At Tribune Publishing’s annual shareholders’ meeting last week, two representatives of Alden Global Capital were elected to the board of directors, increasing the firm’s influence on Tribune Publishing. In November, Alden grew its ownership to 32% with the purchase of 11.5 million shares for $145.5 million, reports the Chicago Tribune. At that time, Alden agreed they would not expand their ownership to more than 33% until June 30, 2020. Billionaire Patrick Soon-Shiong, who owns the Los Angeles Times, is the second-largest shareholder with 8.7 million shares, or 24% of the company. He is also restricted from acquiring more stock until June 30.
Mason Slaine of Florida, who owns the third-largest stake in Tribune Publishing at 7.9%, voted against all six board nominees. He believes that the newspapers will be better served if they are sold to local investors in their respective communities. Slaine told Tribune he was not happy with the way the company was being run.
“As a shareholder, I think the company would be best served, and more importantly the communities would be best served, with local ownership,” Slaine said. “I don’t see that the centralization of Tribune is adding any value.”
Tribune Publishing owns The (New York) Daily News, The Baltimore (Maryland) Sun, The Hartford (Connecticut) Courant, The Orlando (Florida) Sentinel, The (South Florida) Sun-Sentinel, the Daily Press (Virginia), The Virginian-Pilot (Virginia) and The Morning Call (Lehigh Valley, Pennsylvania). In January, two investigative reporters, David Jackson and Gary Marx, for the Chicago Tribune were hoping to find local investors to take over the newspaper.
In their January 19 op-ed, “Will the Chicago Tribune Be the Next Newspaper Picked to the Bone,” they voice their concerns about Alden’s plans. Here is an excerpt:
“Alden’s strategy of acquiring struggling local newsrooms and stripping them of assets has built the personal wealth of the hedge funds investors. But Alden has imposed draconian staff cuts that decimated The Denver Post and other once-proud newspapers that have been vital to their communities and to American democracy. Those newsrooms, which put a spotlight on local political corruption, have served as forums for community voices and have driven the coverage of regional television, radio and online outlets,” wrote Jackson and Marx.
In January 2020, Tribune offered voluntary buyouts to employees at nine of its papers. In April, Tribune Publishing announced it would furlough some of its staff to offset declining ad revenue. Non-union employees making between $40,000 and $67,000 per year would take one-week furloughs from May to July. Non-union staff making more than $67,000 would take pay cuts of up to 10%.
“The COVID-19 pandemic is a crisis unlike anything we have seen in our lifetimes. These are uniquely challenging times for our own health and well-being as well as for the global economy and the businesses in our communities. Through these tough circumstances, we continue to create meaningful journalism and foster relationships between our advertising partners and our readers,” Terry Jimenez, Tribune Publishing CEO, said.
“Despite strong readership and engagement to the work we are doing, the current business climate poses challenges for everyone. Along with most of our industry peers, we are experiencing a negative business impact as a result of the pandemic. This is particularly true in our print advertising business, where most of the local businesses that we normally partner with are effectively shut down. In the wake of these revenue declines, we must take drastic actions to better position ourselves for the future. To offset these sharp declines, we must reduce costs,” continued Jimenez.
In other news, on May 19, Tribune Publishing postponed its first quarter report for fiscal year 2020 to June 5. It was originally scheduled for May 22.
“The company requires additional time to assess the valuation of certain assets and determine if a non-cash impairment charge is required, primarily as a result of COVID-19 pandemic,” said Tribune Publishing in an announcement.
There is a lot more to this story than just the election of two directors or pay cuts and furloughs. Alden Global Capital has earned a reputation for slashing staff and drastically cutting costs to boost profit margins. Their eye is on the profit prize, not on the communities that Tribune Publishing serves. Their latest moves take them one step closer to overtaking Tribune Publishing completely at the end of June. This spells disaster for the nine newspapers the company owns, their employees and those who want and need quality, local journalism