By Julie Reynolds

Heath Freeman has come out of hibernation. 

The co-founder of vulture hedge fund Alden Global Capital hasn’t spoken to the media in years. He never, ever returns journalists’ calls. When he’s been close to being deposed in lawsuits and bankruptcy cases, the cases seem to always get settled before deposition day. Public and private letters from Sen. Chuck Schumer, and another one from 20 U.S. senators have gone unanswered.

So it was surprising to learn that Freeman actually replied to a letter from Illinois Senators Dick Durbin and Tammy Duckworth asking about Alden’s intentions regarding its one-third stake in Tribune Publishing.

The letter, posted here, posed the following questions to Freeman:

  1. It is our understanding that Alden has agreed not to increase its stake in Tribune Publishing until after June. After this date, does Alden intend to increase its ownership stake with the goal of influencing newspaper portfolios or selling assets?
  2. Does Alden plan to push for additional staff layoffs at Tribune Publishing beyond the buyouts already offered? If not, will you commit to supporting current staff levels at Tribune Publishing?  Can Alden provide an example of a journalism investment that has not resulted in mass layoffs and/or newspaper closures?
  3. What specific steps will Alden take to protect freedom of the press and ensure that communities served by Tribune Publishing continue to have access to fact-based, timely reporting?

 The letter noted the senators were “troubled by reports that Alden is under investigation by the Department of Labor due to mishandling of pension funds…This raises further questions about Alden’s capacity to act in the best interests of workers and retirees.”

The letter also expressed concerns about “Alden’s lack of transparency surrounding its investors.  A recent filing with the Securities and Exchange Commission indicates that 80 percent of Alden’s clients are non-U.S. persons and that more than $830 million of Alden’s assets under management are connected to non-U.S. citizens.  Furthermore, Alden has domiciled significant funds in the Cayman Islands, a well-known tax haven that lends itself to corporate secrecy.”

The senators asked Freeman to respond by March 27.

Amazingly, he did.

The letter was first reported on by Dean Miller of the Seattle Times.

While the fact that Freeman responded has surprised the likes of the Harvard Nieman Lab’s Ken Doctor, I, too, have been wondering why he’s being so cordial in this case. Doctor speculates it might have something to do with the upcoming deadline (June 30) for Alden to merge with — or outright buy — Tribune Publishing. 

Regardless of motive, I felt some clarity regarding Freeman’s remarks was warranted. While it was hard to find a sentence in his letter that didn’t beg for some kind of annotation, I resisted highlighting the whole thing.

Here, then, is an annotated version of Heath Freeman’s letter to the senators. Annotated text appears in red. Just click the fact check bar after each paragraph to read the annotations.




Fact Check
One wonders why Freeman marked the letter “confidential” when the senators’ letter to him was quite public.

To me, this is the first indication this letter might have been written by lawyers and not Freeman. (Besides the fact that the letter keeps capitalizing the word “Letter,” which is a thing lawyers love to do.)

March 27, 2020

The Honorable Dick Durbin
United States Senate
711 Hart Senate Office Building
Washington, D.C. 20510

The Honorable Tammy Duckworth
United States Senate
524 Hart Senate Office Building
Washington, D.C. 20510

Re:  March 12, 2020 Letter to Alden Global Capital LLC 

Dear Senators Durbin and Duckworth,

We appreciate the opportunity to respond to your letter dated March 12, 2020 (the “Letter”), in which you requested information related to Alden’s relationship with Tribune Publishing Company (“Tribune”).

Alden is a significant investor in MediaNews Group, Inc.(1), (“MNG”) which is committed to ensuring communities across the country are served by robust, independently minded local journalism (2). Now more than ever, families across the country depend on their local news for timely, fact based reporting. As the on-going global COVID-19 pandemic highlights, reliable news and information is essential to ensuring the health and safety of our local communities.

Fact Check
1. Formerly known as Digital First Media. More about that later.

2. Oh, where to start with this one?

The word “committed” means here an unswerving dedication to this goal. Slashing newsrooms by 70% — more than twice the average of other papers – does not show commitment to those communities.

The term “robust” brings to mind a financially thriving operation that employs enough journalists to cover their community.

