Two top investigative reporters for the Chicago Tribune made a splash on Tuesday by calling for Alden Global Capital — the controversial cost-slashing hedge fund that owns 32 percent of Tribune Publishing — to save the newspaper by selling to a local owner.
Not mentioned in the Jan. 21 New York Times op-ed, however, is that a doomsday scenario for Tribune publications like the Chicago Tribune could be less than six months away.
That’s because Alden has a standstill agreement that expires on June 30, after which it will be free to add to its current 32 percent stake. The second-largest shareholder, LA Times owner Patrick Soon-Shiong, also has a standstill agreement that expires that day, allowing him to sell his 24 percent stake.
Even with just a 32 percent stake, Alden is already making changes at Tribune, which also owns the New York Daily News, Baltimore Sun, Hartford Courant, Orlando Sentinel, Sun-Sentinel of South Florida, Virginian-Pilot and Capital Gazette.
Last month, it placed two new directors on the Tribune’s board: Dana Goldsmith Needleman and Christopher Minnetian. Both have limited media experience and spectacular bankruptcies in their past financial deals.
And cutbacks are already taking place. Timothy Knight, the chief executive of Tribune, recently told staffers he was offering voluntary buyouts to staffers at all Tribune papers in order to avoid making cuts. Most insiders worry involuntary cuts will follow.
“Alden’s strategy of acquiring struggling local newsrooms and stripping them of assets has built the personal wealth of the hedge fund’s investors,” wrote Chicago Tribune investigative reporters David Jackson and Gary Marx on Tuesday.
“But Alden has imposed draconian cuts that decimated the Denver Post and other once-proud newspapers that have been vital to their communities and to American democracy,” Jackson and Marx’s piece continues. “Unless Alden reverses course — perhaps in repentance for the avaricious destruction it has wrought in Denver and elsewhere — we need a civic-minded local owner or group of owners. So do our Tribune Publishing colleagues.”