By Julie Reynolds
Saying their investments are “enabling the destruction of local news,” The NewsGuild-CWA is calling on two of the nation’s largest public pension plans to consider divesting from the private equity firm Cerberus Capital Management.
In letters sent Monday to the California Public Employees’ Retirement System (CalPERS), and the Pennsylvania Public School Employees’ Retirement System (PSERS), NewsGuild President Jon Schleuss wrote that Cerberus’s support of hedge fund Alden Global Capital has allowed Alden to destroy local news through its ownership of the MediaNews Group and Tribune Publishing newspaper chains.
Schleuss noted that Alden has “cut thousands of news jobs, thereby weakening local news coverage and depriving local communities of the information they need. It has shuttered newsrooms, invested employees’ pensions in its own funds, and otherwise engaged in a strategy to strip assets from its news holdings. “
Earlier this year, Schleuss wrote directly to Cerberus’s founder Stephen Feinberg. That nine-page letter, dated July 29, included several pages of citations and a long list of Alden’s “asset-stripping” actions that Schleuss said have “undermined news coverage critical to American democracy.” He asked Feinberg to make public the terms of the firm’s $218 million loan that enabled Alden to take over Tribune in May. The Guild’s previous president Bernie Lunzer also sent a letter to Feinberg stating similar concerns in 2019.
This week’s letters, dated Sept. 20, urge the public pension plans to “reconsider” their investments in Cerberus.
CalPERS, the nation’s largest public pension plan, has invested $2 billion with Cerberus, and PSERS isn’t far behind, with $1.6 billion. The Pennsylvania fund has recently been in hot water with both its members and federal authorities, and along with an Alden subsidiary called Twenty Lake Holdings is reportedly under FBI investigation.
Schleuss urged both pension funds to confront Cerberus and demand answers to the following questions:
- Will Cerberus make public the loan agreement with Alden Global Capital that made possible the latter’s acquisition of Tribune Publishing?
- Will Cerberus scrupulously enforce that agreement and terminate it if Alden is found in violation?
- Will Cerberus refuse further business with Alden Global Capital and Alden-owned entities because of Alden’s history of destroying America’s local news ecosystem?
- Will Cerberus issue a statement that supports local journalism and pledge to do all within its power to improve the health of local news?
Schleuss told CalPERS that its investment with Cerberus was “especially poignant” for California because Alden’s MediaNews Group operates 26 daily newspapers there, “and they have all been squeezed by Alden in the last eight years.”
In Pennsylvania, Alden runs five dailies. Both regions have been especially profitable for the hedge fund, according to reporting by media analyst Ken Doctor.
In the letters, Schleuss also noted that a Cerberus-owned company called Tier 1 trained members of the Saudi assassination squad that killed Washington Post journalist Jamal Khashoggi.
“With both Alden and Tier 1,” Schleuss wrote, “Cerberus is on the wrong side of the First Amendment.”