Tribune Publishing, owner of major U.S. newspapers, to be acquired by hedge fund known for slashing newsroom jobs

This article was originally published on this site

Bainum’s nonprofit Sunlight for All Institute will also acquire the Capital Gazette in Annapolis, the Carroll County Times in Maryland and several other Baltimore-area weeklies and magazines.

Newspapers have been ravaged by years of competition from digital competitors, especially Facebook and Google. The industry has consolidated in the past few years in an effort to stem the tide of fleeing advertisers and readers.

Alden, a privately held company based in New York, has been among the few buyers of newspapers and one of the industry’s most aggressive cost-cutters. It has slashed newsroom jobs and sold off assets, such as real estate, of the newspapers it has acquired.

It currently owns some 200 publications, including the Denver Post, St. Paul Pioneer Press and San Jose Mercury.

It is now poised to takeover some of the industry’s best-known, if recently humbled, names. Tribune also owns the Hartford Courant, the Sun-Sentinel of South Florida, the Morning Call in Allentown, Pa. and the Daily Press and Virginian-Pilot in Hampton Roads.

Alden already owns about 32 percent of Tribune, and will buy the remaining share for $17.25 per share, valuing the entire company at around $520 million.

Bainum is the chairman of Rockville-based Choice Hotels, the giant hotel franchise company with more than 6,900 properties worldwide. The company was founded by his late father, Stewart Bainum Sr., but Bainum Jr. oversaw its rapid growth during the past 20 years.

Bainum was also chairman and chief executive of Silver Spring-based nursing home operator Manor Care from 1987 to 1998 when it merged with another company, Health Care and Retirement Corp.

He was an unsuccessful candidate for governor in Maryland in 1994, and served in the state legislature from 1979 to 1987.

While Alden had been in talks with Tribune for months, news of the acquisition was met with disappointment by several Tribune newspaper reporters and union leadership, which had long been concerned about Alden’s approach.

“Absolutely terrible news,” tweeted Chicago Tribune city hall reporter Gregory Pratt.

News Guild president Jon Schleuss called it “a terrible deal for the company, the workers, the shareholders and our democracy. Alden is only interested in extreme short-term profits by cutting everything to the bone. They have no long-term plan.”

Alden had offered to buy the balance of Tribune in December; its all-cash offer reflects a 35 percent premium over the Tribune’s closing stock price on Dec. 30, the last trading day before Alden’s offer was publicly disclosed.

The company said the offer has been approved by Tribune’s board and is expected to close in the second quarter, if shareholders approve.

Tribune’s second largest shareholder after Alden is billionaire Patrick Soon-Shiong, who acquired the Los Angeles Times and San Diego Union-Tribune from Tribune in 2018. Soon-Shiong owns 24 percent of Tribune’s stock.