What started me down this twisted path this morning was opening my email and opening up the email from our local paper, The Daily Local News to see what the local headlines were. And the headline had nothing to do with Chester County news this morning. It was basically a glorified press release of a tobacco based business opening in West Reading, which is in Berks County.
I will state for the record I have nothing against this business and Berks County I wish them luck, but I live in Chester County and when I opened my email that’s supposed to hold local news headlines it was a glorified press release from a business in Berks County somebody had turned into an article and the reason it was turned into an article is because there are so few reporters left for any of these local papers and they are supposed to just churn things out. Yes churn.
In 2011, Journal Register Company was bought by Alden Global Capital after coming out of bankruptcy. Alden is a hedge fund that specializes in distressed debt assets. The journal register was based in Yardley and owned lots of newspapers, including in our area like the Daily Local, Main Line Media News, Morning Call, Delco Times, etc.
See snippet from 2021 when they bought Morning Call up in Allentown, which was another terrific paper:
By JON HARRIS |
PUBLISHED: May 25, 2021
Allow me to share this article from NPR about Alden Capital:
NPR: When this hedge fund buys local newspapers, democracy suffers
Updated October 18, 202111:58 AM ET
Heard on Morning Edition
By
Rachel Treisman
Have you heard of the hedge fund Alden Global Capital?
If you’re a reader of local newspapers — particularly the Chicago Tribune, The Baltimore Sun or New York Daily News — you’re going to want to make sure the answer is yes. That’s because the fund is stepping in to buy — and then gut — newsrooms across the country.
And that has consequences for democracy, as journalist McKay Coppins writes in The Atlantic. Below are highlights from his conversation with Morning Edition‘s A Martínez.
NPR reached out to Alden for a response. A spokesman took issue with the entirety of the story, and laid out a long list of questions attacking the integrity of the reporter, The Atlantic and some of his sources without addressing some of the more specific claims within the report.
Research shows that when local newspapers disappear or are dramatically gutted, communities tend to see lower voter turnout, increased polarization, a general erosion of civic engagement and an environment in which misinformation and conspiracy theories can spread more easily.
Coppins notes that there’s even some research indicating that city budgets increase as a result, because corruption and dysfunction can take hold without a newspaper to hold powerful people to account….Coppins describes Alden as a specific type of firm: a “vulture hedge fund.” It has figured out how to make a profit by driving newspapers into the ground, he says, since Alden’s aim is not to make them into long-term sustainable businesses but rather maximize profits quickly to show it has made a winning investment.
Some of these papers likely would have been liquidated if the fund had not stepped in to buy them, as Alden’s president told Coppins. But that’s not true for all of them.
The Tribune Company (which owns the newspapers mentioned above) was still turning a profit when Alden bought it, but the hedge fund immediately offered aggressive rounds of buyouts and shrunk its newsrooms in the name of increasing profit margins….A recent Financial Times analysis found that half of all daily newspapers in the U.S. are controlled by financial firms, and Coppins says that number is all but certain to keep growing.
“The question is, will local communities decide that this is an important issue, that it’s worth saving these newspapers, protecting them from firms like Alden, or will they decide that they don’t really care?” he asks.
https://www.npr.org/2021/10/18/1046952430/the-consequences-of-when-a-hedge-fund-buys-newspapers
And I think that is the question facing our local communities, does local news matter to us?
The Atlantic:
A SECRETIVE HEDGE FUND IS GUTTING NEWSROOMS
Inside Alden Global Capital
By McKay Coppins
The tribune tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige. When plans for the building were announced in 1922, Colonel Robert R. McCormick, the longtime owner of the Chicago Tribune, said he wanted to erect “the world’s most beautiful office building” for his beloved newspaper. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. Prior to the building’s completion, McCormick directed his foreign correspondents to collect “fragments” of various historical sites—a brick from the Great Wall of China, an emblem from St. Peter’s Basilica—and send them back to be embedded in the tower’s facade. The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen before—“romance in stone and steel,” as one writer described it. A century later, the Tribune Tower has retained its grandeur. It has not, however, retained the Chicago Tribune.
To find the paper’s current headquarters one afternoon in late June, I took a cab across town to an industrial block west of the river. After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. The scene was somehow even grimmer than I’d imagined. Here was one of America’s most storied newspapers—a publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizes—reduced to a newsroom the size of a Chipotle….In May, the Tribune was acquired by Alden Global Capital, a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country. The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. Instead, they gutted the place.
