HEDGE FUND LOOKING TO BUY MORE PAPERS
Alden, known for cutting newsroom jobs, offers to buy Lee Enterprises
Hedge fund Alden Global Capital, one of the country’s largest newspaper owners with a reputation for intense cost cuts and layoffs, has offered to buy the local newspaper chain Lee Enterprises for about $141 million.
In a news release Monday, Alden said it sent Lee’s board a letter with the offer. It already owns 6 percent of Lee’s stock and is proposing to buy the rest for $24 a share. Alden says it does not foresee regulatory issues that could complicate a deal.
Lee stock jumped almost 27 percent to $23.40 Monday. The Iowa company’s spokesperson did not immediately reply to a request for comment. Lee’s papers include the St. Louis Post-Dispatch and the Buffalo News, along with dozens of smaller papers in more than two dozen states. The company had more than 5,000 full-time employees as of September 2020.
Alden scooped up the Tribune Publishing papers earlier this year in a deal that was bitterly contested by the Tribune company’s own journalists and community leaders in Tribune’s markets, who sought, ultimately without success, to find local buyers for papers including the Baltimore Sun and Chicago Tribune. Alden also owns the Denver Post, Orange County Register and Boston Herald.
Alden has a reputation for slashing costs, including selling off newspapers’ real estate, that go even beyond the newspaper industry’s overall turn in that direction.
The newspaper business has been consolidating as it struggles with a digital transition and shrinking revenues, and financial firms like Alden have taken an increasingly prominent role as owners. Newsroom jobs dropped nearly in half from 2004 to 2018, according to Pew Research, and the pandemic has exacerbated those stresses.
About one-fourth of the country’s newspapers have closed n the past 15 years, according to research from the University of North Carolina.
Alden said Monday that its offer for Lee is a “reaffirmation of our substantial commitment to the newspaper industry and our desire to support local newspapers over the long term.”
But local-news advocates take a different view of Alden and other financial firms’ ownership of local papers. “What we have seen in the past, especially with Alden, is that it has led to cuts in reporting staffs, and worse and worse coverage of communities in many cases,“said Steve Waldman, president of Report for America, an organization that places journalists in local newsrooms, including The Associated Press. “We should view this latest as a wake-up call. We just can’t keep accepting these mergers as if there’s nothing we can do abt them.”
Waldman called on the Justice Department to examine the deal for its impact on communities.
The Lee company significantly expanded in 2020 when it bought billionaire Warren Buffett’s newspaper chain from Buffett’s Berkshire Hathaway.