Request comes as Alden is poised to acquire Tribune Publishing
By Julie Reynolds
As New York vulture fund Alden Global Capital takes steps to take majority control of Tribune Publishing, The NewsGuild-CWA has requested a federal inquiry into Alden’s secretive offshore ownership structure.
Tribune publishes the Chicago Tribune, Orlando Sentinel, Hartford Courant, Baltimore Sun, The Virginian-Pilot and Daily Press, the Capital Gazette in Annapolis, The Morning Call in Allentown, and other daily papers. The News Guild represents 600 employees at Tribune newspapers, and 450 employees at Alden-owned MNG Enterprises, which publishes The Denver Post, San Jose Mercury News, East Bay Times, St. Paul Pioneer Press, the Boston Herald and others.
In a Feb. 3 letter to newly confirmed Treasury Secretary Janet Yellen, NewsGuild president Jon Schleuss urged the interagency Committee on Foreign Investment in the United States, chaired by the Yellen, to review Alden’s proposed takeover of Tribune in light of the hedge fund’s increasing ownership by unnamed “non-U.S. persons.”
“Now more than ever, the U.S. public’s access to reliable, credible news sources is critical to the national security of the United States,” the letter states.
Alden has long headquartered many of its investment funds in the Cayman Islands, an international tax secrecy haven, and its shares of both MNG and Tribune are held by shell companies there.
“In an era when foreign governments and non-state actors have sought to use news outlets to undermine the public’s faith in democracy and democratic institutions, it is more important than ever to scrutinize foreign investment in news outlets on which millions of Americans rely,” the letter states.
In fact, the percentage of Alden’s ownership by “non-U.S. persons,” as SEC filings describe some of the hedge fund’s investors, has increased dramatically.
In 2019, unnamed offshore investors beneficially owned about 39 percent of Alden’s $1.037 billion in assets under management. In 2020, with $764.7 million in assets under management, that percentage rose to 64 percent.
The letter notes that Alden “owns its stake in Tribune Publishing through two funds, the Alden Global Opportunities Master Fund and Alden Global Value Recovery Master Fund.” Both are based in the Cayman Islands.
As of 2020, 75 percent of Alden Global Opportunities Master Fund’s 36 beneficial owners were offshore, according to Alden’s SEC filings.
Alden Global Value Recovery Master Fund, the other shell company holding Alden’s Tribune shares, had 33 beneficial owners, 59 percent of whom were unnamed offshore owners.
“Despite Alden’s ambitions to control a greater share of the U.S. news industry, the company has refused requests by multiple United States senators to disclose whose money it is ultimately investing in outlets like Tribune Publishing and MediaNews Group,” Schleuss wrote.
Among those senators was Senate Majority leader Chuck Schumer, who in February 2020 sent a letter to Alden president Heath Freeman that said, “I am troubled by the lack of transparency surrounding Alden’s investors, which remain shrouded in secrecy.”
Although Freeman has apparently never responded to the New York senator’s questions, he did write back to Illinois senators Dick Durbin and Tammy Duckworth when, concerned about Alden’s looming acquisition of Tribune, the senators wrote that they were “disturbed by Alden’s lack of transparency surrounding its investors.”
Freeman refused to disclose who Alden’s offshore owners were, instead noting in his reply that “Alden has customary contractual confidentiality arrangements with its investors limiting its ability to disclose their identities or background information.” He stated cryptically that “all of the ultimate beneficiaries of the interests in the Alden investment funds are U.S. or EU persons.”
Alden began acquiring shares of Tribune Publishing in November 2019, and now holds a 32 percent stake in the chain – Tribune’s largest shareholder. It controls three of the company’s seven board seats. Last month, Alden proposed to buy the entire company from shareholders for a price experts consider low compared to the company’s value.
Alden already has left its stamp across the news chain’s operations — letting Tribune’s digital efforts flounder where other chains have thrived, shutting down newsrooms and offices after defaulting on rent, slashing reporter and other staff pay during the pandemic crisis, and being sued by shareholders — all while Alden’s officers on the board are handsomely rewarded for this “performance.”
Employees, community residents, and prominent elected officials have raised serious concerns that Alden will accelerate its decimation of the Tribune Publishing’s newsrooms and assets as it has at MNG Enterprises.
The union’s letter to Yellen is calling for a review by the foreign investment committee, “given Alden Global Capital’s reliance on non-US investors to acquire these newspapers.”
“If Alden wants to add major news outlets like the Chicago Tribune, Hartford Courant, and Baltimore Sun to its portfolio,” Schleuss wrote, “it should be required to explain whose money it is investing.”