The brash young executive behind the thousand cuts at your local newspaper
By Julie Reynolds
“What do all these people do?”
Heath Bradford Freeman, the 37-year-old New York hedge fund president behind the unprecedented downsizing at Digital First Media newspapers across the country, is by all accounts a driven man.
Former Denver Post reporter Robert Sanchez paints this picture:
“The few people willing to talk on background about Freeman describe him as aggressive and highly intelligent, ‘flinty-eyed and focused,’ and a man who has no real affinity for newspapers. Freeman is said to be the kind of person who makes a demand, listens to the counterpoint, and then reasserts his demand.”
To say he has no affinity for newspapers puts it mildly.
“In taking a more active ownership role,” writes the Harvard Nieman Lab’s Ken Doctor, “Alden’s Heath Freeman has been asking a key question: ‘What do all those people do?’ So DFM editors now draw up reports justifying what newsroom staffing remains.”
And what remains is precious little. As a co-founder and now president of vulture hedge fund Alden Global Capital, Freeman has overseen staff cuts of 36 percent in the past two years alone. He does this as the right-hand man of vulture capitalist Randall Smith, whom we’ve written about extensively.
Freeman has not responded to requests for comments or interviews. (It should also be noted that there’s another man named Heath Freeman who is a Hollywood actor.)
Sportswriter Nick Groke, who covers the Broncos for the Denver Post, called out Freeman last year in a poetic Twitter storm, describing him as “a worthless footnote on an otherwise grand timeline” and “the number one most-hated dude in the industry.”
The irony is Freeman comes from union stock.
His late father, Brian Freeman, was an investment banker whose clients included many labor unions, including one representing journalists and other workers at United Press International.
In the 1980s, the elder Freeman represented workers during major reorganizations, including Carl Icahn’s takeover of Trans World Airlines.
“When Brian M. Freeman, an investment banker, is negotiating a deal, he bluffs, he demands and, very calculatingly, he sometimes insults his adversary to gain the upper hand,” The New York Times reported shortly after the deal.
“I sort of bully people around to get the stuff done,” he acknowledged to the Washington Post.
Brian Freeman was described as a workaholic and a high achiever, with both a law degree and MBA from Harvard, plus a Master’s in tax law from New York University.
But it wasn’t Harvard or NYU that drew the young Heath Freeman’s interest as a potential alma mater. In fact, Brian Freeman’s three children chose a different route: they’re all graduates of Duke University.
The Duke Years
In 1992, Freeman was 12 years old when he watched a quintessential moment in basketball history on TV in the Freeman’s home in Short Hills, N.J. It was the Duke Blue Devils’ victory over Kentucky.
“I decided I wanted to go to Duke when Christian Laettner hit that crazy buzzer-beater shot against Kentucky in 1992,” Freeman’s older sister Amanda told the university’s student affairs website.
“I was a huge Duke fan, and I was watching the game with my mom, who also loved Duke,” Heath later told ESPN.
Heath loved his sports. At his bar mitzvah, he told Duke’s student affairs site, “I did have two of my favorite athletes at the time make appearances, (Yankee Second Baseman) Pat Kelly and (Giants Running Back) Rodney Hampton.” The theme for his celebration, he said, was the “not very original” Heath Bar.
He and Amanda would follow their older sister, Danyelle, now a food writer who graduated from Duke in 1995.
At Duke, Heath was a kicker on the football team and joined the Delta Sigma Phi fraternity. While he was a student, his parents became major funders of what would become the $3 million Freeman Center for Jewish Life. It had been “a stalled project,” before the Freeman backing revived it, according to Duke Magazine. Today, Heath Freeman serves as chair of the center’s advisory board.
While Freeman was still a senior at Duke, his father died at the age of 56. Freeman graduated in 2002 and a year later he followed his father’s lead, working in New York as an analyst at the Peter J. Solomon investment bank.
He did not, however, develop a long client list among labor unions.
In 2006, Freeman was hired by vulture capitalist Randall Smith at Smith Management, where he was “responsible for investing in value equities, emerging markets and distressed securities,” according to Bloomberg.
A year later, the two men joined forces on the 34th floor of Manhattan’s Lipstick Building, founding Alden Global Capital. Within a few years, that firm would become synonymous with the devastating impact of investment firms on the American newspaper.
By 2009 — a year when many Americans were stung by the recession — Freeman was living a lavish, Manhattan-penthouse life.
The Vulture Years
By 2009 — a year when many Americans were stung by the recession — Freeman was living a lavish, Manhattan-penthouse life, with sprawling digs on Central Park South and the West Village, in buildings where condos sell for up to $24 million.
