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Web Bonus: How “Vulture” Hedge Funds Are Killing Off the Newspaper Industry

Web ExclusiveApril 11, 2018
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Extended discussion looking at how The Denver Post has launched a revolt against its owner: New York-based hedge fund Alden Global Capital. On Sunday, The Denver Post’s editorial board published a lead editorial headlined “As vultures circle, The Denver Post must be saved.” Alden Global Capital is the parent company of Digital First Media, one of the country’s largest newspaper chains. We speak to former Denver Post editor Ricardo Baca.

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!,, The War and Peace Report. I’m Amy Goodman, with Juan González, with Part 2, our web exclusive, on The Denver Post’s open revolt in its own pages.

JUAN GONZÁLEZ: Well, the staff of The Denver Post have launched a revolt against their owner: New York-based hedge fund Alden Global Capital. On Sunday, the Post editorial board published a lead editorial headlined “As vultures circle, The Denver Post must be saved.”

AMY GOODMAN: For more, we continue our conversation with Ricardo Baca, the former cannabis editor at The Denver Post. Marijuana is legal in Colorado. He wrote one of the op-eds in the paper, headlined “When a hedge fund tries to kill the newspapers it owns, journalists must fight back.” Baca worked at The Denver Post for 16 years, before that, the Rocky Mountain News, which is now defunct, and he’s now the CEO and founder of Grasslands.

I wanted to ask you, Ricardo, about the—about the hedge fund Alden’s owners, Randall D. Smith and Heath Freeman. Who are they?

RICARDO BACA: You know, these are not good men, in general, but they are very rich New Yorkers who founded their own hedge fund years ago. Randall put Heath in charge, and they’ve continued to make a series of questionable decisions. You know, they’re shrouded in secrecy. We know this much. And inevitably, some amount of investigative reporting has showed up some of the—showed some of these secrets and brought them to light, which I think has been important, the most recent one being a lawsuit in Delaware court that actually shows Alden being sued by another hedge fund, which also owns the newspaper group Digital First Media, for taking out profits from the newspaper group and putting them toward other more risky investments. And so, right now, Digital First Media’s ownership, its primary owner, Alden Global Capital, is being sued by its co-owner, the minority share owner, which is another hedge fund.

JUAN GONZÁLEZ: Well, you know, Ricardo, the interesting thing to me is that there was—the newspaper industry went from family-owned, largely, businesses to then the period when it was public corporations that were essentially running these huge, multi-city chains, but now, little by little, most of the public corporations went—for instance, Media News used to be owned by Dean Singleton back before Alden took it over—most of these public corporations are now owned by private investors, who have even less responsibility even to shareholders to what they do with the companies they own. Can you—from your perspective, what has been the impact of this change now to even more private ownership of the media?

RICARDO BACA: You know, it’s not only less responsibility to shareholders. It’s less involvement in the community, which is just devastating for a local newspaper. I mean, I think this conversation surrounding local journalism right now is so important, with what’s happening with Sinclair, what’s happening with Google and Facebook, and now certainly what’s happening with the nation’s second-largest newspaper chain, Digital First Media, under attack by its very owner. So, this is obviously bad news. You have these venture capitalists, a hedge fund. They are legitimate vulture capitalists. They are going after distressed organizations in distressed industries, which is why they’re in the newspaper game right now.

And when their most recent purchase was announced in Boston in the last month, you know, I think our colleagues out there knew this was bad, bad news for them. And I think back to two or three years ago, when it was announced that Digital First Media was also buying newspapers, like the Orange County Register and a couple others out in Southern California. I remember talking to my brand-new colleagues there after the news was announced, and they just knew the writing was on the wall. I think anymore, when it’s announced that Alden Global Capital is about to buy your newspaper, you know that things are about to change, and they’re not going to change for the better.

AMY GOODMAN: I want to turn to a video posted online by the NewsGuild-Communications [Workers] of America as part of a campaign to support employees of Digital First Media. The organization is trying to put pressure on Duke University to sever ties with its 2002 alum, Heath Freeman, CEO of Alden Media Group.

THE NEWSGUILD-CWA: Duke is accepting donations from a university alum who’s plundering local newspapers across the country, and is even sending Duke students to learn from him. Meet Heath Freeman. He’s the president of Alden Global Capital, a hedge fund that bought Digital First Media and is systematically tearing apart its 200 community newspapers. When Heath Freeman buys newspapers, he slashes staff and liquidates assets—all for short-term profits for the benefit of him and his investors.

