Hedge Fund Gets Rich By Gutting Pioneer Press: Report

SAINT PAUL, MN — New York-based hedge fund Alden Global Capital has overseen major cuts to The Saint Paul Pioneer Press staff (now fewer than 60 people), and yet the paper produces $10 million in yearly profit at a 13 percent margin. But media watchdogs say the firm's quest for profit comes at the expense of local journalism.

Alden Global Capital has a majority share of Digital First Media, which owns the Pioneer Press and 61 other daily newspapers across the United States. The Nieman Lab reported Friday that Digital First "has ridden its deep cuts to nearly $160 million in profits and the highest margins in the business."

"Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon," writes Ken Doctor.

Minnesota Public Radio's Bob Collins echoed Doctor's concerns in a post Friday.

"There’s good money in destroying your local newspaper, which will come as awful news to those who hope the St. Paul Pioneer Press can be saved from the clutches of Alden Global Capital," writes Collins.

He said what's left of the Pioneer Press staff "heroically puts out a newspaper against the odds in the belief that the community sees the value of a newspaper beyond being a corporate ATM."

Collins added that Alden Global Capita is best known for "dismantling the Denver Post."

In April, the Denver Post accidentally published a photo of the wrong baseball field in a story about the Colorado Rockie's Coors Field opener. The news organization blamed a "production error," but other reporters and journalists worried that the error was a symptom of the gutting of the Post newsroom by Alden Global Capital.

Meanwhile, bucking the nationwide trend among daily newspapers, the Minneapolis Star Tribune is home to a uniquely robust newsroom.

Rick Edmonds writes in Poynter this week that the paper's success can be attributed in part to "enlightened billionaire owner" Glen Taylor, who also owns the Minnesota Timberwolves.

Thanks to Taylor, the Star Tribune is not burdened by debt and unlike the Pioneer Press, there are no expectations for large profit margins.

The Minneapolis paper employs 245 editors and reporters.

"I am not saying that the Star Tribune is bullet-proof — those optimistic out years might for an assortment of reasons not materialize," writes Edmonds. "But at a time when there is ample cause for discouragement in the industry from extreme financial challenges, I would say the Star Tribune story is worth telling and retelling."

Things are very different in the shrinking Pioneer Press newsroom. Newspaper advocates want Alden Global Capital to sell its newspapers, but as Doctor writes in Nieman Lab, that's much easier said than done.

Patch's request for comment from Digital First Media was not immediately returned.

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