The senators asked Freeman whether Alden would push for further staff reductions at the Tribune after its recent (pre-coronavirus shutdown) round of layoffs. It’s worth noting here that Alden’s MNG newspapers have furloughed and laid off scores of employees at nearly all its papers. See this story for the latest numbers:

MNG’s goal is to operate newspapers in a sustainable and responsible way so that they will continue to exist successfully for the benefit of their local communities and shareholders (1) over the long term. Notably, all of MNG’s newspapers have editorial independence (2) in both their newsrooms and opinion sections. MNG’s talented team of seasoned newspaper executives have worked in journalism for an average of more than 30 years and have a successful track record of turning around (3) and sustaining challenged newspaper businesses.

Fact Check

1. Alden has clearly proven the benefit to shareholders, with profit margins of 16-20%, around twice what’s considered successful in the industry.

2. The papers are independent except when they report on Alden. (Freeman mentions “editorial independence” twice in this letter.) One Colorado editor, Dave Krieger, was fired after publishing a column critical of Alden on his own blog. At the Denver Post, opinion page editor Chuck Plunkett said he resigned because management wouldn’t let him keep publishing editorials critical of Alden’s impact on local news, while reporters in Kingston NY were warned not to write about Alden. See:

3. This remark is hard to fathom. Unless these executives define “turning around” by cutting newsrooms and ad sales staff by more than 2/3, reducing page count and coverage areas, and displacing design staff with contract workers in the Philippines.

Most of us define “turning around” a business as growing, expanding, thriving: “Turnarounds are important because they mark an upward shift or improvement for an entity after it experiences a significant period of negativity.” See

Given the extensive inaccurate media coverage (1) Alden and MNG have received, we appreciate the opportunity to clear up some common misconceptions. We have previously made the decision to focus on operating our business rather than arguing over errors (2) in media coverage. Perhaps we should have been more proactive (3) in setting the record straight and correcting coverage in order to have avoided the erroneous ways we are now viewed.

Fact Check

1. We assume he’s referring not just to, but also The Washington Post, The New York Times, The Columbia Journalism Review, the Poynter Institute, The Nation, Bloomberg News, NPR — oh, and the Alden-owned Denver Post.

2. Freeman never states what these errors are.

3. Because hiring the same spin firm that tried to help Johnson & Johnson recover from the Tylenol murders didn’t work? See:

MNG is one of the leading newspaper operators in the U.S. with approximately 200 publications (1) including The Denver Post, The Mercury News (San Jose), The Pioneer Press (St. Paul) and The Monterey County (2) Herald. MNG has never closed a daily newspaper during our ownership (3). Given the industry trends, including in your home state of Illinois, we think this is something to celebrate. Too often, MNG is the buyer rescuing newspapers like The Reading Eagle, The Greeley Tribune, The Boston Herald or The Orange County Register(4) from bankruptcy or liquidation or perilously close to that fate. Indeed, failing to equip local newspapers so they can adapt to the economic realities of the newspaper business in the 21st century would most certainly lead to more newspapers going out of business in your state and across the country.

Fact Check

1. This is odd — MNG lists only 98 publications on its website.

2. It was called the Monterey County Herald at one time but under Alden the name reverted to The Monterey Herald, because there were no longer enough reporters to cover the county.

3. This has to be one of the most disingenuous statements in this letter.

The argument has been made that a number of Alden’s SF Bay Area dailies and weeklies were “consolidated” into a new daily paper, The East Bay Times, while others became part of the (San Jose) Mercury News.

However you spin it, six shuttered papers have now become weekly “inserts.” Mastheads like the Contra Costa Times and the 142-year-old Oakland Tribune no longer exist. Also closed forever are the San Mateo County Times, The Fremont Argus, The Hayward Daily Review and the Alameda Times-Star.

Whatever technical definition Freeman is using here for “closed,” having two papers now where once there were eight looks like shuttering to us. And he apparently chose the word “daily” so he wouldn’t have to mention the shuttered weeklies.

Furthermore, the combined newsroom staffing at these Bay Area papers shrank from roughly 225 NewsGuild-represented employees in 2012 to fewer than 75 today.