According to public records, one of his most recent residences, at 150 Charles Street, is home to celebrities like Ben Stiller, Sport Illustrated model Irina Shayk and Jon Bon Jovi, who this year listed his four-bedroom apartment for $17 million.
Freeman also began investing in small businesses, often with sibling and friends. In 2011, Heath joined his sister Amanda in founding SLT Group Inc., a boutique fitness chain of nine studios in the New York area. Amanda Freeman, who is the firm’s CEO, says the name stands for “Strengthen Lengthen Tone.”
Meanwhile, among the distressed industries Alden took on was the news business. After several forays into newspaper chains, Freeman and Alden finally took the plunge and in late 2013 created a new company out of two bankrupt news chains it had acquired, Media News and the Journal Register Company.
The new firm was named Digital First Media. The name was a nod to the idea that news readers are increasingly going online, even though, as Ken Doctor points out, “the company has cut much of its technology staffing and development vital to being ‘digital first.’”
While DFM’s newsrooms and papers languished under draconian cuts, Freeman continued spending and investing.
“Heath Freeman has upped the pressure for greater profits and payouts to Alden.” — Media analyst Ken Doctor
Public records show that in 2013 he was listed as an executive at the newly founded Happy Mailman Dogs, a “very special dog boarding and daycare facility” in Austin, Texas.
He co-founded City of Saints Coffee Roasters, a “third wave” roaster, wholesaler and retailer now in Brooklyn, Manhattan’s East Village, and Hoboken.
Freeman also indulged in at least one pricy piece of sports memorabilia. In 2014, he paid nearly $120,000 for Christian Laettner’s basketball jersey — the one Laettner wore in that fateful game with Kentucky.
That was about enough money to keep a couple of reporters covering city hall for a year. At the time it was the second-highest price ever paid for a basketball jersey, but Freeman defended his splurge to ESPN. “It’s the equivalent of rare art to a former athlete,” he said.
By 2014, Freeman was named president of Alden Global Capital, as the reclusive, 73-year-old Smith began taking an even less visible role in the firm’s investments. Freeman’s name is the one atop the privately held Alden’s few SEC filings, and he has taken the reins of Digital First Media, leading its strategic review committee and serving on the compensation committee. In other words, he holds the purse strings.
Several reports say it was after Alden tried and failed to sell the news chain in 2015 that Freeman took on his greater role at DFM. And in doing so, he has set the tone for an even more austere future.
“Heath Freeman has upped the pressure for greater profits and payouts to Alden,” Doctor wrote in 2015.
That pressure has continued to mount in the two years since. DFM papers have been losing staff at twice the national rate, and The NewsGuild, which represents workers at 12 DFM papers, reports that in less than two years Alden has slashed staff at those papers by 36 percent — from 975 union employees to fewer than 620.
Despite this abysmal legacy, Freeman apparently sees Alden Global as a force for good. This past summer he brought two Duke football players to intern at Alden and learn the ways of vulture investing. Duke Athletics reported that one of Freeman’s goals was for the students “to learn about five businesses in different industries.” It wasn’t clear if Digital First Media’s struggling newspapers were among those businesses.
While the newspapers he manages struggle on with shrunken staffs — and the communities they serve are increasingly left without crucial coverage — Freeman has become the predominant force at Alden. Under his watch, the firm continues milking assets and profits from DFM, while its executives spend many millions on luxury real estate and make questionable investments.
At a cost of less than one of Freeman’s bad investments, 350 news workers could have kept working — and keeping their communities informed — for another five years.
After a near-hostile takeover of the Fred’s pharmacy chain earlier this year, Freeman was named chairman of the board. He brought DFM’s former chief Steve Rossi along for the ride, even though Rossi was a lifelong newspaper finance man. Rossi stepped down from DFM in late October, and is listed as a board member on Fred’s website.
The Fred’s investment continues to be disastrous for Alden. The firm paid $158 million for its stake, but as of Nov. 12, Alden’s 9.3 million shares are worth only $45.6 million — a loss in value of $112 million.
To put that in human terms: at a cost of less than Alden’s gamble on Fred’s stock, the 350-plus news workers lost in the past two years could have kept working — and keeping their communities informed — for at least another five years.
It shouldn’t be a surprise that Freeman shows little concern for the impact his decisions made from a Manhattan high-rise have in Macomb, Michigan or Kingston, New York or Pottstown, Pennsylvania.
“For years, Heath Freeman has operated in pseudo secrecy, a major achievement considering he’s a despised figure in an industry whose mission is to uncover the truth,” writes Sanchez, the former Denver Post reporter. “Few local journalists would know his face. He has never toured the Post newsroom, despite the fact that DFM is headquartered in the same building.”