Two days after the deal was finalized, Alden announced an aggressive round of buyouts. In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldn’t manipulate, and the photographer who had produced beautiful portraits of the state’s undocumented immigrants, and the investigative reporter who’d helped expose the governor’s offshore shell companies. When it was over, a quarter of the newsroom was gone.
Of course, after a little research, I realized that Alden Capital doesn’t own just a lot of our local newspapers. They are also into mobile home parks according to the Columbia Journalism Review:
The vulture fund that picked American newspapers apart has a new target
By Julie Reynolds
MAY 9, 2023
It’s late November, and nighttime temperatures have dropped below freezing in Christiansburg, Virginia, a town tucked in a valley between Blacksburg and the Blue Ridge Mountains. Sarah Rupp, an aide at Belview Elementary School, learned from a kindergartner’s grandparent that eviction notices were being posted at Massie’s Mobile Home Park, the only low-income housing in town. The modest manufactured homes, arranged in neat rows, are tidy but mostly aging. Some are sided with corrugated metal. Some—though they’re called mobile—appear nearly impossible to move.
Rents at Massie’s have shot up some 40 percent after new owners bought the park last spring. Since then, Rupp says, some renters have moved, leaving the park around 20 percent vacant. A few fled in the night, leaving possessions behind, she said. Rupp shows me a photo of abandoned children’s toys in a vacant mobile home. She worries that her school may lose as many as 15 percent of its students to homelessness.
Other tenants at Massie’s have been given eviction notices or “pay or quit” letters. Some were posted on doors of people who’ve already paid their rent, while phones at the numbers provided by the new owners go unanswered.
An hour’s drive northeast of Massie’s is Princeton, West Virginia, where Valeria Steele owns her mobile home. A single mother of a special-needs child, Steele pays rent for the land beneath her house at Elk View Estates. Unlike Massie’s, where the tenants rent their trailers, at Elk View many of the tenants rent the land but own their homes, or have a rent-to-own contract. Though she hasn’t been given a new lease, Steele’s monthly lot rent shot up to $525—$300 more than she previously paid—after new owners took over the park last fall.
Tenants at both parks send their rent checks to a post office box in Englewood, New Jersey, that is associated with Smith Management, the parent company and deeply intertwined affiliate of Alden Global Capital, a hedge fund famously described by Bloomberg’s Joe Nocera as the “destroyer of newspapers.”
Massie’s and Elk View are among the more than one hundred such parks owned by limited liability corporations that in turn are owned by Homes of America LLC, a Delaware corporation that’s part of Smith Management. Across the country, Homes of America tenants are raising similar complaints: rent hikes of 40 to 60 percent, lack of basic maintenance, and unreachable managers. The parks’ owners have also become the targets of tenant lawsuits and legislation calling for tighter regulation.
Alden has become infamous for swallowing local newspaper chains and extracting their real estate and cash. Cofounders Randall Smith and Heath Freeman and their colleagues have been investing more than $150 million in mobile-home parks around the county since 2021, financing them through an entity called Tribune II MHP Finance One LLC.
Alden’s mobile-home-park strategy reminded me of what the hedge fund has already done to newsrooms. When Alden took over theMonterey County Herald in California (where I worked for ten years, the last three under Alden), the hot water stopped working and was never fixed. Staff had to place plants under a leaking roof. Several of Alden’s newspapers in the Philadelphia area suffered leaking toilets and other infrastructure problems before the buildings were sold.
Well, here we are. Psychologically there has to be something that can be said about a hedge fund that seems to deal in human discomfort, correct? Depriving us of the news and depriving some people of the only affordable housing they’ve ever been able to find and aren’t they just princes among men, these hedge fund guys at Alden?
They are creating a modern feudal society.
Back here in Chester County our local paper has been eviscerated and disemboweled by Alden. The same thing has happened in surrounding counties. When the last editor of The Daily Local retired, I figured it would only get worse and it has. It’s a woman who I think was from the Times Herald which is Montgomery County and Norristown.
A woman is more than capable of being an editor of a newspaper, but my point is now the editor for our local paper is pretty far removed from us even regionally. And who knows how many newspapers she is now responsible for? She just trying to make a living, but she doesn’t know our area, and to the hedge fund overlords that doesn’t matter anyway where we are. It never has.
All I know is our local newspaper, which used to have a bustling newsroom has two reporters. And they can’t even actually cover a lot of the news which occurs part of that is because they are only two people, and the other part of it is, I think they are seriously micro managed from doing their jobs. As in most of the real news is soft-pedaled, if it makes it to the paper at all, and that’s an ownership top-down decision. This, of course makes me wonder what kind of insurance these newspapers now carry under vulture, hedge fund ownership?
