Photo of Chicago City Council chambers by Daniel X. O’Neil | Used under Creative Commons license
By Julie Reynolds
Declaring that “local news is vital to communities,” a Chicago Alderman has introduced a resolution calling on executives from hedge fund Alden Global Capital — known as America’s “destroyer of newspapers” — to appear before the City Council and answer questions.
Alden, infamous for stripping staff and resources from its own Digital First Media newspapers, recently acquired a 32 percent stake in Chicago-based Tribune Publishing. Almost immediately, Alden was able to get two of its associates seated on the newspaper chain’s board, a move quickly followed by a leadership shakeup that included the departure of Tribune CEO Tim Knight. along with mass staff buyouts and facilities consolidation.
On Wednesday, 19th Ward Alderman Matthew O’Shea introduced the proposed resolution, which urges Alden to “invest in Tribune Publishing and its newspapers so that they may more expansively perform their role in communities,” and to refrain from increasing its ownership interest in Tribune Publishing.
It also urges Alden to “consider in good faith any offers from outside entities that would return Tribune Publishing newspapers to civic-minded ownership.”
The resolution ends with a call to Alden to appear before the council’s Committee on Workforce Development “to fully address this matter.”
Alden appears poised to attempt a full takeover of Tribune this summer, when a contract prohibiting the hedge fund from acquiring more shares expires on June 30.
Late last month, Alden took a 5.9 percent stake in Lee Enterprises, just as Lee agreed to purchase Warren Buffett’s BH Media newspapers for $140 million. That deal is expected to close in mid-March. As part of the deal, Berkshire Hathaway will provide a $576 million, 9 percent loan to Lee to finance the purchase and to refinance its debt.
The resolution comes after the Denver City Council unanimously issued a similar proclamation on Dec. 23, authored by City Councilman and former reporter Kevin Flynn. That statement was issued out of concern for the Alden-owned Denver Post, and Alden’s “devastating effect on local journalism around the nation.”
O’Shea told DFMworkers that he got inspired to write the resolution after he “read a few articles about the topic and also read about a similar council resolution in Denver.”
He said the proposed resolution will now be assigned to a committee, most likely the Committee on Workforce Development.
“From there it would be up to the committee chair to put the resolution on an agenda and host a hearing on it,” he said. “At the hearing we would hopefully vote it out of committee and then it would return to the full council for a vote to pass out of the City Council.”
O’Shea said he hasn’t spoken at length with the committee chair, but added, “I would assume she would be very open to a hearing on the resolution.”
It wasn’t clear Wednesday when such a hearing might take place.
News of the proposed resolution broke early Wednesday on Twitter:
Wow. I am both floored and impressed to see an alderman stand up for something like this. Credit to O’Shea for doing his job.
— Stan Quail (@Stan_Quail) February 19, 2020
Here’s the full text of the Chicago resolution:
WHEREAS, The City of Chicago is committed to supporting local journalism, including fair economic investment in newsroom staffing and resources; and
WHEREAS, In November 2019, Alden Global Capital, the hedge fund described as a “destroyer of newspapers,” increased its stake in Tribune Publishing Company to 32%, making it the largest shareholder of the company; and
WHEREAS, Alden’s increased ownership in Tribune Publishing, which owns the Chicago Tribune, along with several other regional and local newspapers, is troubling because of its well-documented history of exacerbating financial problems by extracting short-term profits from already lean operations by dramatically slashing newsroom jobs and denying employees fair wages and benefits; and
WHEREAS, The U.S. Department of Labor is investigating Alden for taking nearly $250 million worth of employee pension investments and reallocating them to its own funds; and
WHEREAS, Twenty-one U.S. Senators, in a letter to Alden’s leadership, condemned the hedge fund’s “pattern of profiteering” and its “newspaper-killing business model” as “bad for newspaper workers and retirees, bad for communities, bad for the public, and bad for democracy;” and
WHEREAS, Local news is vital to communities; research shows that it generates economic benefits to society, leads to increased political participation, and assists in holding elected officials accountable; and
WHEREAS, Immediate support and a vigorously expressed appreciation for local journalism are imperative because in mid-2020, Alden may have the opportunity to increase its stake or gain control of Tribune Publishing; now, therefore,
BE IT RESOLVED, That we, the Members of the City Council of the City of Chicago, assembled this nineteenth day of February, 2020, urge Alden Global Capital to take the following actions:
- Invest in Tribune Publishing and its newspapers so that they may more expansively perform their role in communities; and
- Not seek to increase ownership interest in Tribune Publishing; and
- Consider in good faith any offers from outside entities that would return Tribune Publishing newspapers to civic-minded ownership; and
BE IT FURTHER RESOLVED, That we call upon Alden Global Capital to appear before the City Council’s Committee on Workforce Development to fully address this matter; and
BE IT FURTHER RESOLVED, That suitable copies of this resolution be transmitted to Alden Global Capital and to Tribune Publishing Company as a sign of our dedication to and support of this important issue.
Alderman, 19th Ward