A Vampiric Hedge Fund Is Eating the Pioneer Press Alive
Alden Global Capital became involved with the PiPress 17 years ago. Minnesota's oldest newspaper has shrunk by over 80% since.
10:56 AM CST on November 15, 2023
The 21st century has not been kind to the news business, to put it lightly. Evaporating print ad revenue, the siphoning of digital ad dollars by Silicon Valley, colossally poor foresight and management from media executives—none of this is breaking news.
But conditions have been uniquely distressing for the St. Paul newspaper that’s set to turn 175 next spring. While the Pioneer Press has endured the same industry indignities as its longtime rival, the Minneapolis Star Tribune, forecasts are (relatively) rosy to the west, compared to almost two decades of bloodletting to the east. And much of that can be attributed to ownership.
In 2014, the Star Tribune lucked itself into the vast business holdings of Glenn Taylor, a homegrown Republican billionaire who favors a hands-off approach; Taylor can afford to simply wear the Strib like a $100 million civic-pride pinky ring. Alden Global Capital, the notoriously secretive hedge fund that absorbed the PiPress in 2012, could easily afford that same approach.
However, that’s not what Alden is designed to do. One of the largest newspaper owners in the country, the New York City-based firm has been described as a "vampire that bleeds newspapers dry," “a biblical plague of locusts,” and “the vulture fund that picked American newspapers apart.” (Presumably its investors call it nicer things.) The well-worn Alden playbook calls on it to act as a rapacious free-market blob, one that gobbles up distressed brands and squeezes the life out of them.
Think those extraction metaphors approach hyperbole? Consider these PiPress newsroom headcount figures provided by its union, the Minnesota Newspaper Guild.
In 2006, when Alden came into the picture as a minority owner, the editorial staff boasted 202 union news workers—reporters, editors, photographers, copyeditors. Ten years later that number had plummeted to 78. The latest tally from September: a skeleton crew of 29 guild members in the newsroom, plus a handful of managers. Union workers on the ad and circulation side have disappeared at a similar clip. In total, the Pioneer Press has shed 336 union jobs during the Alden years. (The Strib’s unit, of which Racket staffers were once a part, dipped from 309 to 209 during roughly that same span.)
Reporter Nick Woltman remembers joining the six-person business desk in 2012. Today, he says, the PiPress doesn’t have a single dedicated business reporter: “We don't have the people—everybody just works their asses off."
"That's the classic Alden play," says Julie Reynolds, a California-based journalist who once worked at an Alden-owned paper and recently wrote about the company for Columbia Journalism Review. "The journalists who remain at the Pioneer Press are doing heroic work. They're taking on three to four times their previous workloads, doing their best to cover what's important in their community despite horrendous working conditions and the constant threat of cuts."
MediaNews Group, the subsidiary of Alden that owns PiPress and 67 other dailies, didn’t respond to Racket’s requests for an interview; PiPress VP/editor Mike Burbach politely declined to comment.
“It's tough to look across the river and see a super successful news organization that appears to be firing on all cylinders financially,” Woltman says. “And the main difference is they have a benevolent billionaire as their owner instead of a hedge fund with its foot on your throat."
Two Consolidated Corporate Histories
The origins of the Pioneer Press date back to 1849, nine years before Minnesota gained statehood.
“But little more than a week ago, we landed in St. Paul, amidst a crowd of strangers, with the first printing press that has ever rested upon the soil of Minnesota,” Minnesota Pioneer founding editor James M. Goodhue wrote in his introductory issue. “Every person we meet expresses a wish to favor our new and expensive enterprize.”
Beginning in 1889, the newspaper set up shop in the gorgeous Solon Spencer Beman-designed Pioneer Building, which was then St. Paul’s tallest structure. Ridder Publications acquired the PiPress as its morning paper and the Saint Paul Dispatch as its evening paper in 1927, and it would retain family ownership for the next eight decades. Over the years the PiPress and the Dispatch merged, as did Ridder with Knight Newspapers, becoming Knight-Ridder in 1973.
"Man, [the 1990s] were the salad days of the Pioneer Press,” recalls retired editor/columnist Rubén Rosario, who joined the paper in 1991. “In the four years before I got there, they had won two Pulitzer Prizes. We had at least over 200 employees at that time—an investigative team, reporters we'd send overseas for local angles. We were sittin’ pretty, man."
