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Journalists Rise Up Against Wall Street Hedge Fund Decimating Newsrooms Across the Country

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Journalists are orchestrating a rising rebellion against censorship and layoffs implemented by the nation’s second-largest newspaper chain, Digital First Media, and the New York-based hedge fund that controls it, Alden Global Capital. Reporters from Digital First publications around the country will rally outside Alden Global Capital’s office here in New York City to demand that the hedge fund either invest in its newspapers or sell them. The hedge fund is known for slashing and downsizing its papers to maintain high profit margins. Since 2010, Digital First Media has cut budgets and staffs at newspapers across the country, including the Oakland Tribune, the San Jose Mercury News and the St. Paul Pioneer Press. In recent months, Digital First Media cut 30 percent of the newsroom at The Denver Post. Meanwhile, the private company reported profits of almost $160 million in 2017 and a 17 percent operating margin—far higher than other newspaper publishers. For more, we speak with Elizabeth Hernandez, a breaking news reporter for The Denver Post; Julie Reynolds, an investigative journalist who has been covering Alden Global Capital for years; and Dave Krieger, the former editorial page director at the Boulder Daily Camera before being fired last month for self-publishing an article critical of Alden Global Capital.

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

AMY GOODMAN: This is Democracy Now! I’m Amy Goodman, with Juan González.

JUAN GONZÁLEZ: We turn now to the rising rebellion against censorship and layoffs implemented by the nation’s second-largest newspaper chain, Digital First Media, and the New York-based hedge fund that controls it, Alden Global Capital. Reporters from The Denver Post and Digital First Media publications around the country have flown to New York City to protest Alden Global Capital outside their office today.

The hedge fund is known for slashing and downsizing its papers to maintain high profit margins. Since 2010, Digital First Media has cut budgets and staffs at newspapers across the country, including the Oakland Tribune, the San Jose Mercury and the St. Paul Pioneer Press. In recent months, Digital First Media cut 30 percent of the newsroom at The Denver Post. Meanwhile, the private company reportedly has amassed profits of almost $160 million in 2017, with a 17 percent operating profit margin—far higher than other newspaper publishers.

The Denver Post launched an open revolt against its hedge-fund owners in April, publishing a series of editorials railing against Alden Global Capital and its tactics. The Post editorial page editor, Chuck Plunkett, was behind an April 6th editorial headlined, quote, “As vultures circle, The Denver Post must be saved.” Plunkett resigned Thursday when Digital First Media refused to approve his new editorial that called on it to, quote, “reinvest in its newsrooms, or release us to better ownership.” Plunkett’s editorial also alleged the company has instructed editors at all the papers it owns to never mention the company without its clearance.

AMY GOODMAN: Two other editors at The Denver Post have also quit over censorship and drastic staffing cuts made to the paper’s staff. Larry Ryckman, the paper’s senior news editor, quit last week. On April 25th, Digital First Media fired the editorial page editor at the Boulder Daily Camera, another paper it owns, for publishing an editorial about the company he said he was told not to run. Instead, it was published online by the Boulder Free Press. Reporters from Digital First publications around the country are rallying outside Alden Global Capital’s offices here in New York City today to demand that the hedge fund either invest in its newspapers or sell them.

Democracy Now! reached out to Alden Capital to request a comment or join us on the show; they didn’t respond.

For more, we are joined by three guests. In Denver, Dave Krieger is with us, the editorial page director at the Boulder Daily Camera, before being fired last month for self-publishing an article critical of Alden Global Capital. Here in New York, Julie Reynolds is with us. She’s an investigative journalist who’s been reporting on Alden Global Capital, her most recent piece for The Nation headlined “Meet the Vulture Capitalists Who Savaged 'The Denver Post.'” And Elizabeth Hernandez is with us, a reporter for The Denver Post, protesting Alden Global Capital this week in New York City.

We welcome you all. Elizabeth Hernandez, let’s go to you first. You’re wearing a T-shirt, #NewsMatters. Talk about where you’re going to be protesting today and why you, as a reporter, are doing that.

ELIZABETH HERNANDEZ: We’ll be protesting in front of Alden Global Capital’s headquarters. And I’m there because I want to do good journalism. This is what I’ve wanted to do my entire life. And Alden Global Capital is decimating newsrooms across the country. And we want them to invest or sell in their newspapers.

JUAN GONZÁLEZ: Well, talk about your own personal experience in Denver.

ELIZABETH HERNANDEZ: Yeah, so I started as an intern in 2014 at The Denver Post. I was hired on in 2015. In 2016, I was laid off. And then I worked at other media organizations for a couple years, including the Boulder Daily Camera. And I was just hired back on at The Denver Post, three weeks before we were told we were losing a third of our newsroom.

AMY GOODMAN: You’re a breaking news reporter there.


