Bill Berkowitz for BuzzFlash: Predatory Hedge Fund Called “Destroyer of Newspapers” in New Goldsmith Documentary “Stripped For Parts”

April 12, 2022

By Bill Berkowitz

(jamieca)

Rick Goldsmith found his new film project after reading about the ‘Denver Rebellion,’ an uprising in 2018 of Denver Post newsmen and women following a drastic staff cutback by its owner Alden Global Capital.  The two-time Academy Award nominated director’s, new film, Stripped For Parts: American Journalism at the Crossroads, exposes the damage being done to local journalism by predatory hedge funds.

In October 2021, The Atlantic’s McKay Coppins wrote: “In May, the [Chicago] Tribune was acquired by Alden Global Capital, a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country.” In short order, Alden Global Capital gutted twenty-five percent of the Tribune’s staff, one of its highest profile acquisitions.

“Two days after the deal was finalized,” Coppins reported, “Alden announced an aggressive round of buyouts. In the ensuing exodus, the paper lost the Metro columnist who had championed the occupants of a troubled public-housing complex, and the editor who maintained a homicide database that the police couldn’t manipulate, and the photographer who had produced beautiful portraits of the state’s undocumented immigrants, and the investigative reporter who’d helped expose the governor’s offshore shell companies. When it was over, a quarter of the newsroom was gone.”

According to Coppins (https://www.theatlantic.com/magazine/archive/2021/11/alden-global-capital-killing-How does this impact journalism, journalists and local communities?

A news junkie from early on, Rick Goldsmith has always admired journalists. He writes: Journalists “are a class of people inquisitive, skeptical, curious, and unwilling to accept facts about the world around them at face value. I value their drive to dig deeper, uncover what is kept secret, make sense and put into context the complex events and issues of our daily lives.”

Over the course of his career Goldsmith has produced and directed/co-directed The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers (co-produced/co-directed with Judith Ehrlich), nominated for an Academy Award for Best Documentary Feature. The documentary film tells the story of a leading Pentagon strategist whose daring act of conscience leads directly to Watergate and the end of the war in Vietnam.  Tell the Truth and Run: George Seldes and the American Press, also nominated for an Academy Award for Best Documentary Feature, which chronicles the life of a pioneering muckraking journalist and press critic.  Everyday Heroes (co-produced/co-directed with Abby Ginzberg) which is a behind the headlines look at AmeriCorps and a provocative and instructive look at youth, race and national service.  Mind/Game: The Unquiet Journey of Chamique Holdsclaw, chronicles “the female Michael Jordan” from troubled family life to basketball superstardom, revealing a long-hidden battle with mental illness.    

 I recently interviewed Goldsmith on his new film.

Bill Berkowitz: In 1996, you produced the academy award-nominated film, “Tell the Truth and Run: George Seldes and the American Press,” an examination of one of America’s earliest muckraking journalists and a look at censorship and suppression in the news media. Now, some twenty-five-+ years later, you’re working on another film about journalism and journalists. What has changed about journalism during that period and what inspired you to take on this project?

Rick Goldsmith: Seldes mourned the increasing absence of two-newspaper towns, citing the recent closing of the St. Louis Globe Democrat, leaving only the Post-Dispatch in St. Louis.  Now we are facing ‘news deserts’ and ‘ghost’ newspapers all around the country. And the St. Louis Post-Dispatch is the flagship of Lee Enterprises, is currently under siege with yet another Alden Global Capital takeover. In 1996, newspapers could turn a profit for well-meaning publishers. No longer. That's why hedge funds like Alden swooped in-because traditional publishers were getting out. 

I got into this project after reading about the ‘Denver Rebellion,’ an uprising in 2018 of Denver Post newsmen and women following a drastic staff cutback. The Post's Chuck Plunkett penned a daring editorial that chastised its owner Alden Global Capital, as a ‘vulture capitalist,’ and continued, ‘Denver deserves a newspaper owner who supports its newsroom. If Alden isn’t willing to do good journalism here, it should sell The Post to owners who will.’ Now here was something new!  Everyone knew that newspapers everywhere were barely staying alive financially. But here was a case where the journalists themselves were rebelling and taking their own employer to task.

BB: We know that after Alden Global Capital bought the Chicago Tribune, it proceeded to gut its newsroom. How did Alden Global Capital move into the newspaper business and how has this impacted on local newsrooms across the country?

RG: Alden's founders are Randall Smith and Heath Freeman, pioneers of ‘distressed investing.’ Distressed investing profits from stripping off assets and severely cutting expenses of bankrupt and failing businesses. Even if the resulting business fails, the hedge fund can walk away with a tidy profit. Alden made its first play for newspapers in 2011, taking over Dean Singleton's chain of 100 papers called Media News Group. Alden’s pattern was to by up newspapers, sell the newsroom buildings, and then slash the newsroom staff via layoffs and buyouts. This had a devastating effect on newsroom after newsroom, shattering morale and leaving communities without adequate media watchdogs to cover government officials, powerful business interests, even school board meetings and high school football games.

BB: The advent of the Internet and Social Media has made it difficult for local newspapers to sustain themselves financially.

RG:  We are living through a time where journalism is taking it on the chops. The business model of newspapers–still the largest source of news by far, even in this digital age–is faltering, for a number of reasons. Including the loss of advertising to Facebook and Google, the changing way that people seek out news, and other challenges presented by the digital age.  But, unknown to many, capitalist greed is also to blame. This is the heart of Stripped for Parts.

BB: Are there any success stories out there?  

RG: The country's entire journalism community has been involved in trying to save local journalism. The Salt Lake Tribune turned into a nonprofit enterprise. The Philadelphia Inquirer has a philanthropic model. Other papers, owned by billionaires, not necessarily hedge funds, appear to care about their communities. And there are many small on-line start-ups, often linked very strongly to their communities, who provide good local journalism. 

 But local journalism produced by a body of reporters, editors, and photographers that is extensive enough to cover a city, county or town, is increasingly rare. The problem with private equity, hedge fund ownership and control -- and particularly by Alden Global Capital -- is that there is no civic mission to continue robust journalism. This is a ‘vulture capitalism’ business model that extracts as much profit as possible, while killing off watchdog journalism. When the largest news organizations in town -- almost always the daily newspapers -- are stripped of experienced newsmen and women in one fell swoop, it is very disruptive to the communities they had been serving.

BB: How did it feel being nominated for two Academy Awards? Has that affected your ability to get funding for your work?

RG: I'm proud of the recognition garnered by those two films, and it is no accident that they were both involved with journalism, which is my passion. My track record helps, for sure, securing funding for documentary films.  But documentary filmmaking, like journalism itself nowadays, has no sustainable business model. Each project is an uphill battle, when it comes to fundraising. And for Stripped for Parts, like each one of my previous films, I've raised enough funds to complete most of production, but there are many expenses still to come -- editing, graphic design, music composition, archival licensing and more. I am hopeful that we’ll be able to raise enough money to get the film out there.

Editor’s Note: Rick Goldsmith will be appear on an April 14 panel titled "What to Do About Hedge Funds in Journalism?" (https://www.crowdcast.io/e/What-to-Do-About-Hedge-Funds-in-Journalism%22/register). Donations to Stripped for Parts can be made at kovnocommunications.org.

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