AMY GOODMAN: In 2014, Alden Global Capital’s Heath Freeman spent nearly $120,000—$119,500—to buy a jersey worn by the former Duke University college basketball star Christian Laettner, who made one of the most legendary shots in college basketball history. So, Ricardo Baca, talk more about who Heath Freeman is and what’s happening at The Denver Post.

RICARDO BACA: You know, Heath Freeman is not a man who I have any respect for. And he’s also not a person who has any goodwill coming from the Denver Newspaper—from the Denver Newspaper Guild or The Denver Post. You know, he’s made a series of questionable investments. And you can imagine how it feels to be a newspaper making decent money, you know, in a medium-sized market like Denver, and then you see your colleagues regularly being bought out or laid off, and then you hear about him spending all this money on a basketball jersey, which certainly has some sentimental meaning to him, or his colleagues buying tens of mansions throughout Florida—you know, these investments that are being made off the work that we’re doing and off the profits that we’re generating. It certainly doesn’t feel good. And I think that’s how we’ve come to actually be journalists who are protesting their own ownership.

JUAN GONZÁLEZ: Ricardo, what’s been the reaction in the local Denver community to the editorial and the staff revolt?

RICARDO BACA: I think it’s two parts. It’s been very encouraging to see Denverites, Coloradans alike, come out in support of needing a daily newspaper. They recognize that this is important. And I think this perspective section that ran on Sunday really drove that point home.

But I think the second part is: What do we do next? And I kind of spoke to this earlier in the show. You know, we don’t really know what to do next. We’re journalists. We know how to write and publish sections. And that’s kind of where it starts. Most of us were never community organizers. That’s not in our blood. But we need to do something next. We need to keep this momentum going.

And I think the readers are wondering, as well, “What can we do?” There’s this deep concern and divide, because The Denver Post just implemented a paywall on, its website. And readers are wondering, “We want to support you. We want to give you that $12 a month for this digital subscription. But will that make any difference?” And sure enough, a couple months after the paywall was implemented, this most recent cut, which is the most severe and most drastic in the newspaper’s history, was announced. And now these readers are like, “Great! So we’re paying $12 a month for a digital subscription to have 30 less journalists working on this website.”

AMY GOODMAN: So, talk about what local newspapers mean for journalism.

RICARDO BACA: Well, I think we know that local newspapers are the backbone of everything. I mean, journalism fuels democracy. And we know that civic engagement, from various studies, also goes down when we have less local journalism in the market.

You know, the Pew Research Centers reports on the number of journalists covering statehouses across the country. We know that a majority of these journalists work for newspapers. And we know that the number of journalists at newspapers covering statehouses is going down year over year.

So this is not good news for these communities. And ultimately, local journalism ultimately fuels national journalism. And the big outlets, like The New York Times and Washington Post and CNN, are only going to suffer, the more these local outlets start to dry up, and potentially even disappear.


JUAN GONZÁLEZ: Well, in that vein, I wanted to ask you—when you were at the Post, you were the—covering the cannabis industry. You had how many reporters working under you, just covering that industry?

RICARDO BACA: Yes, and my last post was cannabis editor at The Denver Post, before I resigned, and we had a team of seven when I was there. It started out as a one-person gig. We weren’t sure where it was going. I talked them immediately into a second full-time hire. And me and my colleague Aleta, we had built The Cannabist into a powerhouse that, in less than three years, was beating and High Times in digital traffic. And that’s because we were bringing real, legitimate journalism to this industry that desperately needed it, holding the industry and the regulators accountable. And less than three years later, we had built the staff up into seven, which was three ad side, four editorial.

And we were looking to expand and double that number. In fact, we were working on that before I left, and we were going to be hiring another seven in California and Canada. And when that deal fell through, I unfortunately knew that my time at the newspaper was up, because if DFM was not investing in this buzzy—

AMY GOODMAN: Digital First Media.

RICARDO BACA: —successful, self-sustaining website, then what were they going to invest in? I think the writing was on the wall for me.

AMY GOODMAN: Ricardo, but just explain this, because for people around the country, they may be scratching their heads, where marijuana is not legal, to be the cannabis editor of a mainstream newspaper. Explain the kind of issues you were covering and why you felt it was so critical to the state of Colorado.

RICARDO BACA: Well, yeah, when you think back to 2013, Colorado became the first place in the world, the first place in the world to ever implement a legal, regulated, adult-use cannabis system. And so, my former editor, Greg Moore, who also wrote an editorial on the front page of this last Sunday’s perspective section, he recognized the need to cover this beat differently than we had in the past. And so that was our guard—that was our goal and our charge. And I took it very seriously. Don’t get me wrong. We had a lot of fun with the beat. I hired a couple marijuana critics and a columnist, who would answer people’s questions and give people advice on the new legal, regulated market. But we were also doing investigative journalism and data journalism and very serious breaking news, covering the statehouse and city council, a number of city councils throughout the state, because local control is a huge element of the Colorado model of cannabis legalization, which has largely been adopted and used throughout the world since then.

