In its bid to acquire investment-starved newspaper chain Tribune Publishing, the hedge fund Alden Global Capital vowed to provide $375 million in cash to the owner of the Chicago Tribune, the Baltimore Sun and others.
But industry and financial experts have looked at the fine print and see something starkly different: Alden, they say, has already signaled it plans to saddle Tribune with debt, and it may not have $375 million available to begin with.
“We question whether Alden has the cash to make good on its equity commitment, given that Tribune stock and illiquid assets such as MediaNews Group and real estate make up a significant portion of Alden’s assets,” said PESP Executive Director Jim Baker told the Washington Post.
Experts say a heavy debt burden is not likely to benefit Tribune, which only nine years ago emerged from its last bankruptcy.
The stakes for staff and readers of Tribune papers could not be higher. Alden has stripped dozens of its other newspapers of employees and assets to boost profits.
Billionaire hotel mogul Stewart Bainum, who has sought to put together a competing bid for Tribune, has said he would sell many of the individual papers to local owners and keep the Sun and other Maryland papers.
Alden’s record of aggressively cutting costs and mismanaging employees’ pension funds has drawn intense criticism and scrutiny from the national NewsGuild union, which represents more than 25,000 communications workers in the United States and Canada.
“Alden’s track record has been clear,” said Ann Marie Lipinski, curator of the Nieman Foundation for Journalism at Harvard, and a former editor of the Chicago Tribune.
“Nothing about their interest — either at Tribune or at other properties — suggests that they are motivated by a desire to enhance quality journalism in any of these communities. If there are additional financial pressures, it can only exacerbate a grim situation.”