Friday morning the American Press Institute reported that the board of Lee Enterprises, based in Davenport, Iowa, which owns 77 newspapers including the Casper Star-Tribune, the Lincoln Journal Star, and the Wisconsin State Journal, unanimously rejected a bid by Alden Global Capital to purchase the chain.
Over the past five years, independent news organizations and newsgroups, most of whom are print-based, have become the target of Wall Street hedge funds and investment groups.
Image courtesy of Fred Moon for Unsplash.
On the surface, this usually gets covered as profit-taking; hedge funds see the increasingly precarious financial state and the broken revenue model of newspapers as easy pickings. In the case of Alden, one of the country’s largest newspaper owners, they have a reputation for buying news organizations, instituting cost cuts, stripping them of physical assets, and laying off large swaths of newsroom journalists, all in an announced goal to consolidate the newspaper industry.
The board of Lee Enterprises decided that Alden’s offer of $24 per share undervalued the chain and was not in the best interest of the company. One prominent shareholder had threatened to sue if the board sold the company at an insufficient price. (Omaha World-Herald)
“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,” said Lee Chairman Mary Junck. “We remain confident in our ability to create significant value as an independent company and are focused on our Three Pillar Digital Growth Strategy, detailed earlier this year. We have demonstrated accelerating momentum across our platforms as we execute our plan.”
The acquisition tactics of Alden, a New York hedge fund, have become notorious; selling off historic newsroom locations such as the Denver Post building on Civic Center Park and relocating even journalists who cover state capitols out to industrial parks, while forced retirements of seasoned journalists conveniently reduce journalistic oversight.
The rejection marks another setback for Alden, a New York hedge fund intent on acquisitions to achieve its goal to consolidate the newspaper industry. Of course, most of the investigative journalism being done in this country has historically been done by newspapers. So the question could be asked: with shrinking newsrooms, progressively less government and corporate transparency, is the goal consolidation, or reduction of journalistic oversight?
Our Founding Fathers considered the role of the news media so important to functioning democracy, that they wrote protection of the press into the First Amendment of the Constitution. As more and more consolidation appears ready to overwhelm independent, fact-based journalism, it makes locally produced, community journalism more important than ever.
It makes the journalism of local, fact-based news organizations such as Ark Valley Voice more important than ever
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