Alden Global Capital to acquire Tribune Publishing for $630 million

CHICAGO — The newspaper publisher Tribune has agreed to be sold to Alden Global Capital, a hedge fund known for cutting costs and eliminating newsroom jobs, in a deal valued at $630 million.

Tribune Publishing Co., which owns the Chicago Tribune, the Morning Call in Allentown, the New York Daily News, the Baltimore Sun, and other newspapers, said Tuesday it has agreed to sell its shares to Alden for $17.25 apiece, in cash.

Alden became Tribune Publishing’s largest shareholder in 2019; it holds a 32% stake. The hedge fund owns MediaNews Group, one of the country’s largest newspaper chains; its papers include the Boston Herald, the Denver Post, and the San Jose Mercury News. MediaNews already owns several publications in Pennsylvania, including eight daily newspapers — the Reading Eagle among them — five weeklies, and two niche publications, according to its website.

The Baltimore Sun is not included in the deal. It will be sold to a nonprofit formed by businessman and philanthropist Stewart Bainum Jr. that will run the paper “for the benefit of the community,” the Sun wrote on Tuesday.

Bainum’s nonprofit Sunlight for All Institute will also acquire the Capital Gazette in Annapolis, the Carroll County Times in Maryland, and several other Baltimore-area weeklies and magazines.

The success of the Tribune deal hinges on securing the votes of biotech billionaire and Los Angeles Times owner Patrick Soon-Shiong, who owns about 24% of Tribune Publishing, and shareholder Mason Slaine, a former media executive who owns about 8%, according to the Chicago Tribune. Slaine and a representative for Soon-Shiong did not immediately respond to requests for comment on Tuesday.

Tribune said the purchase price represents a premium of 45% to the closing price of Tribune's shares on Dec. 11, the last trading day before the company received Alden’s proposal. Tribune's board has approved the deal, which is expected to close in the second quarter.

Tribune journalists have spoken up about their fears of Alden’s influence and control over their papers. Alden is known for slashing costs and shrinking newsrooms at the newspapers it acquires to squeeze out profits.

While Alden had been in talks with Tribune for months, news of the acquisition was met with disappointment by several Tribune newspaper reporters and union leadership, which had long been concerned about Alden’s approach.

“Absolutely terrible news,” tweeted Chicago Tribune reporter Gregory Pratt.

News Guild president Jon Schleuss called it “a terrible deal for the company, the workers, the shareholders and our democracy. Alden is only interested in extreme short-term profits by cutting everything to the bone. They have no long-term plan.”

“The Morning Call has had an incredible impact on the Lehigh Valley community,” said Tony Iannelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce. “I hope the new ownership group appreciates its incredible storied history and nurtures it going forward.”

In an email to Tribune employees Tuesday evening, CEO Terry Jimenez said he would work closely with Alden to ensure a smooth transition.

“Quality journalism has been Tribune’s driving principle throughout its history and will continue to drive our business well into the future,” Jimenez wrote.

The unions at Tribune papers have pushed for alternative buyers for the company’s papers.

Often, Alden’s newspapers have looked to shed real estate costs, something much of the Tribune chain did last year.

The Morning Call announced in August that it would permanently vacate its longtime home at 101 N. Sixth St. in downtown Allentown, though the newspaper set up a small service center in the building. The newspaper continues to publish, with its roughly 100 employees working from home amid the pandemic.

The newspaper industry has been consolidating as it struggles with a digital transition and shrinking revenues. Newsroom jobs fell by nearly half from 2004 to 2018, according to Pew Research. The pandemic has exacerbated those stresses. Tribune’s chief financial officer said in November that the company has been “aggressively” cutting costs during the pandemic, including furloughs, pay cuts and closing its newsrooms.

In a statement, Alden said: “Our commitment to ensuring the sustainability of robust local journalism is well established and this is part of that effort.”

This article includes information from the Morning Call and the Washington Post.