AMY GOODMAN: Let’s go to Dave Krieger. He’s in Denver, at Denver Open Media. Dave, you are the former editor of the Boulder Daily Camera. How long did you work there?

DAVE KRIEGER: I was there three-and-a-half years, Amy.

AMY GOODMAN: And talk about what happened, why you were just fired.

DAVE KRIEGER: Well, our newsroom, like that of the Post and like that of many other DFM properties around the country, has been getting smaller and smaller over time. Boulder is a very dynamic community, as I’m sure you know. It’s the startup capital of Colorado. It’s got a high-tech community that’s very vibrant. Google has a campus. Twitter. And so, it’s one of the most highly educated communities in the country. The Camera used to serve that community pretty well. And as it’s gotten smaller and smaller and smaller, we’ve been able to do less and less and less. And it became an issue that, it seemed to me, the community of Boulder needed to know about, so that it could decide whether it wanted to save this institution, its 128-year-old daily newspaper, or whether it was willing to watch this hedge fund essentially bleed it dry. And if you read Ken Doctor’s reporting, the timeline here is pretty short. He’s looking at 2020, perhaps, as the end of the line for a lot of these properties, as Alden just simply drains all the cash out of them.

So I felt it was important that the people of Boulder understand what was going on. The newspaper is the community’s storyteller, though. So if we’re not telling the story, because it’s about us, the people aren’t knowing. They are not going to find out what’s going on. So I felt it was important to write about this. I submitted the editorial to our editorial board, as I always do. It’s our standard process. The editor of the paper approved it. The publisher did not. And at that point, the question for me was: Will I allow this story to be suppressed, and the people of Boulder not to know, potentially until it’s too late, that this newspaper is on its last legs? And so, I thought, “No, my responsibility as a journalist—been doing this a long time—is to tell the truth as best I can frame it, let the people know what’s going on.” And so I did go ahead and take the editorial that had been spiked inside the paper, and I published it on a blog online, so that the people could have the information that was contained in it about what Alden Global Capital is doing to the Boulder Daily Camera.

JUAN GONZÁLEZ: Now, Julie Reynolds, you’ve been following now Alden Global Capital, a firm that outside the publishing world was basically unknown for most folks, and its record, especially with some of the major institutions of the United States—the Orange County Register, the San Jose Mercury, The Denver Post. What have they been doing?

JULIE REYNOLDS: Well, that was what was so unusual. I worked at a Digital First Media newspaper when Alden took over. And—


JULIE REYNOLDS: At the Monterey County Herald. And so I saw my own newsroom get decimated. I saw there was no hot water in the restrooms. We had no pens, no folders. We had to bring in our own office supplies. I went through three years of that. And then, as an independent freelancer, I thought, “Why don’t I start investigating these people?” I’m an investigative reporter by background.

And I was pretty shocked by what I found. These guys had no real experience in the media. They had invested for a little while, oddly enough, in Sinclair media, about maybe five, six years ago. And then they took over two large newspaper chains that, combined, became the second-largest chain in the country, Digital First Media. And they had no interest in journalism. They are not just a hedge fund. They’re what’s known as a vulture hedge fund. And that’s a Wall Street term; that’s not my term as a journalist. And what that means is, they will buy a business that’s in trouble, and basically extract all the resources and money they can from it, all the profit, sell off the real estate, get what they can and leave the bones out in the desert to dry, if anything remains at all.

What shocked me, as well, looking into them, was the high level of secrecy in this organization. You know, as Americans, we’re used to knowing who owns our media, who controls it. We expect that kind of transparency. But these guys were first incorporated in the isle of Jersey, which is an international tax secrecy haven. A lot of their financial investment funds are in the Cayman Islands, including the Digital First Media assets are actually based in the Cayman Islands. So there’s no transparency. There’s no information about who these folks are. It took a lot of digging to even figure out the names of the principals.

JUAN GONZÁLEZ: And since they’re not even a publicly traded corporation, they don’t actually have to do filings with SEC to report on their income or their profits.


JUAN GONZÁLEZ: So, it basically takes a lot of investigative reporting to even be able to figure out what they’re up to financially, doesn’t it?

JULIE REYNOLDS: Yeah. And like a lot of these companies, especially when they deal with real estate, there’s a lot of layers, or what are called LLCs, limited liability corporations. And so it took a lot of digging to find out what properties they owned, how they were buying and selling real estate. It turned out the two main principals were buying up many millions of dollars’ worth of mansions and mixing the real estate in with another entity that was selling off our newspaper buildings all across the country.

