Two more investors have stepped forward in a last-ditch effort to prevent hedge fund Alden Global Capital from taking control of Tribune Publishing, which owns the Chicago Tribune and eight other newspapers.
That’s welcome news to journalists and readers who are worried about Alden’s reputation for cutting newsroom staffs to the bone. Alden currently owns about a third of Tribune Publishing and has offered $17.25 apiece for the remaining shares, valuing the company at $630 million. The counteroffer, led by hotel magnate Stewart Bainum, is for $18.50 a share – a $650 million valuation.
On Saturday, the New York Times reported that billionaire Hansjörg Wyss had committed at least $100 million of his own money toward the effort, and would control the publishing chain’s flagship Chicago paper.
“I don’t want to see another newspaper that has a chance to increase the amount of truth being told to the American people going down the drain,” Wyss told the New York Times. “Maybe I’m naïve, but the combination of giving enough money to a professional staff to do the right things and putting quite a bit of money into digital will eventually make it a very profitable newspaper.”
On Monday, the Wall Street Journal reported that tech investor and minority Tribune shareholder Mason Slaine would also contribute $100 million to the Bainum-led effort, and would control the Orland Sentinel and Florida Sun Sentinel.
“I believe heartily in strong investigative journalism as a necessary part of creating a safe and honest society,” Slaine reportedly said in an email obtained by the Journal.
“We’re very encouraged to see civic-minded people pay attention and step up to help not just the Chicago Tribune, but other newspapers in the company,” said Gregory Pratt, president of the Chicago Tribune Guild. “I’m certainly hopeful that they will be able to pull off the deal, because as a general matter, Alden’s offer is a lowball offer. … Alden probably doesn’t want to go out that easily, but I don’t get the sense that these guys are afraid of a fight.”
David Jackson, a former investigative reporter at the Chicago Tribune who’s now with the Better Government Association, was part of an internal effort to find a buyer for the Tribune. That push included a New York Times op-ed, which potential Tribune owner Wyss cited in as partially motivating his decision to get behind the Bainum-led bid.
“Alden has a 10-year long record of extracting wealth from local newsrooms by eliminating skilled reporters, as well as crucial support staff who connect journalists to their communities.” Jackson said. “Alden has claimed that it is journalism’s savior and boasted that it’s not shut down any newspapers, and that’s technically true, but in my personal opinion that’s a really deeply misleading argument. Alden is squeezing out profits from papers by sometimes cutting them down to one lone reporter operating from his or her car. That leaves a ghost newspaper that’s unable to fulfill its watchdog mission.”
Charles Whitaker, dean of Northwestern University’s Medill School of Journalism, shared in the cautious optimism but said that the papers in the Tribune chain still have tough work ahead of them, even with a more civic-minded owner.
“The bottom line is that the business model for newspapers is broken,” Whitaker said. “Their traditional forms of revenue – display advertising, classified advertising – are gone. A subscription model is the model that everyone’s trying to build on.”
“The best examples we have of news organizations that have done well are the national organizations: the New York Times, the Washington Post, the Wall Street Journal to a certain extent, and they all have very, very deep pockets and could invest heavily in order to make those organizations vital and part of a national conversation. We don’t have regional examples of that right now,” Whitaker said.
Pratt agreed that news organizations face significant business challenges, but said he’s confident there’s a way to balance journalistic standards and profitability.
“Alden Global Capital has no interest in making sure that we have the best city hall coverage so that people who care about local government will subscribe. They want to make sure that at the end of the quarter, they wring out 25% profit no matter what happens with the actual reporting,” Pratt said. “Not only are the newspapers important for their local communities, but they’re also a good investment for somebody who wants to make money and do good for our society. I’m not surprised that someone is stepping up, but I’m very glad that they’re starting to take notice now before it’s too late.”
A spokesperson for the special committee of the Tribune Publishing board evaluating the sale declined to comment. Alden Global Capital did not respond to a request for comment.