Vulture hedge fund can’t stop Chicago’s media ecosystem from thriving

When Alden Global Capital bought Tribune Publishing in May 2021 and slashed Chicago Tribune newsroom staff to bare bones, few media experts and Chicago journalists were surprised.  

“Years of poor management” at Tribune Publishing paved the way for Alden, said Brant Houston, professor and Knight chair in investigative and enterprise reporting at the University of Illinois Urbana-Champaign.

Two and a half years after Alden’s takeover, Houston and several Chicago media heavy hitters concurred that Alden’s ownership has rendered the once-storied, Pulitzer-Prize-winning Chicago Tribune less vital to Chicagoans and the Chicago media ecosystem. 

Meanwhile, they said, the rest of that media ecosystem is thriving.

Tribune Publishing: On shaky ground

At the time of the $633 million sale, Tribune Publishing owned the Chicago Tribune, The Baltimore Sun, New York Daily News and a slew of major East Coast metropolitan papers.

Prior to the sale, news executives and journalists had come to know Alden as a  “vulture” hedge fund that swoops in on financially unstable media companies, decimates newsroom staff through buyouts or cuts, and sells company assets, all with an eye on profits and, media experts say, no intention of building stronger newspapers.

“They don’t buy them up because they’re planning for the future,” said Houston, a board member for nonprofit news service Block Club Chicago. He added that Alden is not the first or only hedge fund to invest in media, but “they just make [their intentions] very clear…and they accelerate.”

Greg Pratt, Chicago Tribune investigative reporter and president of the News Guild union at the time of the takeover, called Alden the “dirt worst in terms of only caring about making a profit and not even paying lip service” to journalism.

The result for Chicago news coverage: The Chicago Tribune lost 22 percent of its newsroom staff and star columnists Mary Schmich, John Kass, Heidi Stevens and Eric Zorn through buyouts and cuts. Remaining staff are spread thin,  which can undermine their ability to produce well-grounded reporting that holds public officials and corporations accountable.  

Weak leadership paves way for Alden 

Alden’s media empire, which it controls through its MediaNews Group subsidiary, includes about 200 newspapers worldwide. The company’s purchase of Tribune Publishing arguably placed it on equal footing with Gannett, the largest United States newspaper chain.

Leading up to Alden’s takeover, Tribune Publishing and its predecessor, Tribune Co., experienced several leadership changes that weakened its position in the Chicago media market. Real estate tycoon Sam Zell’s ill-fated 2007 takeover of Tribune Co. forced the media conglomerate into bankruptcy. After Chicago investor Michael Ferro bought the company in 2016, he gutted staff through layoffs and buyouts while paying executives more. Ferro stepped down as chairman in 2018 amid sexual harassment accusations regarding his conduct outside Tribune Publishing. 

As leadership fumbled, Alden strengthened its foothold in Tribune Publishing: Prior to the Tribune purchase, the hedge fund was Tribune’s biggest shareholder, with a 32% stake. Its founder, Randall Smith, and two of its directors sat on the Tribune board. 

By the time Alden submitted its bid to purchase Tribune, the company “was at the mercy of a series of defective owners and management that didn’t understand Chicago’s audience,” said Tracy Baim, co-founder and majority owner of Windy City Times and past publisher of Chicago Reader. 

Fernando Diaz, a former editor of Tribune Media Group’s Hoy, the now defunct Spanish language paper, agreed. 

“By the time you get to Alden…[Tribune] has survived a lot. It lost the Cubs, it sold the Tower, and what you end up with is the paper,” said Diaz, also a former editor and publisher of Chicago Reporter and now a Newspack account executive.

Diaz said the series of leadership changes at Tribune haven’t been good for the long-term sustainability of the company or the Chicago Tribune. But he’s not ready to demonize Alden. 

“At the end of the day, at least they were…willing to keep the lights on. They were the next ones in line and currently keeping it running. They could have done worse — they could have lost more journalists,” he emphasized.