AMY GOODMAN: Well, let’s talk about that, who the founder and chief of investments of Alden Global Capital, Randall Smith, President Heath Freeman. You begin your piece in The Nation, “How Many Palm Beach Mansions Does a Wall Street Tycoon Need?” “In 2013, a reclusive New York tycoon and his wife began buying up expensive Palm Beach real estate—lots of it. First they bought seven mansions for a total of $23 million. Then another four 'moderately priced' homes for $8.4 million. Then five more for $23 million. None of them were purchased in the tycoon’s name. [They weren’t purchased in his] wife’s name, either. [Instead,] the homes were deeded to limited-liability companies, including L. Jakes LLC and 124 Coconut Row LLC.” Pick it up from there. Who is this who’s doing this?

JULIE REYNOLDS: Well, Randall Smith has long been an investment feature in New York. He was known as kind of the pioneer of vulture capitalism. And that means going into these distressed companies. He’s invested in Greek debt. He’s invested in failing companies all over the world. A lot of them are ridden with scandals, allegations of fraud and corruption. Any company that’s in trouble is kind of fair game for them. But the thing that changed with Randall Smith was that, normally, even when a regular hedge fund would come in and they see a company in trouble, they might want to find ways to buy low, build the company back up and then get their value back because the company is going to survive and thrive. The vultures have a whole different philosophy. Their idea is to let a company flounder, and pretty much destroy whatever’s left, take out what they can and then move on to the next.

JUAN GONZÁLEZ: And, Elizabeth, what does this mean to the newsroom? I mean, we’ve reported earlier on what had happened with The Denver Post previously. And I should say that I had met Dean Singleton, the former publisher, years past. And Singleton did not have a great reputation as someone who was actually building newsrooms, but at least he wasn’t cutting them to the bone the way Alden has. What’s happened? You say you came to The Denver Post just before the latest round of layoffs.


JUAN GONZÁLEZ: What does it mean in the newsroom?

ELIZABETH HERNANDEZ: Yeah. I mean, we are not covering so many beats that we should be covering. We’re a huge, thriving community and a room full of very talented journalists. And Denver deserves better. We don’t have a dedicated courts reporter. I am a Saturday reporter. I’m the only reporter who works Saturday covering all the breaking news for Colorado. And we just lost our digital staff on the weekends.

AMY GOODMAN: And where is your office?

ELIZABETH HERNANDEZ: Well, we were downtown, but we—

AMY GOODMAN: For years.

ELIZABETH HERNANDEZ: —just recently moved out to a printing plant in unincorporated Adams County.

AMY GOODMAN: So you were moved like half an hour out, into the printing plant—


AMY GOODMAN: —of The Denver Post?

ELIZABETH HERNANDEZ: Yes, that is correct.

AMY GOODMAN: Dave Krieger, you referred to Ken Doctor, who wrote a piece for Nieman Lab, “Newsonomics: Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon.” So, what are you calling for right now? You’ve got your two papers. You’re more than a century old. How old is The Denver Post? The Rocky Mountain News

DAVE KRIEGER: Similarly, about 125 years.

AMY GOODMAN: The Rocky Mountain News died after what? After its 140th or 150th birthday. So, what—

DAVE KRIEGER: A hundred and fifty, yeah. And I was there. I was there on the day that the Rocky closed. I was there for many years.

Juan makes a very good point. We are used to companies cutting newspapers so that they can increase profitability. Dean Singleton did that in a big way. Gannett, nationwide, did that. The difference here is, those were at least newspaper companies. They wanted the properties to survive, because that was their business. Private equity doesn’t care about what business it’s in. As Juan described, they will suck all the cash out of it, and then they will move on to the next distressed property. This is sort of the evolution of what Ben Graham, Warren Buffett’s mentor, used to call cigar-butt investing: There’s still a few puffs left in the cigar, and you just keep raking in the cash until that cigar butt is over.

If Ken Doctor is right—and a shout out to Julie Reynolds, by the way, whose investigative reporting here has provided us with the data. All we had was anecdotal evidence before. If Ken Doctor is right, then, I’m sorry to say, protests like today will not matter. Alden Global Capital answers to no one other than their investors. All they care about is cash, not PR, not journalism, not digital, nothing. Cash. So, if that’s correct, then we have to fight them on that level.

And as Juan will remember, back in the days when both of us were Newspaper Guild people, the way you do that is you get subscribers to boycott those papers. You get a collective action in with subscribers commit to canceling their subscriptions, if and when the organizer decides they can’t get a response from the company. And then you demand the DFM come to the table and talk about saving these properties or selling them. And if they refuse to do that, you launch the boycott. Everybody cancels their subscriptions. And you deprive Alden—

AMY GOODMAN: Where are the—where are the protests today, Elizabeth?

DAVE KRIEGER: —of the one thing it cares about, and that’s cash.

ELIZABETH HERNANDEZ: Outside of the Lipstick Building.

AMY GOODMAN: So the protests are outside the Lipstick Building in New York today. That does it for the show. Dave Krieger, Elizabeth Hernandez and, as well, Julie Reynolds, thanks for joining us.

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