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Hedge Fund Buyout of Tribune Puts More Journalism Jobs at Risk

10 Jun, 2021

Here at NPQ, we have regularly tracked two stories regarding local journalism. On one hand, there is a growing trend of layoffs and a hollowing out of local news. Last March, Tom Stites noted in NPQ that “a quarter of all US newspapers have failed since 2004.” At the same time, Stites himself is part of a rising movement of nonprofit or, in Stites’ case, co-op forms of local journalism that are creating a new more civically minded form of journalism that provides communities with the information they need.

Which trend will prevail remains uncertain, but Alden Global Capital’s May 21st purchase of Tribune Publishing for $635 million ($17.25 a share) was not a good day for local journalism. As Katie Robinson of the New York Times observes, the sale “underscores the growing might of financial firms in a consolidating media industry. Investors, seeing opportunities to buy distressed assets at bargain prices, have swooped in over the past decade, with plans to make money by drastically cutting costs, laying off workers, combining operations, and selling off real estate holdings.” Alden is now the second-largest owner of newspapers nationally, trailing only Gannett.

...Already, steps to strip cash from the business and lay off staff have begun. The Associated Press reports that Alden “wasted little time installing new leadership and saddling the newspaper chain with $278 million in debt it took on for the acquisition.” The new owners also are seeking to reduce staff levels by encouraging employees to accept a voluntary buyout. According to Keith Kelly of the New York Post, the buyout “provides eight weeks’ severance for all staffers with three years or less of service. It provides 12 weeks for staffers with four or more years and then one additional week’s pay for each year of service.”