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Tag: Alden Global Capital

Lee Enterprises rejects Alden’s $144M purchase offer

Lee Enterprises Inc.’s board unanimously rejected Alden Global Capital’s $144 million buyout offer made last month, saying it “grossly undervalues” the company and its newspapers, which include 31 publications in Virginia.

“The Alden proposal grossly undervalues Lee and fails to recognize the strength of our business today, as the fastest-growing digital subscription platform in local media, and our compelling future prospects,” Lee Chairman Mary Junck said in a statement released Thursday. “We remain confident in our ability to create significant value as an independent company.”

Alden, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, as well as other former Tribune Publishing Co. newspapers, proposed purchasing Iowa-based Lee at $24 a share. If successful, the purchase would have placed 12 of Virginia’s daily legacy newspapers with approximately 330,000 circulation under one company — a firm that is known for eliminating newsroom positions at its assets, including the Chicago Tribune, Denver Post, New York Daily News, Boston Herald and the Baltimore Sun, as well as closing newsrooms, including the Pilot and Daily Press’ offices.

Lee newspapers’ newsroom unions decried the prospect of Alden ownership, urging the board to reject the offer.

“Alden has cut their staffs at twice the rate of competitors, resulting in the loss of countless jobs,” the unions’ open letter reads. “They’ve fostered unhealthy and untenable workplaces that make it impossible to retain talent. They’ve shuttered physical newsrooms to leave journalists working from their cars, and at properties they lease, Alden stiffs local landlords for the rent. Their investment history is littered with bankruptcies and federal probes, and they use secretive money to fund their shady dealings.”

Among the signatories were the Richmond Newspapers Professional Association, representing newsroom employees at the Richmond Times-Dispatch; Blue Ridge NewsGuild, representing The Daily Progress in Charlottesville; and Timesland News Guild, The Roanoke Times’ newsroom union; as well as unionized newsrooms in Nebraska, Illinois, Iowa, Wisconsin, Montana, New York, Washington and the national United Media Guild.

Lee’s board previously took action to prevent a hostile takeover by Alden, which owns more than 6% of Lee’s stock. Lee’s board adopted a “poison pill” plan that would allow other shareholders to buy shares at a 50% discount or possibly get free shares if Alden gains control of more than 10% of Lee’s stock.

Lee owns 31 newspapers in Virginia, purchased in January 2020 from a subsidiary of Berkshire Hathaway Inc., Warren Buffett’s firm. Among the Virginia newspapers under Lee’s ownership are the Times-Dispatch; Bristol Herald Courier; The News & Advance in Lynchburg; The Free Lance-Star in Fredericksburg; Martinsville Bulletin; Danville Register & Bee; The News Virginian in Waynesboro; The Roanoke Times; and The Daily Progress.

Lee reported strong fourth quarter fiscal 2021 results with 37% growth in digital revenue and 65% growth in digital-only subscriptions, the company reported Thursday.

Newsroom unions urge Lee to reject Alden’s offer

A dozen Lee Enterprises newsroom unions, including three in Virginia, wrote an open letter to company management Monday, urging Lee to reject Alden Global Capital’s purchase offer of approximately $144 million.

“Alden has cut their staffs at twice the rate of competitors, resulting in the loss of countless jobs,” the letter reads. “They’ve fostered unhealthy and untenable workplaces that make it impossible to retain talent. They’ve shuttered physical newsrooms to leave journalists working from their cars, and at properties they lease, Alden stiffs local landlords for the rent. Their investment history is littered with bankruptcies and federal probes, and they use secretive money to fund their shady dealings.”

Among the signatories are the Richmond Newspapers Professional Association, representing newsroom employees at the Richmond Times-Dispatch; Blue Ridge NewsGuild, representing The Daily Progress in Charlottesville; and Timesland News Guild, The Roanoke Times’ newsroom union; as well as unionized newsrooms in Nebraska, Illinois, Iowa, Wisconsin, Montana, New York, Washington and the national United Media Guild.

Iowa-based Lee Enterprises owns 31 newspapers in Virginia, purchased in January 2020 from a subsidiary of Berkshire Hathaway Inc., Warren Buffett’s firm. Among the Virginia newspapers under Lee’s ownership are the Times-Dispatch; Bristol Herald Courier; The News & Advance in Lynchburg; The Free Lance-Star in Fredericksburg; Martinsville Bulletin; Danville Register & Bee; The News Virginian in Waynesboro; The Roanoke Times; and The Daily Progress.

