Legislators examine proposed sale of Courant parent
A proposed bill would bar the Courant’s ownership from incurring debt or issuing dividends that are “not in the public interest,” provisions aimed at blocking hedge fund buyers from some of the vehicles used to wring cash out of newspapers, rather than invest in them.
The impending takeover of the Hartford Courant by a cost-cutting hedge fund, Alden Global Capital, was decried in testimony Thursday before a legislative committee weighing an unusual bill that would give the state a role in the newspaper’s finances.
Behind the legislation is a notion embraced by publishers in any other setting: Newspapers, especially one whose founding in 1764 predates the American Revolution, are institutions of public trust and benefit, even if privately owned.
The bill filed by Sen. Matt Lesser, D-Middletown, whose father once reported for the Washington Post, seizes on the fact that the Courant, owned by national newspapers chains since 1979, sought a business charter the General Assembly granted in 1887 and revised repeatedly, most recently in 1951.
“So there is a history of the legislature passing special acts about the corporate structure of the parent company of the Hartford Courant,” Lesser said. “That is different from me going in and saying, ‘I’m looking to manage the news operations of the publication.’”
The bill would bar the Courant’s ownership from incurring debt or issuing dividends that are “not in the public interest,” provisions aimed at blocking Al den from some of the vehicles used by equity funds to wring cash out of newspapers, rather than invest in them.
It would allow the attorney general or anyone who has subscribed to the paper for at least a year the legal standing to go to court and seek an injunction against Alden for financial moves not in the public interest.
Andrew Julien, the publisher and editor-in-chief of the Courant, and Chris Van De Hoef, the executive director of the association that represents all 17 daily newspapers in Connecticut, opposed the bill as a government intrusion at odds with the First Amendment.
“The founders understood that Democracy required a free and open exchange of ideas — and that the single greatest threat to that was the potential for government interference,” Julien said in written testimony. “Handing the Attorney General or Superior Court judges the authority to decide if a newspaper is acting in the public interest undermines that fundamental tenet, whether it be involving scrutiny of the newspaper’s editorial or business decisions. A press whose actions are subject to government review and action is not free.”
Alden is expected to close later this year on a $630 million deal struck to purchase Tribune Publishing, the publicly traded owner of papers such as the Courant, the Chicago Tribune, Orlando Sentinel, Baltimore Sun, and New York Daily News.
Lesser’s bill appears calculated to give Alden a reason to sell the Courant, should a white knight step forward to operate the paper as a non-profit, as has happened in Salt Lake City, Philadelphia, and is being attempted in Baltimore.
(The Washington Post reported this week that Stewart Bainum Jr., the potential buyer for The Sun, recently complained that Alden was trying to gouge him with fees, prompting him to say he might try to convince Tribune to sell him and their investors the whole chain.)
Indeed, Rebecca Lurye, a reporter who is the chair of the Hartford Courant Guild, cast her support of the bill as an element of a campaign to eventually put the paper in the hands of new, civicminded ownership.
“We believe ample community support exists to liberate the Courant from a hedge fund content to let it die,” Lurye said in written testimony. “We urge the legislature to do anything and everything in its power to protect and preserve this institution.”
Much of the testimony delivered Thursday, either live during a hearing conducted via Zoom or in writing, reflected the anger and fears over the rapid diminishment of American newspapers during the shift from print to digital publishing
Van De Hoef, of the Connecticut Daily Newspapers Association, acknowledged that the consolidation of the media, the cutbacks in staff and coverage, and the closing of newsrooms are troubling, but they do not justify Lesser’s bill.
“We believe that it’s an unconstitutional attempt to exert government influence over a free press,” he said.
Penelope Abernathy, a journalism professor and former senior executive at the New York Times, Wall Street Journal and other papers, gave the committee a succinct overview of the threats to newspapers like The C our ant and the dangers to civic engagement.
“Newspapers have historically been the prime if not sole source for most people of local news and information,” Abernathy said. “Newspapers have historically had many more people employed as journalists than any other medium. So we depended on them to cover the local school board, to cover the county commissioner meeting.”
Fraser Nelson, the vice president of business innovation at the Salt Lake Tribune in Utah, told the committee that a wealthy philanthropist, Paul Huntsman, was able to wrest that paper from Alden, then place it in the hands of a non-profit foundation. It was the first such transfer, though not the last.
She said Connecticut has its share of civic-minded people with deep pockets.
“And maybe a few of them are listening now.”