Hedge-Fund ‘Vultures’ Circle Another Newspaper In Colorado

FORT COLLINS, CO – By Corey Hutchins for The Colorado Independent. The vultures are circling again. But I’m sick of the metaphor. It’s time for a new one. In coverage of The Denver Post’s cost-cutting hedge-fund owners, the caricature has been a vulture, circling dead and dying things, picking at carcass bones of a shriveled-up newspaper chain rotting on the side of our late-capitalist highway to some future hell where local newspapers no longer exist.

Which brings me to The Nothing. I vividly recall a college friend’s deadpan remark while watching The Neverending Story how The Nothing from that film was the scariest villain in all of cinema. Because what, really, is worse than nothing? And a nothing that, like, grows?

“A hole would be something. Nah, it was Nothing. And it got bigger and bigger,” says the character Rock Biter in the movie. “What you have told us is also happening where I live in the West,” replies the character with the racing snail. “A strange sort of … Nothing is destroying everything.”

This week, The Nothing has its eyes on Gannett, one of the nation’s largest newspaper chains.
From Columbia Journalism Review (emphasis mine):

The Wall Street Journal’s Carl Lombardo reported that MNG Enterprises Inc. is planning a bid for Gannett, the publishing powerhouse that owns USA Today as well as important local papers such as the Arizona Republic, the Detroit Free Press, and Iowa’s Des Moines Register. The scoop might normally have passed under the radar as standard-issue jockeying—except MNG Enterprises is better known as Digital First Media, the prolific private-equity-backed publisher that has become an industry byword for cost-cutting and job-slashing.

Digital First Media is, of course, the owner of The Denver Post. It’s controlled by the Alden Global Capital hedge fund, which drew civic side eyes for much of last year after gutting the Post newsroom by about a third, leading to mass layoffs and voluntary departures.

“Is this strip-mining or journalism?” asked The Washington Post’s Margaret Sullivan about the public behavior of this particular corporate citizen. And now DFM, that dark and growing force of absolute oblivion, is looking to swallow up a journalism institution that owns roughly 100 newspapers — including The Coloradoan in Fort Collins. Oh. What could go wrong?
From Ken Doctor at NeimanLab:

What all this means is Gannett, like it or not, is in play. Even two years ago, that statement might have … dropped jaws — Gannett was clear it wanted to be the consolidator, not the consolidatee. But no longer: In an industry of unending downturn — and in a world flirting with a who-knows-how-deep recession to come — all bets on the conventional wisdom of newspaper ownership are off. Anyone with the appetite and dollars to buy can, whether it’s a Patrick Soon-Shiong or an Alden Global Capital.

So what does this mean for Colorado? Gannett’s only newspaper property here is the Coloradoan, a paper with reader engagement initiatives that have impressed me over the years and whose former editor helped fight for expanded open records laws.

“You know Gannett’s reputation, and we’ve lived through the company earning it. Even so, the prospect of DFM has us shook,” someone in the Coloradoan newsroom told me. In 2016, a wave of nationwide layoffs at the Gannett chain licked the Coloradoan. The paper’s editor, Eric Larsen, says the newsroom is watching the DFM buyout talks closely.

“Given that we’re journalists who have seen what’s transpired at the Post over the years, there’s natural trepidation about what the future could hold under any new ownership,” he says. “But I wouldn’t say it’s dominating discussion here.” (The Coloradoan also publishes The Windsor Beacon, though that paper no longer has its own staff.)

On Wednesday, USA Today, which is owned by Gannett, reported a quadruple-bylined story datelined from Denver about a potential DFM takeover. From the piece:

If Alden’s latest plans come to fruition, it will be bringing its ownership style to a newspaper near virtually every American. MNG Enterprises, which also operates as Digital First Media and is owned by the hedge fund Alden, has launched a hostile takeover bid for Gannett, the nation’s largest newspaper publisher by paid circulation. With a national newspaper in USA TODAY and 109 local brands in cities around the country, Gannett would make for a unique – and landscape-shifting – acquisition for MNG. … In interviews with roughly a dozen journalists who experienced Alden’s takeover in Denver, a dire picture emerges of what happens when the hedge fund comes for the newspaper in your town. They described crippling personnel cuts, corporate meddling and a stewardship that results in a newspaper being hollowed out to a shell of what it once was. A spokesperson for MNG, Paul Caminiti, did not respond to specific questions for this article but issued a statement crediting the company’s “successful track record” enabling it “to run newspapers profitably and sustainably so that they can continue to serve their local communities.”

The USA Today story offers a good recent history of The Denver Post’s problems under its hedge-fund owner, quoting some of the voices familiar to this newsletter and recounting their battles. It ends with this kicker: “Former Denver Post reporter Brian Eason, in describing corporate entities like MNG, said that he believed newspapers aren’t just ‘dying from natural causes. Greed is killing them.'”

READ MORE in The Colorado Independent.

Vulture image by Ryan Paulsen for Creative Commons on Flickr