On Nov. 22, Alden — which owns The Virginian-Pilot and Daily Press, among other dailies previously owned by Tribune Publishing Co. — proposed purchasing Lee Enterprises at $24 per share. If accepted by Lee, the acquisition would consolidate 12 of Virginia’s daily newspapers under one owner.

The unions have had earlier conflicts with Iowa-based Lee, which has laid off newsroom employees at most of its papers and moved copy editing and design duties to hubs in Wisconsin and Indiana, eliminating local copy desks at smaller newspapers. However, Alden is considered by many critics to be a killer of newspapers through buyouts and layoffs, as well as closing newsrooms and shutting down publications, a position shared by the Lee newsroom unions in their letter: “They are not good stewards of their investments. They do not even try to run a sustainable news company. They will not turn profits by growing the business and increasing revenue. They will do so by gutting newsrooms. They will take this proud company, built over decades of hard work, and leave it in ashes. Thousands of us will lose our jobs, and the communities we serve will never recover. Cities with weakened or shuttered newspapers have lower voter turnout, higher taxes, more corruption and increased polarization. Our democracy suffers, and Alden reaps the rewards.”

Alden currently owns more than 6% of Lee’s stock, and after its offer last week, Lee’s board adopted a “poison pill” plan that would allow other shareholders to buy shares at a 50% discount or possibly get free shares if Alden gains control of more than 10% of Lee’s stock, effectively killing the possibility of a hostile takeover while the board considers Alden’s offer.

Alden Global Capital seeks to buy Lee Enterprises for $144M

Alden Global Capital, the hedge fund that owns The Virginian-Pilot and Daily Press in Virginia, has proposed purchasing Lee Enterprises, the Iowa-based owner of the Richmond Times-Dispatch and most other major Virginia newspapers, for approximately $144 million, Alden announced Monday.

If accepted, the $24 per share purchase price would consolidate 12 of Virginia’s daily legacy newspapers with approximately 330,000 circulation under one company — a firm that is known for eliminating newsroom positions at its assets, including former Tribune Publishing Co. newspapers Chicago Tribune, Denver Post, New York Daily News, Boston Herald and the Baltimore Sun, as well as closing newsrooms, including the Pilot and Daily Press’ offices.

With 6 million outstanding shares, the approximate purchase cost of Lee would be $144 million on a market value of just below $111 million.

Alden owns 6% of the issued and outstanding common stock of Lee, which was valued at $18.49 per share on Friday’s stock market closing, according to Alden’s announcement. The hedge fund has offered an all-cash proposal with no financing conditions. As of 12:30 p.m., Lee stock rose 24.6% to $23 per share.

Among the Virginia newspapers under Lee’s ownership are the Richmond Times-Dispatch; Bristol Herald Courier; The News & Advance in Lynchburg; The Free Lance-Star in Fredericksburg; Martinsville Bulletin; Danville Register & Bee; The News Virginian in Waynesboro; The Roanoke Times; and The Daily Progress in Charlottesville. Lee purchased those papers among 31 it acquired for $140 million in January 2020 from Berkshire Hathaway Inc.

Only seven daily newspapers with presences in Virginia (including The Washington Post and The Washington Times) are not owned by Lee or Alden currently.

Lee has consolidated copy desks for smaller daily newspapers at hubs in Indiana and Wisconsin, eliminating local newsroom jobs. Other Lee newsrooms have seen editorial layoffs since their purchase in 2020.

Lee Enterprises did not respond immediately to requests for comment.

According to the company’s third quarter financial report, total operating revenue was $600.7 million from January to September, compared to $426.2 million through the same period of 2020, up 8%.

Newsroom unions decried the proposed Alden-Lee deal. The Timesland News Guild, which represents Lee-owned Roanoke Times, tweeted, “Staffing at one of [Virginia’s] largest papers, [The Virginian-Pilot], was slashed to the bone after Alden bought it earlier this year.” Robert Zullo, the editor of independent news site Virginia Mercury and a former Times-Dispatch staff writer, called Alden “the grim reaper of the newspaper business.”