I used to be familiar with quite a few of these newsrooms. And the reason was I knew a lot of people that worked for these papers, including the editors, and some of the editors of these local papers were writing mentors, like the late Tom Murray, whom I still miss. I met Tom when he came in to run Main Line Life/Main Line Media News. His last paper before his death was for a short time, The Daily Local News.
LACKAWANNA COUNTY
Times-Shamrock selling off its newspaper group
The sale includes four local daily papers and several weekly and periodic publications.
Author: WNEP Web Staff
Published: 12:36 PM EDT August 31, 2023
Updated: 1:47 PM EDT August 31, 2023
SCRANTON, Pa. — The company that owns several local newspapers is selling off its newspaper group, according to a story published on Thursday.
Times-Shamrock Communications is selling the company’s four daily papers — The (Scranton) Times-Tribune, The (Wilkes-Barre) Citizens’ Voice, The (Pottsville) Republican Herald, and The (Hazleton) Standard-Speaker.
The sale includes weekly and periodic newspapers and commercial printing operations—Absolute Distribution Inc. and Times-Shamrock Creative Services.
The buyer, Colorado-based MediaNews Group, is owned by Alden Global Capital.
The sale does not include the Times-Shamrock’s radio or billboard operations, or the Scranton Times Building.
In April, Times-Shamrock no longer offered a print edition of its newspapers on Mondays, instead releasing a digital version on that one day of the week.
The decision was based on rising costs and changing demand from younger readers for electronic publications.
In 2021, the Times-Tribune turned over delivery of the daily paper to the postal service while it looked for new carriers in some locations.
The family that started Times-Shamrock—the Lynetts—have been producing newspapers since 1895 in Scranton. The sale marks the end of local control for the papers, a rarity in the newspaper business in recent years.
Members of the family issued a statement about their view of the sale:
Newspapers have been our family business for nearly 128 years. Since 1895, we have had the privilege of serving this community with local news, events and happenings. Today marks a very sad end to that legacy. Our family would like to express our gratitude to the loyal employees, readers and advertisers who have been with us all these years.
We feel it is important to express our personal dissatisfaction with the sale of Times-Shamrock newspapers to MediaNews Group, a subsidiary of Alden Capital. This was a transaction that we do not support or endorse. Alden does not reflect the business principles we feel are consistent with the stewardship of any newspaper.
The sale was driven by a majority of our shareholders. We understand the fears about our ability to remain competitive. We recognize the underlying concerns about the newspaper industry’s revenue and audience declines, and the desire of many of the shareholders to leave the painful decisions to cut costs, coverage and employees in someone else’s hands.
We have watched all of our beloved local newspapers in this region shrivel up and all but blow away. There used to be three local newspapers on the Main Line alone. they have gotten shriveled up into one which is also combined with a King of Prussia newspaper. It was originally the Suburban and Wayne Times and Main Line Times. Then came a 3rd paper, Main Line Life. Now that is one big homogenized ball of goo, and mostly press releases, passing as articles. I think there’s like one reporter now.
Now called the Main Line Times and Suburban, one of its lead local news stories was also the tarted up press release passing us a story out of West Reading. Somehow, I also don’t see the connection between Lower Merion and Radnor Township and Berks County.
I used to subscribe to both Main Line Media News and Daily Local. When I moved to Chester County, I let my subscription go for Main Line Media News and I used to read the paper online. The Daily Local like The Delco Times always seemed to have some sort of a pay wall – not at first, but that’s what it evolved into. So I wanted to support my local newspaper living in Chester County, which made me get a digital only subscriber to The Daily Local.
I had my Daily Local subscription for a few years. And then sometime around Covid, I had a bank card kited and I had to update 1 million things, including my newspaper subscription. I went into my Daily Local account and tried to update my information. It let me into my account, but it would not let me save my updated information and there was no one to call any longer because the hedge fund owners had also eviscerated like the local billing and subscription department. So I let my subscription lapse.
Since I let my subscription lapse, I just try to read the local articles I can catch on different browsers or an internet cache.
But fairly recently again, I’ve been getting solicitation calls. I have screen captured the number that called me twice recently within a couple of hours:
I remembered such calls a while back, and my spam call blocker knocked them off. But then I decided today that they were probably calling about the Daily Local so I called them back.
The first call was an obnoxious offshore woman on the phone who said she was from Minnesota. She didn’t like that I wasn’t giving her the information she needed so she could try to sell me my local newspaper, so eventually she grew frustrated and hung up. But since they had called me twice on August 21, I decided to call back a second time.
