March 13, 2020

U.S. Senators Durbin and Duckworth want answers from Alden over plans for Tribune Publishing

Source: Chicago Tribune


U.S. Sens. Dick Durbin and Tammy Duckworth sent a letter Thursday to Alden Global Capital requesting the New York-based hedge fund disclose its plans for Tribune Publishing after an ownership standstill agreement expires in June.

The letter, addressed to Alden President Heath Freeman, expressed concerns over the hedge fund’s “practices of mass layoffs” at other newspaper properties and a “lack of transparency” surrounding its investors, among other issues.

“We are deeply concerned that Alden Global Capital, with a history of dismantling local newspapers for personal gain, is now pursuing an alarming strategy of staff cuts at Tribune Publishing,” Durbin and Duckworth said in the letter.

Alden took a 32% stake in Tribune Publishing in November, mostly through buying the shares owned by former Chairman Michael Ferro. Two Alden representatives were added to the newspaper company’s board, expanding it to eight members, but Alden was restricted from increasing its stake in the company to more than 33% until June 30.

A voluntary buyout program offered throughout the company earlier this year was followed by changes in senior leadership at Tribune Publishing and a management restructuring at the Chicago Tribune.

“These are disturbing developments in Alden’s already troubling history of laying off experienced newspaper staff and stripping newspaper assets for profit,” Durbin and Duckworth said in the letter.

Launched in 2007, Alden owns about 200 publications through an operating company now known as MediaNews Group, formerly Digital First Media. The chain has come under fire for sweeping layoffs at its newspapers, including major dailies such as the Denver Post, San Jose Mercury News and the St. Paul Pioneer Press, as well as smaller weeklies.

Freeman did not respond to a request for comment Friday.

Durbin and Duckworth asked Alden to answer questions raised in the letter by March 27, including whether it plans to increase its stake and sell newspaper assets when the ownership standstill agreement expires June 30.

The Illinois senators also asked Alden to commit to supporting current staffing levels at Tribune Publishing, as well as outline steps it will take to protect freedom of the press and ensure local fact-based reporting.

Senate Minority Leader Chuck Schumer, D-N.Y., has been a vocal critic of Alden’s strategy of acquiring newspapers and cutting staff, and has written several letters to the hedge fund expressing concern about its control of the Tribune Publishing-owned New York Daily News.

Like Schumer, Durbin and Duckworth expressed concerns about a lack of transparency surrounding Alden’s investors. The senators cited filings with the Securities and Exchange Commission showing that 80% of Alden’s clients and more than $830 million of its assets under management are connected to non-U.S. citizens.

In addition to the Chicago Tribune and New York Daily News, Tribune Publishing owns the Baltimore Sun; Hartford Courant; Orlando Sentinel; South Florida Sun Sentinel; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.

By:  Robert Channick