Then the internet happened, setting off an ongoing industry crisis over how all this (arguably very important) work gets paid for absent lucrative print ad revenue. Turns out much of it doesn’t—one quarter of total U.S. newspapers closed between 2005 and 2022.
In 2006 McClatchy Co. swooped up Knight-Ridder for $4.5 billion, and CEO Gary Pruitt almost instantly decided to sell off the lower-performing papers he had inherited, including the PiPress. Additionally, McClatchy worried that owning two major Twin Cities media properties—the Strib and its crosstown rival—could arouse antitrust concerns. As PiPressers awaited their corporate fate, reporter Aron Kahn issued what would become a grimly non-prophetic wish.
"Our hope, really, I think, is a private investor,” he told Minnesota Public Radio. “A family, a person who thinks the Twin Cities deserves a second daily newspaper voice in journalism—who understands that we do make a very good profit."
Instead they got “Lean” Dean Singleton, the ruthless cost-slasher at the helm of Denver-based MediaNews Group.
"Dean Singleton was put on this planet to run news businesses; he wanted to make them profitable, even if he wasn't necessarily well-loved at all by rank and file journalists" says an anonymous ex-PiPress reporter of 15+ years. "As opposed to Alden, which, really, it was never clear they gave a shit about news."
As MediaNews Group crawled out of bankruptcy in 2012, one of its minority owners seized majority control: Alden Global Capital.
“It’s still a secular miracle that we have two papers in this market,” says David Brauer, a retired journalist who held the last official media critic gig in town. “I remember doing a Twin Cities Reader story called 'When Ownerships Collide'' way back in 1987, when the Strib finally moved into the east metro and became 'The Newspaper of the Twin Cities.' The PiPress is still around 36 years later, despite not having a billionaire benefactor and, in fact, being operated by cash-sucking leeches.”
If the Pioneer Press dates back to horse ‘n’ buggy times, Alden’s history begins with a 1960s episode of the TV game show Dream House. That night Randy Smith and his wife, Kathryn, out-competed another couple in rounds of trivia before a live studio audience. For their prize, they could choose the titular dream house or $20,000 cash. Smith opted for the money, which he’d parlay into a massive Wall Street fortune by the ’80s.
A 1991 New York Times profile accused Smith of “profiting from other people’s misery by trading the stock and debt of troubled companies,” adding that it “seems to be that Smith and its web of affiliates are out, first and foremost, for themselves.” At one point, per the Village Voice, a painting of a literal vulture adorned the lobby of Smith’s BDS Securities. By the ’90s Smith had become intensely private, according to the Atlantic’s definitive 2021 account of Alden’s journalism wheelings/dealings. Few photos of him exist; he stopped agreeing to any interviews.
The younger, less-reclusive Heath Freeman emerged as Smith’s protégé around 2001, though McKay Coppins of the Atlantic reports that even those close to them don’t fully understand the partnership. “If you went into a lab to create the perfect bro, Heath would be that creation,” a former executive at an Alden-owned company told Coppins. Freeman, at least briefly, attempted to fashion himself as a savior of journalism. “The only way Heath could refer to a newspaper was as ‘these assets'... Don’t buy the idea that Alden is trying to save newspapers. I don’t think any idiot would buy that,” “Lean” Dean Singleton told the Washington Post in a 2020 story headlined "Heath Freeman is the hedge fund guy who says he wants to save local news. Somehow, no one’s buying it."
Another example of Freeman’s less-than-convincing newsman bona fides comes from Coppins:
“A story circulated throughout the company—possibly apocryphal, though no one could say for sure—that when Freeman was informed that The Denver Post had won a Pulitzer in 2013, his first response was: ‘Does that come with any money?’”
"It's vulture capitalism on steroids, no question about it. But ya know what? That's what they are,” ex-PiPresser Rosario says. “If you thought they were gonna be paragons of quality journalism, you gotta be naïve. Is that terrible? Is that morally reprehensible? That's in the eye of the beholder. Before Alden came into the picture, there were layoffs and buyouts—human capital is always taken for granted. They've just taken it to the slash ‘n’ burn level."
The PiPress’ Ongoing Alden Era
Alden got right to its trademark gutting when the Pioneer Press became a full asset 11 years ago.