Pratt had harsher words for Alden, citing its recent cut of its 401(k) match for editors and non-union staff. 

“The Chicago Tribune has had bad ownership since 2008, and now we have the worst ownership,” he said. But, he added, the paper has retained a cohort of strong newsroom staff. “So it’s a terrible place to work from a corporate perspective but a great place to do the work.”

Alden Global Capital’s website contains a landing page with the name of the company but no contact information. Phone numbers located through Google searches were nonworking.

Calls  to media relations at Tribune Publishing were not returned.

No threat to Chicago’s long-thriving local media ecosystem

Chicago’s media landscape has a national reputation as “a petri dish for the reinvention of news media.”

That reputation is rooted in the city’s long tradition of community-focused and nonprofit newsrooms. 

Baim, who founded the Chicago Independent Media Alliance when she was Chicago Reader publisher, pointed to La Raza, founded in 1970 and arguably Chicago’s most recognized Spanish-language newspaper; the 118-year-old Black-founded-and-operated Chicago Defender; and LGBTQ newspaper Windy City Times, founded in 1985, as examples. 

Baim and former Chicago Tribune metro editor Mark Jacob also cited recent digital startups like TRiiBE and the journalist training ground City Bureau, as well as Injustice Watch, as newer players in Chicago’s vibrant media landscape. 

“Because of the weakening models of traditional media, there has been lots of experimentation,” Baim emphasized. “There are a lot of great pieces out there being cobbled together to make a future for media here.”

Two such projects that have caught the attention of both local media supporters and national media experts are Block Club Chicago, a subscription-based neighborhood news service launched by former DNA Info Chicago staff after then-owner Joe Ricketts shut down all DNA Info outlets when staff voted to unionize, and Chicago Public Media’s (CPM) 2022 acquisition of the Chicago Sun-Times. 

Jacob called Block Club “just a fantastic local news operation [that] people are paying attention to.” Initially funded by a Kickstarter campaign, Block Club now boasts nearly 20,000 subscribers and has more than doubled its staff, which covers 35 Chicago neighborhoods.

CPM funded its purchase of the Sun-Times by raising $61 million from foundations and individuals and aimed at growing strong local news in Chicago. The result: an unprecedented partnership between the paper and local nonprofit news station WBEZ Chicago, and one of the largest nonprofit news organizations in the country.

CPM’s acquisition of the Sun-Times, Baim said, “was in many ways not a response to Alden but benefited from the fact that the Tribune was seen as in a compromised position because of Alden.”

Thinking outside the traditional media box to consider models like the CPM/Sun-Times acquisition could have inspired a much different future for Tribune Publishing, said Diaz. 

“If nonprofit news barons are looking around…for what to save…it’s instructive to look at BEZ’s assumption of the Sun-Times as a model,” he suggested. 

Diaz added the success of nonprofit, subscriber-based local news outlets like Block Club Chicago has perhaps quelled the rise of traditional papers like the Chicago Tribune.

 “The days of being the big, bad Trib are in the past,” he asserted. “Does it produce good journalism? Sure, every day. Does it produce singular journalism we might not get anywhere else? The reality is very rarely…it’s not the dominant force it once was because the ecosystem is richer now.” 

Jacob agreed. Today’s prolific Chicago media ecosystem “has definitely been in spite of Alden. I haven’t seen anything they’ve done to make journalism better in Chicago.” 

He said that Chicago’s rich bench of journalism talent is a formidable rival even for a vulture hedge fund.

“Chicago is too great a city with too many talented journalists to have its ability to cover news horribly diminished by Alden’s takeover.”

Diaz added that Chicago local media outlets have proliferated because they offer “real people” options for investing in news organizations that align with their values. 

“One key feature of sustainable media is to be able to convince and compel individual readers and donors as supporters of that journalism” he said. “If you gave me a choice of one funder for $50,000 or 50,000 funders for $1, I’d want the latter.”

Kathleen Hayes is a Chicago-based journalist.