papers as opposed to the increased profits that Alden has made clear it intends to get.
INSKEEP: So given all this resistance, why would the shareholders of Tribune Publishing be willing to sell to Alden?
FOLKENFLIK: Well, it's a question of price. Alden Global is offering a price for each share that is, you know, markedly greater than what the stock market was valuing it at so that they would essentially get a nice bump up for their investments. This was a company essentially created to be sold. It split off from what was the larger Tribune Company, which had more profitable TV holdings. And the real question is, what deal can they get after years of mismanagement and years of essentially a kind of plundering by previous owners? You've got all eyes, at the moment, towards the west in Los Angeles, where a major shareholder named Patrick Soon-Shiong, who owns the Los Angeles Times, has about a quarter of the shares. The company has got to decide whether or not he's going to throw his support to the Alden bid.
INSKEEP: And of course, it is an election. And the more shares you have, the more votes you have. David, thanks.
FOLKENFLIK: You bet.
INSKEEP: NPR's David Folkenflik. Transcript provided by NPR, Copyright NPR.