Bust-out artists to destroy more local newspapers

I guess they’ll just have to do more with less:

The New York-based hedge fund Alden Global Capital – known for slashing its newspapers’ budgets to extract escalated profits – won shareholder approval Friday for its $633million bid to acquire the Tribune Publishing newspaper chain.

The purchase represents the culmination of Alden’s years-long drive to take over the company and its storied titles – including the Chicago Tribune, The Baltimore Sun, New York Daily News and major metro papers from Hartford, Conn., to Fort Lauderdale, Fla.

Alden’s reputation as a “vulture” fund had set off a frantic effort by union members in Tribune Publishing newsrooms. Their organizer, Baltimore Sun education reporter Liz Bowie, dubbed the effort “Project Mayhem.” The journalists tried to secure potential buyers in numerous Tribune markets who embraced the public-minded aspirations of journalism, including the Maryland philanthropist and hotel magnate Stewart Bainum Jr.

After a process marked by intrigue and whiplash, Alden dashed all those hopes. The hedge fund already held a 32% stake in Tribune. Alden’s founder, Randall Smith, sits on Tribune’s board, as do two other directors with close ties to Alden. Smith’s protégé, Heath Freeman, oversees Alden’s previous newspaper holdings and is the fund’s president. Both men keep low public profiles.

[…]

Former executives and news leaders in markets including Northern California, Denver and Connecticut sketched out ways in which Alden made recurring layoffs and buyouts a way of life. They said Alden’s cost-cutting measures made it much harder for journalists to expend the time and resources needed to hold public officials, corporations and other major players accountable through solid reporting.

In an audio recording obtained by NPR, Tribune Publishing Chief Content Officer Colin McMahon warned Chicago Tribune journalistsin February that Alden sought to nearly double profits at its newspapers. Those profit margins currently range from 10% to 13%, according to McMahon; he told staffers that Alden would want them to exceed 20%. (McMahon is also editor-in-chief of the Chicago Tribune.) That’s particularly daunting given that Tribune Publishing already has severely reduced head counts at its newspapers. The Baltimore Sun newsroom, for example, has some 80-odd journalists, down from 400 two decades ago. (I was a reporter at the Sun from 1994 through 2004.)

Suggestion to very rich Democrats: save that money you’re saving for your next vanity presidential campaign and use it to buy local newspapers and run them as nonprofits.