The Times-Dispatch union released a statement via tweet: “We urge Lee to reject this proposal, which would be destructive to already-depleted newsrooms across Virginia. … Ownership by Alden would be destructive for them all and for the public’s right to be informed by independent news reporters.”

Last Thursday, union members at former Tribune newspapers now owned by Alden — including the Daily Press and Pilot — announced they would work only eight hours that day and no more, to demonstrate how much unpaid overtime they typically spend working on daily news stories.

 

Richmond’s Style Weekly shuts down after nearly 39 years

After close to 39 years, the Richmond-based alternative weekly newspaper Style Weekly will shut down this week, Editor-in-Chief Brent Baldwin posted on Style’s Facebook page Tuesday.

The publication’s closing came three years after Norfolk-based Landmark Communications Inc. sold its Virginia newspapers — The Virginian-Pilot, Inside Business and Style Weekly — and their associated businesses for $34 million to Tribune Publishing Co. (then known as Tronc Inc.), which already owned the Daily Press in Newport News, as well as the Virginia Gazette in Williamsburg and the Tidewater Review in West Point.

This May, Tribune Publishing was purchased by hedge fund Alden Global Capital in a $633 million deal that has led to the elimination of more than 250 full-time editorial positions through buyouts offered two days after the finalization of the deal, including at the Pilot and the Daily Press.

Even before Alden’s purchase, Tribune Publishing employment fell by 30%, from 4,114 employees at the end of 2019 to 2,865 at the end of 2020, according to a Chicago Tribune story.

The Virginian-Pilot and Daily Press have decreased their newsroom staffs from 101 full-time employees to 36 workers since September 2018, according to the NewsGuild union. Both newspapers’ offices closed last year, with staff working remotely, and the Pilot’s Brambleton Avenue office in Norfolk, its home for 82 years, was sold to residential developers. Style Weekly, too, closed its office in Richmond’s Manchester neighborhood in 2020, and its full-time staff had dwindled to only four full-time staffers working remotely as of April.

Baldwin’s Facebook message announcing the shutdown was short and did not refer to Alden: “Note from the Editor-in-Chief: Style Weekly will cease publishing after the Sept. 8 edition. We thank our talented staff for their award-winning efforts and our loyal readers for their support. Thank you, Richmond.”

Style’s first issue, printed in November 1982. Image courtesy Style Weekly

Started as a monthly publication in November 1982, Style later became a free weekly paper covering Richmond beginning in 1984 with its sale to Landmark Communications. An alternative to the two daily newspapers — the Richmond Times-Dispatch and the now-defunct Richmond News Leader — Style introduced personal ads, an extensive events calendar, restaurant reviews and annual arts previews to the city, founding publisher and editor Lorna Wyckoff said in an interview Tuesday with Virginia Business. She started the publication in 1982 at her kitchen table. The first issue was a 16-page paper covering the city’s West End, with a very ’80s-appropriate aerobics cover model.

“It is sad, but I’m also proud of our years and proud of what it became,” said Wyckoff, who remained at the weekly through 1992, when it employed 30 or 40 full-time and part-time staffers and ran issues of about 70 or 80 pages. Still, she noted, “it’s kind of an evolution. I think all of us in media have seen this coming. When you have so many changes of ownership in a short period of time, as they have, I think it’s hard to find your way.”

Style also was the home of the popular “You’re Very Richmond If” and “Best of Richmond” features, and it garnered awards and praise for its feature profiles, news photography and news coverage, even as its full-time staff shrank in recent years. In April, Style won 32 Virginia Press Association News and Advertising Contest awards for its work in 2020, including a best-in-show photography award won by staff photographer Scott Elmquist.

“The real joy is in continuing the jobs we love and serving the community with useful, insightful, locally produced stories,” Baldwin wrote in April, noting the difficulty Style had producing the publication during the COVID-19 pandemic with a small staff. “Doing that takes serious, around-the-clock commitment and determination — not to mention unselfish attitudes focused on the team — in order to steer a small alt. weekly into its 40th year.”

Editor’s Note: Virginia Business Associate Publisher Lori Collier Waran, Editor Richard Foster, Art Director Joel Smith, Graphic Designer Kira Jenkins and Account Manager Toni McCracken all previously worked at Style Weekly.