Key Takeaways
- • The NewsGuild-CWA issued formal divestment calls on September 20, 2021, to California Public Employees' Retirement System (CalPERS) and Pennsylvania Public School Employees' Retirement System (PSERS), urging them to reconsider investments in Cerberus Capital Management due to the firm's financial support of Alden Global Capital's newspaper acquisitions.
- • Cerberus provided a $218 million loan that enabled Alden Global Capital to acquire Tribune Publishing in May 2021; NewsGuild President Jon Schleuss characterized this financing as enabling the "destruction of local news" through asset-stripping strategies.
- • Alden Global Capital, backed by Cerberus funding, has cut thousands of news jobs, shuttered newsrooms, and engaged in pension fund misallocation across its ownership of MediaNews Group and Tribune Publishing newspaper chains, according to union allegations.
- • Eight of Cerberus Capital Management's top 10 investors are public employee pension funds, meaning taxpayer-backed capital is financing the private equity firm's media industry involvement, raising governance and fiduciary duty questions for institutional investors.
- • The NewsGuild has escalated pressure on Cerberus since at least 2019, with previous union leadership and current President Schleuss sending multiple letters to firm founder Stephen Feinberg documenting alleged asset-stripping tactics that undermine local news coverage.
Summary
The NewsGuild-CWA, the media industry union representing journalists and publishing workers, launched a coordinated divestment campaign on September 20, 2021, targeting two of the nation's largest public pension systems. In letters addressed to CalPERS and PSERS, union President Jon Schleuss directly challenged the pension funds' investment exposure to Cerberus Capital Management, contending that their capital allocation "enables the destruction of local news" through Cerberus's financial backing of Alden Global Capital.
The core issue centers on Cerberus's provision of a $218 million loan that facilitated Alden Global Capital's takeover of Tribune Publishing in May 2021. According to Schleuss's communications, Alden has deployed an asset-stripping strategy across its newspaper holdings, which include the MediaNews Group and Tribune Publishing chains. The union documented specific harms: thousands of news jobs eliminated, newsroom closures, weakened local news coverage, and pension fund misallocation by portfolio companies. Schleuss framed these actions as undermining "news coverage critical to American democracy" and directly depriving local communities of essential information.
This campaign represents an escalation of union pressure that began earlier in 2021. On July 29, 2021, Schleuss sent a nine-page letter to Cerberus founder Stephen Feinberg that included detailed citations of Alden's asset-stripping actions and specifically requested disclosure of the Tribune financing terms. The NewsGuild's previous president, Bernie Lunzer, had similarly raised concerns with Feinberg in 2019, establishing a multi-year pattern of union advocacy on the issue.
A critical structural element underpins the divestment appeal: eight of Cerberus Capital Management's top 10 investors are public employee pension systems, meaning taxpayer-backed capital effectively finances the private equity firm's operations and investment strategy. This dynamic creates potential governance and fiduciary duty questions for pension plan trustees, as their institutional capital flows to a firm whose portfolio company decisions demonstrably reduce employment and newsroom capacity in the media sector.
The divestment call targets pension fiduciaries specifically on the grounds that their investment decisions implicate broader societal impacts on local journalism and community information access, alongside traditional financial performance metrics.
The core issue centers on Cerberus's provision of a $218 million loan that facilitated Alden Global Capital's takeover of Tribune Publishing in May 2021. According to Schleuss's communications, Alden has deployed an asset-stripping strategy across its newspaper holdings, which include the MediaNews Group and Tribune Publishing chains. The union documented specific harms: thousands of news jobs eliminated, newsroom closures, weakened local news coverage, and pension fund misallocation by portfolio companies. Schleuss framed these actions as undermining "news coverage critical to American democracy" and directly depriving local communities of essential information.
This campaign represents an escalation of union pressure that began earlier in 2021. On July 29, 2021, Schleuss sent a nine-page letter to Cerberus founder Stephen Feinberg that included detailed citations of Alden's asset-stripping actions and specifically requested disclosure of the Tribune financing terms. The NewsGuild's previous president, Bernie Lunzer, had similarly raised concerns with Feinberg in 2019, establishing a multi-year pattern of union advocacy on the issue.
A critical structural element underpins the divestment appeal: eight of Cerberus Capital Management's top 10 investors are public employee pension systems, meaning taxpayer-backed capital effectively finances the private equity firm's operations and investment strategy. This dynamic creates potential governance and fiduciary duty questions for pension plan trustees, as their institutional capital flows to a firm whose portfolio company decisions demonstrably reduce employment and newsroom capacity in the media sector.
The divestment call targets pension fiduciaries specifically on the grounds that their investment decisions implicate broader societal impacts on local journalism and community information access, alongside traditional financial performance metrics.
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