This extremely reduced coverage has given rise to the term “ghost newspapers” that are only able to cover a fraction of what they once did.

And just days after Freeman sent this letter, MNG announced that on April 30, it will close the Eden Prairie News and Lakeshore Weekly News in Minnesota, two of 11 papers it recently acquired there.

4. Again, the term “rescuing” is apparently being redefined. Other companies were in the bidding to take over the Register. Immediately after purchasing all of the papers mentioned, Alden undertook draconian layoffs and quickly sold their real estate.

But that’s not all. At the Reading Eagle, for example, 19 jobs were eliminated this month, salaried workers had to take a 20 percent pay cut and remaining employees were cut from 5 days to 4. This was after Alden cut the Eagle’s staff by one third in January. Alden also just ordered unpaid furloughs at its papers in St. Paul, Macomb (Mich.), Boston, Denver and Kingston (New York).

Alden acutely understands that local newspapers in the U.S. are struggling (1), putting the important and vital role they play in our communities at risk. The documented reality is that tech behemoths such as Google and Facebook are devouring the advertising base that has traditionally supported newspapers. Based on analysis conducted at Pew Research Center, total print advertising revenue in the U.S. newspaper industry was estimated to have declined from $46.6 Billion in 2006 to $9.3 Billion in 2018, a loss of $37.3 Billion or an 80% decline. In that same period, total digital advertising revenue in the U.S. newspaper industry was estimated to have increased only $2.3 Billion growing from $2.7 Billion to $5.0 Billion. That equates to a total estimated loss of $35 Billion in total advertising revenue in the U.S. newspaper industry from 2006 through 2018. Unfortunately, digital advertising dollars are not near replacing the dramatic declines in print advertising dollars the newspaper industry is experiencing (2). The digital transformation of the U.S. newspaper industry is in its early stages. And if local newspapers do not reset to these economic challenges (3) they may cease to exist. As you may be aware, a 2018 study from the University of North Carolina found that the U.S. has lost nearly 1,800 local newspapers since 2004, or approximately one in five (4). Clearly, if local newspapers fail to adapt  to the economic realities they will continue to close.

Fact Check

1. This is accurate. Most of the advertising losses described here are well documented, as the letter notes.

2. Harvard Nieman Lab’s Ken Doctor writes that Freeman “has milked and milked MNG through its Digital First years, making sure that when it comes to investment in the product, it’s Digital Last.” See:

Yet other papers, like the Star Tribune in Minneapolis, are maintaining strong newsrooms while also making the transition to digital.

3. This statement is highly ironic, given that Alden years ago shut down DFM’s ambitious effort to actually be “digital first” (i.e. make a shift to online news).

Perhaps this is why Alden changed the company’s name from “Digital First Media” to “MNG Enterprises”?

More irony: When it tried to take over the Gannett news chain last year, Alden was also highly critical of Gannett’s push to move to digital, claiming it “was going in the wrong direction” and demanding the company “commit to a moratorium on the acquisition of any additional digital assets.” See:

4. This study was written by Penelope Muse Abernathy, who also noted in the same report that: “The higher margins posted by Digital First were the result of aggressive cost reductions at the newspapers, including multiple rounds of layoffs, and a lack of investment in both tangible assets, such as property and equipment, and intangible ones, such as wage increases to attract and retain talent. Reporters in two Philadelphia suburban newsrooms must work remotely because the Pottstown Mercury’s mold-infested newspaper building has been condemned.” See:

As you know, Illinois has already been deeply impacted by the loss of local journalism, with numerous publications closing or significantly reducing staff over the last decade. Just last November The News-Gazette in Champaign-Urbana laid off over 30 employees after Community Media Group bought them out of bankruptcy in August 2019, while The St. Joseph Leader and The County Star in southern Champaign County closed their doors permanently in August of 2018.  Moreover, in 2015 Gannett (formerly New Media) shut down The Murphysboro American, Galattia’s Money-Stretcher, and The Daily American of West Frankfort, IL ending nearly a century of providing local and national news to its residents. Attached for your convenience is a list of articles and publications detailing the significant issues facing the industry.

