Move cements Alden’s bid for a Trib merger or takeover come July
NOTE: This story has been updated to include The NewsGuild’s response and reported comments from shareholder Mason Slaine.
By Julie Reynolds
Two directors chosen by hedge fund Alden Global Capital were given permanent board seats at Tribune Publishing’s online annual shareholders’ meeting Thursday.
Shareholders who attended said the meeting took less than 20 minutes, and only two shareholder questions – including one about the suitability of Alden’s nominees – were quickly answered by Tribune CEO Terry Jimenez and board chair Philip Franklin.
Shareholders were given one minute to vote, attendees said.
The NewsGuild, which represents workers at a number of Tribune papers as well at Alden’s MNG Enterprises, the nation’s third-largest newspaper chain, urged “no” votes for Christopher Minnetian and Dana Goldsmith Needleman.
The morning after the vote, 12 Guild units at Tribune papers and one Alden-owned paper issued a joint statement saying Tribune did not address a number of shareholders’ questions at the meeting.
“In the span of 17 minutes, with just one minute devoted to voting, shareholders consolidated Alden Global Capital’s power on the board, appointing two representatives of the reputed ‘destroyer of newspapers’ to the board while company executives declined to answer several questions from shareholder-employees about their vision for the company,” the statement reads.
Alden’s MNG Enterprises (also known as MediaNews Group or Digital First Media) is now poised to take over or merge with Tribune, which owns the Chicago Tribune, the New York Daily News, The Baltimore Sun, The Morning Call, the Hartford Courant, the Capital Gazette, The Virginian-Pilot, the Daily Press, the Orlando Sentinel, and other newspapers. Alden acquired nearly a third of Tribune shares in November but is prohibited from buying any more shares until after June 30.
Shareholders voted to keep Alden representatives Minnetian and Goldsmith Needleman permanently on the newspaper chain’s board, which now shrinks from eight to six members, increasing the percentage of Alden’s influence.
“Alden’s two hand-picked board members, Christopher Minnetian and Dana Goldsmith Needleman, lack satisfactory public board experience and have problematic track records,” the Guild stated in a May 4 letter to Tribune shareholders that was published on the Securities and Exchange Commission’s website.
“… The relationship of Mr. Minnetian and Ms. Needleman to Alden raises questions about their independence and whether they will put the interests of Alden ahead of other shareholders, not to mention readers,” the letter said.
Minnetian, the letter said, “bears considerable responsibility for and should answer for” Alden’s investment of nearly $250,000 of newspaper employees’ pension monies into Alden’s own funds, along with the “extraction of cash out of the news operations of MNG to fund outside activities, and the opaque disposal of MNG real estate.”
Goldsmith Needleman has been described as a personal friend of Alden president Heath Freeman and is a corporate real estate expert with little news media experience. She and Minnetian combined oversaw three companies that have gone bankrupt and left tens of thousands of people jobless — Hostess, Fred’s, and Payless ShoeSource.
In Friday’s response, the 12 Guild units listed the following questions that Franklin and Jimenez did not answer:
- They ignored questions concerning Minnetian and his actions at MNG Enterprises, including the diversion of balance sheet capital away from news and the investment of newspaper pension funds in Alden Global Capital funds.
- They did not answer the question as to why the company sought the permanent reduction of salary for employees while only temporarily suspending the dividend.
- They did not address the question as to why the company fought and refused to endorse the NewsGuild proposal that Tribune issue an annual report on the state of journalism at the company.
- They did not speak to a question on employee morale.
- They did not address the question of why newsroom investment is not part of their digital strategy.
- They did not answer a question on the quality of the company’s various websites.
- They did not address a petition signed by more than 5,000 Maryland citizens, legislators and business leaders calling on Tribune to return The Baltimore Sun to local ownership.
On Twitter, the Chicago Tribune Guild also posted a thread about the unanswered questions:
.@TribPub‘s annual shareholder meeting today lasted only 17 minutes — they had enough time to consolidate Alden Global Capital’s power on the board, but only answered two shareholder questions. Here are a few of the questions they didn’t find “relevant” enough to answer:
— Chicago Tribune Guild (@CTGuild) May 21, 2020
The second of the two shareholder questions that were answered at the meeting referred to the NewsGuild report, “The State of Journalism at Tribune Publishing,” released on May 18.
“Asked about the concern held by three quarters of survey respondents who believed that job cuts had degraded news coverage, Mr. Jimenez complained about the state of the industry,” the 12 units wrote.
At the meeting, Jimenez said the industry has been “going through significant changes” and said Tribune is focused on “the long-term prospects of the company.” He said the company aims to provide “the right value” to shareholders and communities. “There’s a balancing act,” he told shareholders. He added that Tribune has made a lot of progress on its digital transformation.
Earlier this year, Tribune’s board surprised many when it added the two Alden directors without a fight after the hedge fund became the company’s largest shareholder. Buyouts, pay cuts and unpaid furloughs quickly followed, and Freeman quickly “dispatched (Tribune) CEO Tim Knight and pushed forward with significant job cuts pre-COVID,” wrote Ken Doctor of Harvard’s Nieman Lab.
Amidst the cuts, the company announced in February it would pay a 25-cent dividend per share, netting a quick $2.88 million for Alden’s 11,544,213 shares. Tribune has since temporarily halted dividend payments, while staff pay cuts have been permanent.
Doctor has predicted that the two companies will make an announcement about their joint plans sometime before Alden’s “stand-still” agreement expires on June 30.
On Friday, the Chicago Tribune reported that shareholder Mason Slaine, who owns 7.9 percent of the company, voted against all six board members on the slate.
“I’m not happy with the way the company is being run,” he reportedly told the Tribune. “I voted no on everything.” The story said Slaine “believes the company should sell all of its newspapers to local investors.”
“As a shareholder, I think the company would be best served, and more importantly the communities would be best served, with local ownership,” Slaine told the Tribune. “I don’t see that the centralization of Tribune is adding any value.”