In buying a 25.2% stake in Tribune Publishing, owner of the Chicago Tribune Alden Global Capital has gained substantial influence over the company. This has moved workers in a frenzy who took to social media to express outrage and fear for their jobs as New York-based Alden is known for slashing jobs as its first order of business.
“Their actions say that they don’t see a growth story in media,” said Joshua Benton, director of the Nieman Journalism Lab at Harvard University. “They are intent on cutting costs to the bone and beyond and pulling cash out along the way.”
Alden spent $117.9 million to acquire the Tribune but its strategy remains unknown and Alden did not respond to an interview request Wednesday.
Michael Kupinski, director of research at Noble Capital Markets, noted that pattern in saying the Alden sale may hurt the longterm prospects of Tribune Publishing.
“In our view, Tribune’s clean balance sheet, significant cash flow and motivated seller all made it an easy target,” Kupinski wrote. But noting Alden’s reputation for milking cash flow, he added, “We believe that there is increased risk in an unfavorable transaction or that the company will not invest in its digital transition as aggressively as originally planned.”
Alden runs its newspapers through Media News Group and its titles include the Boston Herald, the Denver Post and the Orange County Register.
The Tribune acquisition was announced as the former GateHouse and Gannett chains closed a $1.1 billion merger that had heavy involvement from hedge funds.