Alden is an active investor in the newspaper industry (1), and believes in helping local papers operate successfully over the long term (2). With our minority investment in Tribune, we seek to further our goals of supporting local newspapers, with a focus on ensuring that publications can operate profitably and sustainably. Alden is committed to local news coverage and to enabling local papers to serve their communities well into the future. As Alden is a minority equity holder of Tribune (holding 32%), it is critical to underscore that Tribune operates independently. As a result, Alden does not, and cannot, make decisions (3) regarding operations, selling assets, influencing newspaper portfolios, staffing, or facilities for Tribune. These decisions are made solely by Tribune. At this time, Alden has not made any decision regarding additional investments in Tribune (4).

Fact Check

1. Since Alden invested in Tribune, the company has launched buyouts and cut key executives who had a history of commitment to journalism, including Bruce Dold and Peter Kendall.

2. Again, define “success.” Or “helping” for that matter.

3. Technically, this is true. Alden can’t do this, but its representatives on the Tribune board can. Alden got Tribune to create two new board seats specifically for two Alden-chosen members, Dana Goldsmith-Needleman and Christopher Minnetian.

While it’s true that Tribune has downsized in the past, the timing of its widespread layoffs soon after Goldsmith-Needleman and Minnetian joined the board is worth investigating.

And if we look at other companies in which Freeman sits on the board, such as MNG newspapers, Fred’s Pharmacies and Payless ShoeSource, it’s clear that just a couple of Alden-sponsored board members can create a lot of havoc.

4. Freeman is referring here to the fact Alden is under a “stand-still” agreement not to buy any more Tribune stock until after June 30. Media observers have suggested Alden might attempt a full takeover at the time, although the Harvard Nieman Lab’s Ken Doctor has recently suggested Tribune might actually take over Alden.

In your Letter you stated that Alden is under investigation by the Department of Labor regarding Alden’s management of employee pension savings. The inquiry was closed by the Department of Labor and completed to its satisfaction. We appreciate the opportunity to reiterate MNG’s commitment to supporting the participants and beneficiaries of its employee pension plans.

Fact Check

This is news. Freeman gives no indication here what the result was.

He’s referring to the fact that Alden quietly invested several of its newspapers’ pension plans in two Alden funds — one based in the Cayman Islands — an act of alleged self-dealing that prompted a U.S. Department of Labor investigation.

An April 7 letter from NewsGuild president Jon Schleuss to Freeman and Alden co-founder Randall Smith shows the Alden funds only delivered around a 4% annual return, at a time when the S&P 500 Index was returning 15.8%, and the Vanguard Balanced Index Fund was returning 9.9% . Schleuss estimates the pensions missed out on “tens of millions of dollars” because of Alden’s decision to invest the pensions in its own accounts.

Read Schleuss’s letter:

With respect to Alden’s structure and its investors, Alden is located in the United States and is fully compliant with all relevant legal requirements as a registered investment advisor. As is typical in our industry, (1) there may be (2) certain legal entities and organizational structures formed outside of the United States. While Alden has customary contractual confidentiality arrangements with its investors limiting its ability to disclose their identities or background information, we can share that Alden is controlled by U.S. citizens. We can also disclose that all of the ultimate beneficiaries of the interests in the Alden investment funds are U.S. or EU persons (3).

Fact Check

1. He’s referring to the hedge fund industry, not newspapers.

2. Not “there may be” — there are. Alden has never disputed this, so the coy choice of words here is interesting. See Cayman Islands’ registry of corporations or read this:

3. Again, the senators’ point was we don’t know who these people are. Americans like to know who owns their news media.

All of this is to say we understand, given the depth and breadth of inaccurate media coverage, why you may be skeptical. We are heartened by the fact that, in reality, we share the belief that Americans need and deserve robust local journalism that operates with editorial independence.

Fact Check

Although he calls the media coverage “inaccurate” Freeman fails to cite any specific examples of errors, nor does he refute any of the reporting on and elsewhere. He also has not answered the senators’ questions in any detail, if at all.


Heath Freeman


READ: Letter to Alden Global Capital From Senators Durbin and Duckworth

READ: Letter from Jon Schleuss to Alden Global Capital re pensions