Hedge fund founder Randall Smith and his wife gave $100,000 to the president’s 2020 joint fundraising committee

This article first appeared on Feb. 4, 2020, on the website of dfmworkers.org.

By Julie Reynolds

Feb. 4, 2020 – On a sweltering July afternoon last year, Sen. Elizabeth Warren unveiled proposed legislation aimed at making hedge funds and private equity firms more transparent and accountable. Continue reading “Hedge fund founder Randall Smith and his wife gave $100,000 to the president’s 2020 joint fundraising committee”

NewsGuild demands answers from Alden-backed members on Tribune’s board

Dec. 20, 2019 – The NewsGuild-CWA is demanding answers from two members of the Board of Directors of Tribune Publishing – directors who were appointed on the recommendation of Alden Global Capital, a New York hedge fund known as “the destroyer of newspapers.” Continue reading “NewsGuild demands answers from Alden-backed members on Tribune’s board”

Real estate sell-off and increased debt are possible outcomes of an Alden takeover

This article first appeared on the DFMworkers.org on Dec. 5, 2019.

By Julie Reynolds

Dec. 5, 2019 – One week after Alden Global Capital announced it took a nearly one-third stake in Tribune Publishing, the New York hedge fund appears positioned for a full takeover of Tribune newspapers by next summer. Continue reading “Real estate sell-off and increased debt are possible outcomes of an Alden takeover”

NewsGuild-CWA Denounces Alden Stake in Tribune Publishing

FOR IMMEDIATE RELEASE: Nov. 20, 2019

Washington, D.C. – The purchase by Alden Global Capital of a 25.2 percent stake in Tribune Publishing is a source of deep concern for NewsGuild-CWA members.

“Alden has single-handedly hollowed out the news organization it controls,” said NewsGuild President Bernie Lunzer. “It has liquidated assets – both real estate and employees – solely for its own benefit and without regard to the effects of its policies on news reporting in towns and cities across the country,” he said. Between 2012 and 2019, Alden cut 71 percent of Guild-represented jobs at MediaNews Group newspapers (aka Digital First Media) it controls. Continue reading “NewsGuild-CWA Denounces Alden Stake in Tribune Publishing”

NewsGuild testimony to House Financial Services Committee

Nov. 18, 2019 – NewsGuild-CWA President Bernie Lunzer submitted written testimony to the House Financial Services Committee for its Nov. 19 hearing titled, “American for Sale? An Examination of the Practices of Private Funds.”

The testimony exposes the destructive role of Alden Global Capital, which controls Digital First Media.

“The hollowing out of local news is no mere inconvenience,” Lunzer notes. “Because of the draconian cuts, many local newspapers can no longer cover city meetings, community events, school board votes or high school sports. Recent research from the University of Illinois–Chicago and the University of Notre Dame found that communities that have become “news deserts” pay higher taxes and bond rates and are at greater risk of political corruption. Other studies show lower voter turnout and increased partisanship. In other words, when the watchdogs are gone, democracy dies. Private equity has helped kill the watchdogs.”

A Capitol Idea: Calling Out Hedge Funds

By Evan Brandt

July 24, 2019 – Sometimes, shouting into the wilderness gets results.

Last week I took a pilgrimage to Washington, D.C. to take part in a press conference announcing the introduction of the “Stop Wall Street Looting Act.”

To be clear, I had not read the proposed legislation and I was not there to endorse it

Continue reading “A Capitol Idea: Calling Out Hedge Funds”

A hedge fund stripped my paper for parts. Now, Elizabeth Warren has a plan to fight back.

This OpEd by Julie Reynolds was published by Newsweek on July 18.

July 18, 2019 – When I first became a reporter at the Monterey Herald in 2004, it was a feisty and robust local newspaper covering a midsize California county. We did what local news is supposed to do: We investigated sky-high water rates, exposed investment scams and held public officials to account.

Then the New York “vulture” hedge fund Alden Global Capital took over our chain, Digital First Media, in 2012. Since then, scores of papers across the country have been stripped for parts under Alden’s chop-shop approach to the businesses it touches.

It’s true that before Alden, we had layoffs and downsizing. But we also knew who our owners were. We knew they were in the news business and that they understood the ethics and responsibilities that go with running a newspaper.

