Newsrooms across the Tribune Publishing newspaper empire are growing anxious as the standstill agreement that has kept cost-slashing hedge fund Alden Global Capital from increasing its stock holdings gets set to expire next week.
The widespread speculation is that Alden, headed by Heath Freeman, will take advantage of the June 30 sunset to grow its 32 percent stake in Tribune by buying the 24 percent stake in the company now held by health care billionaire Dr. Patrick Soon-Shiong, owner of the LA Times.
That would transform the hedge fund company from the single-largest stockholder into one with a clear majority of the shares.
“Alden owns it in a few days,” predicted one industry exec who has worked with Tribune. “Soon-Shiong has no interest in being a white knight at Tribune,” the exec added. “He has his own problems at the LA Times. He’ll be happy to take the $80 or $90 million he can get from Alden and use at the LA Times, which is losing money.”
Alden is known for severe cuts at other papers it controls through its MediaNews Group and Digital First Media units, leading to predictions the same could happen at Tribune, whose papers include the Chicago Tribune, the New York Daily News and the Hartford Courant, if Alden gains control. “They will take out the carving knife,” predicted the executive. “They will cut some advertising and business, but those newsrooms will be shot in the head.”
Tribune has already expanded its board by two members to accommodate two additions affiliated with Alden: Dana Goldsmith Needleman and Christopher Minnetian. The two were voted in despite strenuous objections raised by the Chicago Tribune News Guild.
Separately, a local group headed by the Abell Foundation and the Goldseker Foundation has expressed interest in buying Tribune’s Baltimore Sun and turning it into a not-for-profit, but there’s no indication that Tribune wants to sell. The issue apparently wasn’t even raised at the company’s annual meeting earlier this month.
In Chicago, investigative reporters David Jackson and Gary Marx also have been trying to drum up interest from local business leaders to buy their paper and save it from further cuts., but there are no signs of substantive talks with the publisher.