Key Takeaways
- • Tribune Publishing shareholders approved a $630 million takeover bid by New York-based hedge fund Alden Global Capital, which already held a 32% stake in the company.
- • Alden has a record of deep newsroom cuts at its existing papers, including cutting The Denver Post by roughly a third twice and reducing the San Jose Mercury News from more than 200 journalists to a couple dozen, according to NPR's David Folkenflik.
- • Tribune's own chief content officer reportedly told staff that the chain earns profit margins of about 10 to 13 percent per newspaper, and Alden would likely seek to roughly double that to above 20 percent, which Folkenflik says would require reducing headcount.
- • Local-buyer efforts, led by journalists including Liz Bailey, attracted investors in South Florida, Allentown, Pennsylvania, and Hartford, Connecticut, but no Chicago investor stepped forward to back a bid for the Chicago Tribune.
- • The deal was expected to close as early as the following week, and Folkenflik noted Alden may have legal authority to load the company with debt of a couple hundred million dollars, which could prompt further cuts.
Summary
Shareholders of Tribune Publishing approved a $630 million takeover bid from Alden Global Capital, a New York hedge fund, according to NPR's coverage. The deal gives Alden full ownership of a chain that includes the Chicago Tribune, Baltimore Sun, Hartford Courant and New York Daily News. Alden already owns the MediaNews Group and Tribune Publishing's rival digital-first chain, which includes the San Jose Mercury News, Denver Post and Boston Herald. The transaction was expected to close as early as the following week.
NPR's David Folkenflik said Alden has an established record of cutting newsrooms. He cited the Denver Post, which was cut by a third, then cut again by another third after staff were moved to a printing facility outside town. The San Jose Mercury News, once one of the region's leading papers, reportedly had more than 200 journalists and now has a couple dozen. Folkenflik said such reductions limit reporters' ability to cover city government and corporate actors.
Unions representing several Tribune papers opposed the deal, and journalists led by former Baltimore Sun education reporter Liz Bailey created a group called Project Mayhem to seek alternative buyers. Investors in South Florida, Allentown, Pennsylvania, and Hartford, Connecticut, expressed interest in participating. However, no Chicago-based investor stepped forward to contribute toward a bid for the Chicago Tribune, the chain's largest paper.
Folkenflik reported that Tribune had already cut back its newsrooms before Alden's involvement, but that the company remained profitable. He obtained audio of the chain's chief content officer, who is also editor in chief of the Chicago Tribune, telling staff that profit margins are about 10 to 13 percent per newspaper. That official reportedly warned that Alden would seek to roughly double margins to more than 20 percent, which Folkenflik said would typically require headcount reductions and lower pay for new hires. He also noted that Alden could add a couple hundred million dollars in debt to the company, which could lead to further cuts to service those loans.
NPR's David Folkenflik said Alden has an established record of cutting newsrooms. He cited the Denver Post, which was cut by a third, then cut again by another third after staff were moved to a printing facility outside town. The San Jose Mercury News, once one of the region's leading papers, reportedly had more than 200 journalists and now has a couple dozen. Folkenflik said such reductions limit reporters' ability to cover city government and corporate actors.
Unions representing several Tribune papers opposed the deal, and journalists led by former Baltimore Sun education reporter Liz Bailey created a group called Project Mayhem to seek alternative buyers. Investors in South Florida, Allentown, Pennsylvania, and Hartford, Connecticut, expressed interest in participating. However, no Chicago-based investor stepped forward to contribute toward a bid for the Chicago Tribune, the chain's largest paper.
Folkenflik reported that Tribune had already cut back its newsrooms before Alden's involvement, but that the company remained profitable. He obtained audio of the chain's chief content officer, who is also editor in chief of the Chicago Tribune, telling staff that profit margins are about 10 to 13 percent per newspaper. That official reportedly warned that Alden would seek to roughly double margins to more than 20 percent, which Folkenflik said would typically require headcount reductions and lower pay for new hires. He also noted that Alden could add a couple hundred million dollars in debt to the company, which could lead to further cuts to service those loans.
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