WASHINGTON: A hedge fund has struck a deal to acquire the publisher of the Chicago Tribune, New York Daily News and other regional dailies, stoking fears of fresh job cuts in the battered US newspaper sector.
Alden Global Capital, which already owns some 50 US newspapers, agreed to buy the shares it does not already own in Tribune Publishing in a deal valuing the group at $650 million, according to a joint statement late Tuesday.
As part of the deal, the companies agreed to spin off the Baltimore Sun to a nonprofit group formed this year called Sunlight for All Institute, which will operate the daily and its affiliates in Maryland.
The agreement sparked fears about the outlets’ futures, in light of Alden’s reputation for aggressive cost cutting.
“Alden is the most avaricious of the chain newspaper owners, squeezing the life (and the journalism) out of its properties,” Northeastern University journalism professor Dan Kennedy wrote in a blog post.
Tribune chairman Philip Franklin said that the publishing group’s committee examining offers was able to negotiate “a premium, all-cash price, which the committee concluded was superior to the available alternatives.”
The deal comes with newspapers across the United States facing a financial calamity worsened by the coronavirus pandemic, with several bankruptcies and consolidations in recent years.
McClatchy, the second largest newspaper chain, filed for bankruptcy protection last year just ahead of the pandemic, which has deepened the industry’s woes.
Gannett, the largest chain following its merger with rival GateHouse, implemented pay cuts and furloughs last year to cope with the economic impact of the Covid-19 outbreak.
Following a long decline in print readership, many local and regional newspapers have reduced staff or cut the number of print editions. Most have struggled to gain traction online with internet giants dominating the digital advertising market.
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