In 2013 the newspaper sold off 1 Ridder Circle, its longtime printing facility in downtown St. Paul, and began contracting its physical production through the Star Tribune; 170 workers lost their jobs. Two years later 345 Cedar St., the downtown PiPress HQ since 1984, was unloaded to a luxury apartment developer.
"When they decided to sell the building downtown, we had a meeting about it and I asked, so, does our paper get any benefit out of the sale?” says one current veteran reporter who requested anonymity. “And the answer was no. It was one of those moments where I was like, 'Oh, god…’"
“It was soul-crushing… nauseating,” adds the anonymous ex-worker. “We used to say they were cutting down into the bone, and at that point they were taking out bone marrow."
There’s reason to be suspicious: Court documents show Alden has used newspapers as piggy banks to fund its various Wall Street gambles on real estate, bankrupt pharmacy companies, and Greek debt bonds. Making matters more infuriating, Randy Smith spent $57.2 million on 16—sixteen!—Palm Beach mansions around the same time the PiPress was being stripped for parts. “Money is tighter than it was in the heyday of newspapers, but there's no reason it should be this tight,” says reporter Frederick Melo, an 18-year PiPress vet.
Reporter Woltman, who’s active with the paper’s union, laughs when he’s asked about sitting across the bargaining table from MediaNews Group.
"They're tough to negotiate with because all of the usual things that would maybe sway a normal employer, one who lives in your community... it doesn't work on them,” he says, adding that the union did secure its first raises in five-plus years this past June. “The national union, the News Guild, has held protests outside of Alden’s headquarters in New York, and they just don't care. They aren't shameable.”
Interestingly, the five current and former PiPress journalists we interviewed for this story each complimented the paper's managerial ranks for helping keep the leaky boat afloat—rare praise to hear inside a union shop. If you’re still aboard after all these years in the maw of Alden, they figure, you must be a true believer. "There's a family-oriented feel to the paper that I don't think you'd get anywhere else,” Melo observes.
And they express gratitude for the past three (relatively) stable years: There haven't been any buyouts, job vacancies are being refilled, and subscription revenue is reportedly trending in the right direction. Still, there’s the ambient dread of knowing, given the barebones workforce, that your newspaper is letting stories slip through the cracks every single day.
"It got to the point where it's like, 'How are we even getting a paper out every day?'” the anonymous current reporter says. “But we do, and given what we've got, I think we do a pretty good job. We have very loyal readers who really support this paper."
But, that same worker continues with a weary chuckle, MediaNews Group shutting down the newspaper tomorrow wouldn't come as a total surprise.
What’s the Future of St. Paul’s Newspaper?
While the 30 or so PiPressers who produce the news mostly work remotely, Woltman reports, there’s a strong desire to at least have the option to work at something resembling a traditional newsroom. The current configuration is a small, lonely constellation of conference rooms and IT desks inside a rented-out office building.
"The culture of a newsroom is one of the reasons I love this profession," says the anonymous ex-worker. "It was tough, after the pandemic. It was like not having a home; it made me think this isn't going to be fun anymore... I didn't know how to get my fix of that culture."
And there’s an even stronger desire to no longer be perma-squeezed by Alden Global Capital. Signal flares have been fired.
In 2012, PiPress workers bought an ad in the Star Tribune that asked for a local, community-minded buyer to rescue them from Alden. (“Our lawyers say don’t waste your time on it until the government will allow you to do something like that,” Glen Taylor told Twin Cities Business in 2016, raising seemingly valid billionaire-owned media duopoly concerns.) Another group of PiPress workers later encouraged a two-year takeover attempt by a collection of local investors, but those efforts evaporated.
Due in part to Alden’s gut job, the leaner Pioneer Press produced a $10 million 2017 profit at a 13% margin, industry analyst Ken Doctor wrote via Nieman Jouralism Lab. That prompted Doctor to posit: “Alden Global Capital is making so much money wrecking local journalism it might not want to stop anytime soon.”
Should the average Twin Citian care about the plight of the Pioneer Press? Frederick Melo, echoing all of his current and former colleagues we spoke with, sure thinks so.
"I don't think people realize—when there isn't a reporter in the room, when there's nobody watching the public purse—the degree to which people get away with stuff,” he warns. “You need public pressure, and people need to know their paper isn't what it could be. If it keeps getting cut, democracy suffers.”
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