Hedge fund Alden International Capital provided Monday to purchase newspaper chain Lee Enterprises for about $141 million, a lot to the chagrin of local-news advocates, the Related Press reported.
Lee Enterprises owns small, native papers in additional than two dozen states, together with the St. Louis Put up-Dispatch and the Omaha World-Herald.
Alden is without doubt one of the nation’s largest newspaper homeowners, having purchased Tribune Publishing earlier this yr. AP reported that Alden has a repute for chopping prices, layoffs and promoting newspapers’ actual property.
Within the Monday information launch, Alden, which already owns 6 p.c of Lee’s inventory, provided to purchase the remainder of it for $24 a share. The corporate mentioned its provide is a “reaffirmation of our substantial dedication to the newspaper trade and our need to assist native newspapers over the long run.”
Nevertheless, native newspaper advocates suppose otherwise. Steve Waldman, president of Report for America, a corporation that places journalists in native newsrooms, together with AP, requested the Justice Division to look over the deal’s affect on native communities. He advised AP the acquisition provide is a “wake-up name.”
“What now we have seen prior to now, particularly with Alden, is that it has led to cuts in reporting staffs, and worse and worse protection of communities in lots of instances,” Waldman mentioned. “We simply cannot preserve accepting these mergers as if there’s nothing we are able to do about them.”
For extra reporting from the Related Press, see beneath.
Lee inventory jumped 22 p.c to $22.59 Monday. The Iowa firm’s spokesperson didn’t instantly reply to a request for remark. The corporate had greater than 5,000 full-time workers as of September of 2020.
Alden scooped up the Tribune papers earlier this yr in a deal that was bitterly contested by the Tribune firm’s personal journalists and neighborhood leaders in Tribune’s markets, who sought, finally with out success, to search out native consumers for papers together with the Baltimore Solar and Chicago Tribune. Alden additionally owns the Denver Put up, Orange County Register and Boston Herald.
Alden has a repute for slashing prices that go even past the newspaper trade’s total flip in that route. The newspaper enterprise has been consolidating because it struggles with a digital transition and shrinking revenues, and monetary corporations like Alden have taken an more and more distinguished function as homeowners.
Newsroom jobs dropped almost in half from 2004 to 2018, in keeping with Pew Analysis, and the pandemic has exacerbated these stresses. About one-fourth of the nation’s newspapers have closed prior to now 15 years, in keeping with analysis from the College of North Carolina.
The Lee firm considerably expanded in 2020 when it purchased billionaire Warren Buffett’s newspaper chain from Buffett’s Berkshire Hathaway. On the time, Buffett mentioned, “We had zero curiosity in promoting the group to anybody else for one easy motive: We consider that Lee is finest positioned to handle via the trade’s challenges.”
Buffett didn’t instantly reply to a request for remark Monday.
In a collection of tweets Monday, the union for the Omaha World-Herald’s journalists decried a takeover by Alden, calling the hedge fund “terrible” and “mercenaries” that intestine newsroom staffs and lift subscription costs in an try to wring cash out of papers.
“We’d hope that Lee Enterprises, being a longtime newspaper firm and holding management of print newspapers in Omaha and Lincoln, primarily many of the inhabitants of the state of Nebraska…you’d hope they’d resist the temptation to buyers that wave some huge cash of their face and maintain to the concept stable native newspapers are necessary to communities,” mentioned Jeremy Lipschultz, a professor on the College of Nebraska-Omaha.