This story, originally published at 11:45 a.m., has been updated.
The company’s shareholders approved the sale valued at around $630 million Friday morning in a vote that appears to bring Tribune’s nine daily newspapers under the ownership of Alden Global Capital. Officials announced the outcome on a shareholder call, according to multiple participants.
A purchase by Alden would represent the defeat of a year-long public campaign waged by Tribune news staffers to find an alternate buyer. They had pleaded for well-heeled local investors to buy their newspapers instead of Alden, casting a takeover by the hedge fund as an apocalyptic outcome for journalism in their communities.
On Friday, employee groups pledged to continue to “fight against Alden to protect local news and the cuts that they will inevitably try to make.”
“Today, Tribune Publishing shareholders voted to put profit and greed over local news in our country,” several Tribune newspaper employee unions said in a joint statement.
In a statement, Alden’s president, Heath Freeman, said the firm would “focus on getting publications to a place where they can operate sustainably over the long term.”
“Local newspaper brands and operations are the engines that power trusted local news in communities across the United States,” Freeman said. “The purchase of Tribune reaffirms our commitment to the newspaper industry.”
Before Friday’s vote, many Tribune journalists had pinned their hopes on Stewart Bainum Jr., a wealthy Maryland hotel magnate, who had mounted an 11th-hour counterproposal to purchase Tribune. His effort briefly attracted Wyoming-based Swiss billionaire Hansjorg Wyss, who last month backed out shortly after joining Bainum in a $680 million proposal, about $50 million more than Alden’s offer.
“My family and I are deeply grateful to the journalists, readers, and civic-minded investors who teamed with us to help rescue, reimagine and reinvigorate local journalism,” Bainum said in a statement after the vote. “While our effort to acquire the Tribune and its local newspapers has fallen short, the journey reaffirmed my belief that a better model for local news is both possible and necessary.”
With Tribune, Alden is the second-largest newspaper proprietor in the country, after Gannett. Media observers on Friday said the hedge fund’s history meant Tribune journalists and their readers should expect further cuts.
“This is a terrible outcome, not just for the employees but for every community where Tribune has a newspaper,” said Ann Marie Lipinski, curator of the Nieman Foundation for Journalism at Harvard and a former editor of the Chicago Tribune. “Alden has failed to demonstrate a commitment to robust news coverage and there is no evidence that will change. I’m heartbroken for these papers and their readers.”
Some Tribune journalists had publicly urged California biotech billionaire Patrick Soon-Shiong to vote against Alden’s offer this week. He owns the Los Angeles Times — which is unaffected by the sale — and about one-quarter of Tribune shares, meaning he had enough votes to torpedo the takeover.
But participants remained confused Friday about how, exactly, Soon-Shiong voted. A spokeswoman for Soon-Shiong made a surprise announcement that he “abstained” from voting, calling his stake in Tribune “a passive investment” as he’s been focused on his other companies.
According to a Tribune Publishing filing with the Securities and Exchange Commission on April 20, an “abstain” vote would be counted as a vote against the Alden merger. But a person familiar with the ballot count told The Post that Soon-Shiong’s votes were counted in favor of Alden’s bid. Unnamed Tribune Publishing officials told the Chicago Tribune that Soon-Shiong’s ballots were submitted without the “abstain” box checked, and they consequently were counted as “yes” for the merger.
“You can vote yes. You can vote no. To not vote at all is an absolute failure of leadership and morals,” Chicago Tribune city hall reporter Gregory Pratt said.
An Alden sale allows Soon-Shiong, who told The Post as recently as midweek that he hadn’t yet decided how he was going to vote on the offer, to collect about $150 million in exchange for his shares.
Tribune executives remained notably silent about the confusion into early Friday evening, even as the company’s employees were unclear about what exactly happened. A spokeswoman for Soon-Shiong did not reply to questions about Soon-Shiong’s ballots.
Alden already owns around 200 titles including the Boston Herald, Mercury News and Los Angeles Daily News. The hedge fund has been buying newspapers since the 2007-2008 financial crisis and has since cut jobs in many newsrooms and sold off real estate assets to establish higher-than-average profit margins.
In 2018, Denver Post staffers revolted, took over a section and published stories calling Alden a “vulture.”
An Alden takeover of Tribune had, for some time, seemed all but inevitable. The hedge fund purchased a significant share of Tribune stock in November 2019, and a little more than a year later, the Tribune board approved Alden’s offer to buy the rest of the company.
But Alden also agreed to resell the Sun and other Maryland papers for $65 million to Bainum, who wanted to run them as nonprofits. After that side arrangement fell apart over fees, Bainum decided to compete with Alden’s offer and try to buy all of Tribune instead, with the possibility of selling off the papers to local owners. Wyss and other investors joined Bainum, and they briefly seemed to have a chance at beating out Alden’s offer before Wyss backed out in April and the proposal collapsed.
On Friday, Bainum said that he is focused on Baltimore and Maryland broadly and that he is “evaluating various options, all in the pursuit of creating locally-supported, not-for-profit newsrooms that place stakeholders above shareholders and journalistic integrity above all.”
He added that he expects to make an announcement with more details within days.
Longtime Baltimore Sun education reporter Liz Bowie, who has been a key figure in the campaign to find a local buyer for her paper, said she “will hold on to the hope for a bit longer” that Bainum can still buy the Sun.
“I am proud to have been part of a rebellious band of Tribune reporters who rallied our communities and local investors behind our conviction that our cities need a strong press,” she said.
The sale is also the latest chapter in the tumultuous history of Tribune, whose properties also include the Orlando Sentinel, Hartford Courant and Morning Call of Allentown, Pa.
Advertising revenue in the newspaper industry peaked in 2005, and the overall decline since then has put tremendous pressure on all newspaper proprietors. But Tribune publications have had a particularly tortured relationship with their owners, ever since a leveraged buyout by real estate developer Sam Zell took the company private in 2007. He burdened the company with $13 billion in debt that forced the company into what was then the largest media bankruptcy in history.
The company stayed in bankruptcy for four years. Mirroring the sentiment from many of Tribune’s journalists, Zell referred to the transaction as “the deal from hell.”
Two private equity firms bought the company out of bankruptcy in 2012: Oaktree Capital Management and Angelo, Gordon & Co., along with the investment bank JPMorgan Chase. Those firms deepened the newspapers’ predicament by separating the papers from the more profitable TV stations, websites and real estate holdings. In 2016, as the company fended off a bid from Gannett, Soon-Shiong took a stake in Tribune. He and Chicago entrepreneur Michael Ferro, the largest shareholder in Tribune Publishing, briefly aligned in an effort to keep Tribune independent.
Ferro renamed the company Tronc, for Tribune Online Content. The much-mocked moniker was short-lived.
In 2018, Ferro negotiated a $500 million shotgun sale of the Los Angeles Times and San Diego Union-Tribune, and smaller publications in Tribune’s California News Group, to Soon-Shiong.
Ferro, who drew widespread criticism for his management style and oversight of the newspaper group, resigned that same year alongside media reports of his unwanted advances to several women. The company changed its name to Tribune Publishing, and in the fall of 2019, Alden Global Capital became the largest shareholder in the company.
After Alden’s proposal was approved Friday, Jennifer Sheehan, a features reporter at Morning Call, said she hopes the takeover serves as “a wake up call for our country."
"Local news will continue to erode as long as we allow hedge funds like Alden to act unchecked,” she added.