But, you know, the kinds of stories, in 2014, I reported—I took 10 different edibles, infused edibles, into a state-licensed lab and had them tested for potency, and realized that almost nobody was getting the potency exactly right. And then, a couple years later, in 2016, had another page one Sunday exposé where we took in a bunch of cannabis concentrates into another lab and had those tested for the presence of pesticides. That coverage led to an executive order from the governor of Colorado, led to the first recall of cannabis in the modern world. And that first recall ended up triggering a slate of 30 other recalls, just because of the chain of command and seed-to-sale tracking. And as they found the presence of pesticides here, they just followed the rest down to these cultivators. And so, it was and is a very serious beat in Colorado and other regulated markets.

AMY GOODMAN: Ricardo Baca, I want to thank you for being with us. But I wanted to end, Juan, with you, because this is your lifeblood. You cover these issues, both as a journalist and as president of National Association of Hispanic Journalists, head of Unity, the journalists of color, all the organizations in this country—the issue of local media and how important it is and what it means when it’s taken over by a hedge fund. I mean, the people who profit the most are the politicians, corrupt businesspeople, who don’t want to be covered. And the people who profit the least are the people whose voices are rarely heard, and now increasingly more threatened.

JUAN GONZÁLEZ: Well, it’s clear, as we listened to Ricardo talk about the depletion of the ranks of journalists in the city of Denver. We’re talking about, when the Rocky Mountain News was still around and The Denver Post was flourishing, you had over 500 journalists in the city of Denver covering Denver. That meant there were enough journalists to cover various school boards, not just in the major city, but in the suburbs, the county commissions, the city council, the planning board—all these local issues that so affect the daily lives of the people of Denver. So, from 500, around 2002 to 2004, you’re talking now 60, right? So you’re talking about almost only 10 percent, 10 to 12 percent, of the original reporting army is left.

So that definitely means that the people of Denver and of Colorado get much less coverage on the—they’ll always get the national coverage, on the national networks, but who is going to cover their local officials, their city council, their school boards? There are no reporters to do that anymore. And that is how democracy, especially at the local level, begins to collapse, when people have no idea what’s going on in their own community.

AMY GOODMAN: You know, Ricardo worked at the Rocky Mountain News before he worked at The Denver Post. It closed after 150 years, from 1859 to 2009.

JUAN GONZÁLEZ: Right, right. And that’s been happening all around the country. And the astonishing thing here, as we’ve seen in this interview, is that The Denver Post was making money. It’s just that the owners decided to siphon the money off to other industries where they were investing it, and not to keep it to actually build up this community institution.

AMY GOODMAN: So, let’s end with a new Politico article headlined “Trump Thrives in Areas That Lack Traditional News Outlets.” It reads, “An extensive review of subscription data and election results shows that Trump outperformed the previous Republican nominee, Mitt Romney, in counties with the lowest numbers of news subscribers, but didn’t do nearly as well in areas with heavier circulation. …

“The results show a clear correlation between low subscription rates and Trump’s success in the 2016 election, both against Hillary Clinton and when compared to Romney in 2012.” Juan?

JUAN GONZÁLEZ: Well, I mean, that shows, clearly, that when people are not properly educated or have enough information about what’s going on, both locally and nationally, the results speak for themselves in terms of how they function as citizens. And so, it’s tragic, but it’s the continuing problem that the American people need to do something about.

AMY GOODMAN: Well, we want to thank Ricardo Baca, now CEO and founder of Grasslands. He was the cannabis editor for The Denver Post, when he resigned in 2016, after 16 years. And we’re going to link to his piece in The Denver Post, headlined “When a hedge fund tries to kill the newspapers it owns, journalists must fight back.”

And a head’s up to our viewers in Colorado: Democracy Now!'s Juan González will be speaking about his book, Reclaiming Gotham—and I'm sure, Juan, you’re going to be talking about Denver Post and everything else related to news and how it is covered—on Saturday, that’s April 14th, in Boulder, Colorado, at the First Congregational Church at 6 p.m., and in Denver on Sunday, April 15th, at the Tattered Cover Bookstore in LoDo. On Monday, he’ll be speaking at the University of Denver. Go to for details.

That does it for this segment. To see Part 1 of our discussion with Ricardo Baca about what’s happening at The Denver Post and the open rebellion there of the reporters and editors against their New York hedge-fund owner, go to I’m Amy Goodman, with Juan González. Thanks for joining us.

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