On July 10, San Diego’s The Union-Tribune was sold to a newspaper publisher run by the hedge fund Alden Global Capital. If Alden’s history offers any indication, this business deal will have extremely detrimental effects on both the paper and the surrounding community.
Hedge funds are basically a collection of money that usually comes from wealthy investors who put it under the charge of a group of managers. To achieve high investment-returns, those managers invest in somewhat unique ventures. They may buy businesses, real estate, and currencies, as well as just plain stocks. Alden Global Capital is one of these, and is appropriately nicknamed “a vulture hedge fund,” and, “the grim reaper of American newspapers.”
This notorious hedge fund has bought many local media outlets around the country and runs them–intentionally–into the ground. The co-founders, Randall Smith and Heath Freeman, are known for being capitalist moguls who care only about making money, and not for the long-term health of their assets. After they acquire papers, they cut staff, sell real-estate, decrease the size of newsrooms, and raise subscription prices–effectively wringing cash out of the paper.
A notable example of this is the Vallejo Times-Herald, which was reduced to a single reporter, John Glidden, who was forced to cover the police force, schools, hospitals, government, businesses, and courts for months, after all other staff were let go. It was impossible to cover everything.
Eventually, Glidden too was fired.
All this is done to turn a profit and fund ventures in other areas of Alden Global Capital’s business such as risky bets on commercial real estate, a bankrupt pharmacy chain called Fred Inc., and Greek debt bonds to name a few.
This hedge fund has already offered buyouts to all of the Union-Tribune’s members. The editor and publisher of the paper, Jeff Light, left, along with many other staff members like the senior environmental reporter, investigative reporter with 33 years of experience, director of photography and video, and political and educational reporter. This bodes poorly for the future of the Tribune’s coverage. If Alden continues on the road it has taken with other publications, more names and titles are soon to depart.
The media is an extremely important part of our democracy, and the loss of these reporters signals a weakening of journalism, therefore threatening the entire system itself.
The media is the Fourth Estate, whose primary responsibility is to hold the government accountable. A robust, curious and unrestricted press is imperative to having a stable and free democracy. Someone needs to sniff out corruption and other information that those in power would prefer to keep hidden.
Journalists have a long history of doing this, and doing it better than anyone else.
A prime example of this is the 2006 “Clout on Wheels” investigation by the Chicago Sun-Times. This article was set in motion because one of the authors, Tim Novak, saw that four red dump trucks that the city hired were sitting idle for hours. From this curious situation, they exposed the city’s hiring of private truck companies, who paid hundreds of thousands of dollars to the campaign funds of politicians. They did this with the money they were paid by the city, letting politicians re-direct funds from the city treasury into their pockets. To top it all off, some of these companies and business people had connections to the mob.
Another example is the city of Bell, in Los Angeles county, that had a Pulitzer Prize article written about it by the LA Times because of the fraudulent money spending and the insane salaries of its governmental employees.
The town’s city manager, Robert Rizzo, had a salary of $787,000 annually. Keep in mind that Bell has a population of mostly foreign-born residents, and its median household income is about half that of the U.S. average.
The Pulitzer article, written by Jeff Gottlieb and Ruben Vives, incited an investigation, and eventually the dismantling of this corrupted government.
Another Pulitzer was awarded to a small Alabman newspaper, AL.com, for uncovering corruption in their police force. The small town of Brokside’s police force was aggressively policing and using made-up charges to extort fines out of people, all to increase the town’s revenue.
Newspapers serve to monitor power structures, and the paring down of their most useful parts creates a world where local issues and policies go shrouded in bureaucracy and ignorance. We as a community need to be aware of these, “vulture hedge funds,” even more so now that one of them owns San Diego’s biggest paper.
In the past, The Baltimore Sun formed a campaign to stop their paper’s selling to Alden. They put up a valiant effort, hiring a PR firm to run a campaign with reader forums, multiple editorials, and celebrity and politician endorsements, all trying to instill a sense of urgency into the public. However, most Americans didn’t care. All this eventually culminated in the loss of The Baltimore Sun to Alden. By understanding what Alden does, and how it can affect us, maybe next time journalists, like The Baltimore Sun’s, cries will be heard.
We need to worry about the Union Tribune. It has published so many important stories over the years, and with its new owner, that might just be a thing of the past.
