Media workers demand hedge fund transparency

Members of the The NewsGuild-CWA (TNG-CWA), the union that represents media workers, are asking those who support quality journalism to sign an online petition demanding that Alden Global Capital publicly disclose its investments, investors, and political contributions.

Alden Capital, owned by Randall Smith, is a hedge fund that profits by buying distressed companies cheaply, selling off their assets, and then reselling what’s left of the company, a practice that has come to be known as “vulture investing.”

Alden, which manages a number of private equity funds, some of which are based in foreign tax havens, has been active in buying newspapers facing financial difficulties and selling their buildings and other property such as printing presses.

These sales are cloaked in secrecy.

The newspapers purchased by Alden sometimes continue to publish but do so with diminished resources and fewer staff making it difficult to gather news, conduct investigative reporting, and serve as community watchdogs.

“Alden is one of the largest newspaper owners in the United States, yet it operates as a dark web of complex business structures to hide itself from public view,” said Bernie Lunzer, president of  TNG-CWA.  “Alden is laying off the very journalists who’d be reporting this kind of vital information to the public. We believe the public has a right to demand complete transparency about Alden.”

Alden’s biggest acquisition so far was its 2011 takeover of MediaNews, the second largest newspaper company in the US, after MediaNews declared bankruptcy in 2010.

At the time, MediaNews owned dozens of daily newspapers, including the Denver Post, Oakland Tribune, San Jose Mercury, and St. Paul Press, and some weekly newspapers, radio stations, and television stations.

After the purchase, MediaNews was merged with another company and rebranded as Digital First Media (DFM).

Once Alden acquired DFM, it began downsizing newsroom staff, outsourcing work, and selling the physical assets of the newspapers that it bought.

To help it sell its newly acquired buildings, many of which were and are valuable real estate located in city centers, Alden enlisted the help of Twenty Lake Holdings, a property management company that specializes in the management and sale of newspaper property.

According to newsmatters, a blog for DFM workers, Twenty Lake “has sold more than 125 properties in 23 states, worth a total of $230.2 million.”

How much of these sales were Alden-owned properties is not clear, but newsmatters reports that the two companies have close ties. Two former DFM employees, both of whom managed the company’s real estate holdings, are now the principals at Twenty Lake.

Like most of its business dealings, Alden is secretive about its relationships with companies such as Twenty Lake, and this secrecy makes it difficult to know how much Alden and its investors have gained from the sale of harvested newspaper assets.

Alden and Twenty Lake say that the purpose of these sales is to return value to investors and to produce more working capital for the newspapers themselves, so that they can do a better job of reporting the news, but it’s difficult to see how these sales have improved newspapers.

Take for instance the Oakland Tribune. The Tribune, a Pulitzer Prize winning newspaper, was one of the papers acquired by Alden when it purchased what was to become DFM.

On April 4, the Tribune ceased publication as a daily newspaper and became a weekly insert in a regional newspaper, the East Bay Times, the product of DFM’s decision to consolidate the newspapers that it owns in the East San Francisco Bay area.

As a result of the consolidation, 200 employees lost their jobs, and Oakland no longer has a newspaper with the resources to provide the kind of news coverage that a large metropolitan center needs.

“The Tribune just doesn’t cover the stories that need covering or tell people what’s going on,” said a former Tribune reader to newsmatters.

Those who remain working at the Tribune and other DFM owned papers are facing tough times.

Workers at 12 of those papers are members of TNG-CWA. At 11 of these papers, newsroom staff, many of whom haven’t had a raise in ten years, are working under expired contracts.

On June 17, union workers at the Denver Post said, enough is enough, and staged a demonstration in front the papers downtown offices.

The demonstration took place the day after a buyout offer expired. The buyout offer was made to reduce the Post’s newsroom staff by one-third.

If enough people don’t take the buyout offer, the Post could reduce staff by layoffs.

The Denver demonstration came on the same day that DFM media workers launched their campaign demanding investor and investment transparency from Alden.

“Alden can’t and shouldn’t operate in the shadows while it’s strip mining its newspapers,” said Sara Steffens, secretary-treasurer of CWA and a former DFM employee who was laid off from her reporting position at the Contra Costa Times. “Alden should invest in these highly profitable papers so that they can properly serve their communities.”

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