The newspaper industry has struggled for most of the 21st century as the rise of digital media has cut deep into the revenue once generated by print advertising and kiosk sales. At the same time, Facebook and Google have seized a large amount of digital advertising revenue, effectively blocking the industry from one of its traditional sources of money.
About a quarter of the newspapers in the United States, mostly weekly newspapers, were closed between 2004 and 2019, while about 50 percent of the newspaper posts were eliminated. Hedge funds, however, view newspapers as a possible bargain. With a strict management style that often meant job cuts and reduced coverage of local news, they were able to make it profitable.
In the process, they often angered their employees. Journalists at The Denver Post, a daily newspaper controlled by a media company Alden, were muted in 2018 by publishing a special section of opinion pieces that exploded the hedge fund, comparing its executives to a vulture capitalist. Alden had earlier ordered The Post to cut 30 jobs from a news agency that had up to 100 editorial staff because they had already lost a significant number of journalists due 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 School of Journalism, said Alden’s record is not good for Tribune Publishing newspapers control can not fall.
“Based on the model Alden has used so far, it’s a shrinking industry without a significant investment for the future of newspapers,” she said. “One of the problems with these big chains is that they disconnect, journalistically and economically, from the communities that serve the newspapers.”
Some journalists working for Tribune Publishing articles – including The Orlando Sentinel and The Hartford Courant – have tried to persuade wealthy benefactors to step in before the hedge fund could get more shares. Last year, two Chicago Tribune reporters sent letters to Chicago lamps asking them to buy the newspaper. In Baltimore, journalists support the attempt to oust Mr. Bainum in The Sun.
Randall D. Smith, a perpetual Bear Stearns partner who runs Alden with Heath Freeman, sat on the Tribune Publishing board last summer. He was the third manager of Alden or affiliates to join the seven-member board. The other representatives of Alden are Dana Goldsmith Needleman and Christopher Minnetian.