Feb. 22, 2018 – As negotiations for wage increases get underway, workers at 12 publications owned by Digital First Media (DFM) are escalating their contract campaign against Alden Global Capital, the New York hedge fund that owns the company and that has been systematically stripping newspaper assets since 2012.
In 2016, through a coordinated campaign, the workers won raises for the first time in a decade, and reached agreement to negotiate over additional increases in 2017 and 2018. Talks stalled in 2017 when management proposed a wage freeze, so in the current round of negotiations, Guild representatives are seeking increases for both 2017 and 2018.
Throughout its tenure in the newspaper business, Alden has persisted in imposing layoffs at DFM properties at an alarming rate. Between 2016 and 2017, the number of Guild-represented employees at the 12 papers has been cut by 40 percent, from 975 to 585. In January, management ordered a new wave of staff cuts throughout California and in suburban Philadelphia.
In February, the DFM Workers website reported that layoffs at DFM papers are part of a calculated strategy to extract maximum profits over the next two to three years “before shutting down or selling the chain.” The conclusion was based on an interview with Ken Doctor, a news industry analyst and publisher of Newsonomics. “There is no long-term strategy other than milking and continuing to cut,” Doctor said. “Their view is that in 2021, they’ll deal with that then. Whatever remnants are there, they’ll try to find a buyer.”
A Gamble
As Alden slashes staff and robs newspapers of crucial resources, it’s plowing the profits into dubious investments, including a gamble on Memphis-based Fred’s pharmacy that’s lost an eye-popping sum of more than $100 million in value. That amount would have paid for nearly 1,700 DFM jobs for a year, activists say.
Alden founder Randall Smith cashed in on his DFM investment by buying 16 Florida mansions one year after becoming the primary equity holder, and he seems intent on solidifying his hedge fund’s reputation as the worst owner in the newspaper industry.
Alden President Heath Freeman has spent his share of DFM profits on fitness centers, boutique coffee shops, and, for good measure, a Duke basketball jersey for which he paid $119,000 — enough to pay for more than two reporting jobs for an entire year.
NewsGuild members have been exposing the devastating effect of Alden’s slash-and-burn policies on local news coverage and journalists’ jobs: layoffs at twice the industry average, gutting the papers’ assets by selling buildings and equipment, and leaving entire communities without news coverage.
The exposés have been anchored by investigative reporting by Julie Reynolds, including an article published in The Nation, How Many Palm Beach Mansions Does a Wall Street Tycoon Need? Hint: As many as destroying America’s hometown newspapers can buy him and several articles posted on www.DFMworkers.org.
In October and November Guild members unleashed two separate two-day Twitter storms directed at Alden, business journalists, and other hedge funds participating in “good works” conferences. The concentrated tweeting garnered widespread attention.
Activists are urging DFM employees to support collective efforts for a fair pay increase. Stay in touch at www.dfmworkers.org and its related social media sites: @dfmworkers on Twitter, and www.facebook/dfmworkers.