Under Alden’s tenure, though, layoffs and attrition accelerated at breakneck speed. Instead of a story a day, reporters scrambled to crank out two or three because there were fewer and fewer of us. The office supplies vanished, and we had to buy our own pens, calendars and manila folders. Then the hot water in the bathrooms was turned off. The gutters were never repaired, and staff creatively arranged house plants to try to soak up the leaks. Then, as with most newspapers in the Digital First chain, the presses were dismantled and our buildings sold.

But far worse than the effect on workers was Alden’s effect on the communities we served. Entire towns in our coverage area became “news deserts.”

Our bureau closed in Salinas, the county seat and the largest city in the region. A towing scandal in the town of King City went unreported for a year—until half the police department was arrested—because we could no longer cover most of our county. Other papers in the chain also lost entire beats and sections, and the venerable Oakland Tribune shut down after 142 years in print.

Since I left the Herald in 2015, things have gotten even worse. Friends there tell me deadlines are now 2 p.m. because the paper is copyedited, designed and printed in a “hub” more than five hours away. This means City Council votes and even high school sports scores rarely make it into the print edition.

We’re just starting to see the effects of this deliberate downsizing. Some research shows that residents living in U.S. news deserts pay higher interest on municipal bonds, pay more taxes and may even experience more corruption in local government.

Like some other private equity firms, Alden has no interest in turning a struggling business around and appears to care little for the communities that are hurt when their watchdogs go away. Instead, it employs a strategy of stripping news organizations’ real estate and other assets, laying off staff at twice the national rate and profiting handsomely.

According to NewsGuild President Bernie Lunzer, “Alden has played a particularly destructive role in local journalism. Motivated only by greed, it has depleted newsrooms, eliminated beats, and made it virtually impossible for local papers to fully tell the stories of their communities.”

Whether we get our news on paper or a smartphone, Americans need and expect it to be gathered by journalist dedicated to informing the public. As more communities become news deserts, we’re seeing more and more opinion passing as news.

We are speeding toward an abyss of disinformation and ignorance, but it’s not too late to stop.

Hedge funds must be held accountable, and even more so when they control the news. When private equity buys a company to add to its portfolio, workers and communities are left in the dark. They don’t know who owns the company, don’t know how much debt was used to make the purchase or who is obligated to repay it. They don’t know who has responsibility for their successes or failures or who controls their pensions.

The Stop Wall Street Looting Act unveiled Thursday by Senator Elizabeth Warren of Massachusetts addresses these unknowns.

The legislation places limits on compensation to executives in companies owned by private equity and prevents big payouts when workers receive nothing during the bankruptcy process. It also gives priority to severance pay during bankruptcy. It eliminates the so-called “carried interest loophole” whereby the money extracted from both the companies they own and their limited partners is taxed at a low rate.

Most importantly, the Stop Wall Street Looting Act makes private equity ownership much more transparent. It directs the Securities and Exchange Commission to collect information. The names of general and limited partners will be known, as will the ownership percentages. The amount of debt used to finance the purchase will be known. The private equity firm’s other portfolio companies will be known.

Photo: Speaking at a press conference announcing introduction of the Stop Wall Street Looting Act, Julie Reynolds says hedge funds must be held accountable.

The Alden Global Capital Crazy Wall

In which we map Alden’s layers of shell companies to try to figure out who owns your hometown newspaper

This article first appeared on June 24, 2019, on the website of DFMworkers.org.

By Julie Reynolds

Almost every crime movie these days has a crazy wall. It’s one of those bulletin boards detectives put together while they’re trying to solve a crime, and they usually have lots of strings connecting people, places, companies and crime families.

You know, like the Avon Barksdale wall in The Wire

Continue reading “The Alden Global Capital Crazy Wall”

Alden President Heath Freeman and others may face subpoenas, depositions

This article first appeared on June 6, 2019, on the website of DFMworkers.org.

By Julie Reynolds

June 6, 2019 – The secretive business practices of Alden Global Capital, owner of the Digital First Media newspaper chain, will soon face scrutiny in a federal bankruptcy court, just weeks after Alden’s failed attempt to take over Gannett Co. Continue reading “Alden President Heath Freeman and others may face subpoenas, depositions”

Congress Dives Into Local News Crisis

This article first appeared on June 3, 2019, on DFMworkers.org.

By Julie Reynolds

June 4, 2019 – Legislative efforts to save local news continue in Washington after New York hedge fund Alden Global Capital’s failed takeover of the Gannett newspaper chain.

Sen. Sherrod Brown (D-Ohio) has vowed to “continue watching Alden closely.” Continue reading “Congress Dives Into Local News Crisis”