Reply critiques “distortions, misrepresentations, and patently false claims”
READ the Guild’s letter to Senators Duckworth and Durbin here
By Julie Reynolds
In late March, Heath Freeman, whose hedge fund Alden Global Capital owns the country’s third-largest newspaper chain and is hankering to take over the Tribune Publishing empire, broke his normal silence to respond to questions from Illinois Sens. Dick Durbin and Tammy Duckworth
Apparently alarmed about an Alden takeover of the Chicago Tribune and other papers, Duckworth and Durbin had sent a letter to Freeman to ask about the following:
- Alden’s “lack of transparency surrounding its investors”
- Whether Alden intends to “push for additional staff layoffs at Tribune”
- Whether Alden can “provide an example of a journalism investment that has not resulted in mass layoffs and/or newspaper closures?”
- What specific steps Alden will take “to protect freedom of the press and ensure that communities served by Tribune Publishing continue to have access to fact-based, timely reporting?”
Freeman’s response, dated March 27, was full of bluster and claims that the hedge fund was saving, not destroying, the newspapers in its chain, MNG Enterprises (also known as Digital First Media).
[NOTE: I published my annotated version of Freeman’s letter here.]
Then, just days after Freeman told the senators that Alden had never shut down a daily paper, it shuttered two local papers it had just acquired.
True, the two Minnesota papers Freeman shuttered were weeklies, not dailies, so perhaps he was carefully splitting hairs when he made his statement. But he clearly was implying that, unlike some other national chains, Alden protects and preserves newspapers rather than shuttering them.
But, in fact, on April 30, Alden permanently shut down Minnesota’s Eden Prairie News and Lakeshore Weekly News. Alden’s MNG Enterprises had just purchased 11 papers in the state.
The Eden Prairie News’s final editions, still available online, featured poignant stories like the commentary “A day in the life of a quaranteen,” as well as homespun features like “Veteran organization relocates couple before stay-at-home order,” and essential news like “Citizens drive home top legislative priorities at Eden Prairie town hall.”
Reporter Eden Teller, in a farewell column on April 29, wrote that “Eden Prairie News has been there for over four decades to chart (the town’s) progress, to hold a mirror up to its residents and show them who Eden Prairie was becoming … This city merits more than the occasional article in a statewide publication.”
“This chutzpah is extraordinary.”
— NewsGuild president Jon Schleuss
Turning papers around?
Now the union representing workers at more than a dozen Alden-controlled papers is challenging Freeman’s claims in a rebuttal addressed to the senators.
“Publicly available documents and news stories refute nearly every major claim in Freeman’s letter, which contains numerous distortions, misrepresentations, and patently false claims,” wrote Jon Schleuss, president of The NewsGuild.
“This chutzpah is extraordinary,” Schleuss wrote, after Freeman stated that Alden has a “successful track record of turning around and sustaining challenged newspaper businesses.”
Schleuss stated that “we cannot agree that (MNG’s) news operations have been ‘turned around’ unless these executives define the term by cutting newsrooms and ad sales staff by more than two-thirds, reducing page count and coverage areas, and displacing design staff with contract workers in the Philippines.”
Schleuss said Freeman displayed even “more chutzpah” when he stated that “MNG has never closed a daily newspaper during our ownership,”
“The 142-year-old Oakland Tribune and The Contra Costa Times no longer exist,” Schleuss wrote. “Both were daily newspapers. Digital First Media also closed three smaller daily newspapers – The Hayward Daily Review, The San Mateo County Times, The Alameda Times-Star, and The Fremont Argus also disappeared in 2016.
“The six dailies were folded into one paper, The East Bay Times. The combined newsroom staffing at these Bay Area papers shrank from roughly 148 NewsGuild-represented employees in 2012 to fewer than 45 today.”
“Let the company die”
Schleuss also questioned Alden’s understanding of the future of the news business, especially after it pushed the Gannett chain last year to “commit to a moratorium on digital acquisitions.”
“This opposition to aggressive digital work at Gannett either betrayed a gross ignorance of the trend in news publications or it was motivated by the simple assertion that it was better to reward shareholders now and let the company die,” Schleuss wrote.
The Illinois senators had asked Freeman about Alden’s private ownership structure and its numerous offshore entities. Senator Chuck Schumer of New York had previously sent a letter to Freeman asking why Alden’s investors were “shrouded in secrecy,” but Freeman did not reply.
He did, however, tell the Illinois senators that “there may be certain legal entities and organizational structures formed outside the United States (emphasis added).”
Schleuss wrote that Freeman’s response “is notable for its obfuscation… No uncertainty was necessary. According to ADV filings with the SEC, Alden has multiple funds outside the United States. Tax sheltered countries, like the Cayman Islands, can lower the tax impact for companies like Alden. They also protect these companies from the prying eyes of various stakeholders, including employees at MediaNews Group companies, who want to know who really owns their papers.”
The union’s rebuttal also noted that MNG has accelerated layoffs during the COVID-19 pandemic (when readership and community demand for news is sky-high), taking particular exception to Freeman’s claim that MNG Enterprises is “committed to ensuring communities across the country are served by robust, independently minded local journalism.”
Schleuss’s reply: “The fact that layoffs at MNG are twice the average in the news industry is a strange take on robust journalism and does not offer much comfort to those communities.”
READ Duckworth and Durbin’s letter here
READ Heath Freeman’s letter here