Miraculously, this phone call landed me in a call center actually contained within the boundaries of the United States of America. I had a very pleasant and normal woman to speak with and from her I learned that although this hedge fund can’t seem to pay to have more reporters covering local news, they apparently CAN pay for professional solicitation firms to solicit for them to get new subscribers or to gain back old subscribers. And sometimes I think maybe they do debt collection too but I’m not sure.
If you’ve ever looked at a nonprofit form 990 and checked out the expenses, when nonprofits employ “professional” or paid solicitation firms, you will see how expensive it is to actually have these people doing your business for you. I find it astounding that we no longer have newspapers with actual newsrooms let alone reporters and staff to run them, but they pay for this?
Alden Capital is killing our newspapers. Why are they killing our news sources really? I mean, I hate to sound like a conspiracy theorist, but I just don’t understand why these particular vultures started in on journalism?
According to Wikipedia:
Alden Global Capital is a hedge fund based in Manhattan, New York City. It was founded in 2007 by Randall D. Smith.[2] Its managing director is Heath Freeman
Interestingly, enough, Randall Smith had a brother in newspapers (also according to Wikipedia.)
His younger brother Russ Smithfounded the Baltimore City Paper and the Washington City Paper, which he sold for $4 million, and in 1989 founded the New York Press.[2]
Wikipedia has quite the interesting write up on Alden’s main man, including his years at the now defunct Bear Stearns.
https://en.m.wikipedia.org/wiki/Randall_D._Smith
Bear Stearns was an investment bank in NYC that kind of specialized in sleazy and Ace Greenberg’s paper clip memos. Once upon a time decades ago, I actually met Ace and his vice chairman. At that time I had been hired as an admin on one of the Bear Stearns trading desks. I was commuting from Philadelphia, like surprisingly many people do commute to New York from Philadelphia. I used to talk to these two little older guys on the elevator every morning and it ended up one was Ace, and the other was his vice chairman. Now I really liked talking to both of them. They were interesting, and I met some people at Bear Stearns who were wonderful, but overall the place was sleazy and if you wonder where they get the inspiration for investment bankers like you saw in the Wall Street movies or even the TV show Billions, look no further. Art does often imitate life.
I will note we all used to get these memos. They were distributed to everyone, and eventually ended up in a book called Memos From the Chairman. I actually used to own a copy. I actually used to have some of the original memos, but they got lost on a move. I lasted a little over a year at Bear Stearns. If you could last year at Bear Stearns, you could work anywhere. I was fascinated by how Bear Stearns worked, but seriously hated that job. The hours sucked, the majority of people were miserable, they had a wonderful cafeteria, because you could never leave for lunch, and mice would run over your feet on the trading room floors.
OK sorry I got off on a total tangent there. It was just a weird little trip down memory lane when I realized the guy that owns the hedge fun that is eviscerating all our local newspapers across the country came from Bear Stearns and all of a sudden that was like an epiphany or an Aha moment and it now makes perfect sense.
However, hedge funds and investment bankers shouldn’t be running our newspapers. They are only ever interested in news that makes them look good, so I guess it makes sense that they’re collecting them and destroying them since often newspapers and media don’t make hedge fun owners, and investment bankers look good.
And since investment bankers and hedge fund owners prop up political candidates and politicians on all sorts of stages, you can’t expect politicians to want to actually save our newspapers can you?
I hate to sound like a giant conspiracy theorist, but this is actually I think I conspiracy theory that has legs.
Is this all actually a ploy to get rid of the fourth estate?
The term “Fourth Estate” refers to the press and news media both in explicit capacity of advocacy and implicit ability to frame political issues, correct? So if hedge fund owners own newspapers and probably a bunch of politicians too after a donation kind of fashion, doesn’t this make perfect sense?
Maybe if we had more meaningful campaign finance reform, we’d also save more of our newspapers?
Well, that’s as far as this ramble is going for today. I would honestly love to be able to support local newspapers, but at this point if you do, it’s a catch 22 because you’re also supporting corporate raiders and investment bankers by lining their pockets because it’s not like they’re actually putting money into the newspapers is it?
Clark Kent and Lois Lane have left the building. At least definitely in West Chester, because why are the newspaper building once stood are ugly condos.
As long as hedge funds own local newspapers, the future of journalism is grim.
Thanks for stopping by.
I grew up in the area, and the Haas family are amazing and wonderfully inclusive generous people who thought enough to want their land preserved for all to enjoy.
Chair, Director of the Center for Sustainable Communities. Sadly, years ago I helped her get elected to school board in the first place)
