WASHINGTON, DC – Today, U.S. Senator Sherrod Brown (D-OH) sent a letter to Alden Global Capital LLC, urging the hedge fund to drop its bid to takeover Gannett newspapers. Alden Global Capital has a history of buying local papers only to then turn around and dismantle them by firing reporters and selling company assets. Gannett publishes USA Today as well as 11 local newspapers in Ohio. In February, Gannett rejected a hostile takeover bid from MNG Enterprises, run by Alden Global Capital.
Last week, the Washington Post reported that Alden is now under investigation by the Department of Labor for taking almost $250 million in employee pension savings and investing it in its own accounts. In some cases, the company moved 90 percent of retirees’ savings into two of its own funds, according to the Post.
“Local newspapers promote civic engagement and better-informed citizens, both of which are important goals for a productive, inclusive society, and a functioning democracy. Your newspaper-killing business model is bad for newspaper workers and retirees, bad for communities, bad for the public, and bad for democracy. I ask you to immediately drop your bid to buy Gannett and spare Ohio communities, and others served by Gannett papers, the consequences of an Alden Global Capital newspaper takeover,” wrote Brown.
In Ohio, Gannett runs the Telegraph-Forum, Chillicothe Gazette, Cincinnati Enquirer, Coshocton Tribune, The News-Messenger, Lancaster Eagle-Gazette, Mansfield News Journal, The Marion Star, The Advocate, News Herald, and the Times Recorder.
A copy of the letter can be found below and here.
Dear Mr. Freeman and Mr. Smith:
I am writing to urge you to stop immediately any attempt at a hostile takeover of Gannett newspapers. Gannett is the largest national newspaper chain and owns 11 Ohio newspapers. Alden Global Capital’s previous purchases have resulted in the gutting of newspapers and the related negative impacts on the communities that depend on them. I do not want those same consequences to befall Ohio communities, and I urge you to abandon your attempt to buy Gannett.
Ohio’s Gannett-owned newspapers provide news and local community coverage throughout the state. Specifically, your hostile takeover of Gannett would affect the following newspapers and their communities: Telegraph-Forum in Bucyrus, Chillicothe Gazette, Cincinnati.com, Coshocton Tribune, The News-Messenger in Fremont, Lancaster Eagle-Gazette, Mansfield News Journal, The Marion Star, The Advocate in Newark, News Herald in Port Clinton, and the Times Recorder in Zanesville. All of these institutions provide important local perspective on community developments, state government, and national news. Moreover, local newspapers promote civic engagement and better-informed citizens, both of which are important goals for a productive, inclusive society, and a functioning democracy.
These Ohio newspapers, like the rest of print media in the United States, face many challenges to keep their readers informed. Changes in the advertising sector combined with the prevalence of online news sources have made it more difficult for newspapers to stay afloat financially. I am committed to promoting and advancing policies that will address the increasing concentration in the advertising industry and help newspapers find alternative sources of funding to make it economically viable for them to keep printing the news. As we work to address our print media crisis, we cannot forget that newspapers are a public good, and they should be treated as such. It is bad for our country if newspapers are acquired and gutted by hedge funds like yours, run into the ground for short-term gains, then tossed aside after you have thoroughly depleted their assets.
Since Alden Global Capital now owns approximately 200 local newspapers, we know that is what will happen if you buy Gannett. First, you purchase media companies that are financially vulnerable. Next, you lay off huge portions of newspaper staff and consolidate or terminate local weeklies or newspaper sections. Then you sell most of the paper’s assets, including its headquarters and other real estate. At the end of this process, all that is left is a shell of a newspaper that cannot accomplish all the reporting and investigating that it used to do, and that its community deserves.
This history of destruction is more than enough to give me and my constituents tremendous concern about your attempted takeover of Gannett. But, in a development that is equally concerning, last week we learned your company is now under investigation for potential violations of federal law. According to The Washington Post, your company is under investigation by the Department of Labor for taking almost $250 million in employee pension savings and investing it in your own funds. According to the Post article, in some of these cases, your company moved 90 percent of retirees’ savings into two of your own funds. While the results of the investigation are forthcoming, it appears those investments are, at best, conflicted mismanagement of pension funds and, at worst, outright theft from the employees and retirees at the papers you have worked so hard to destroy.
Your newspaper-killing business model is bad for newspaper workers and retirees, bad for communities, bad for the public, and bad for democracy. I ask you to immediately drop your bid to buy Gannett and spare Ohio communities, and others served by Gannett papers, the consequences of an Alden Global Capital newspaper takeover.