Tribune

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Publishing shareholders today approved its $630 million sale to Alden Global Capital, a New York-based hedge fund with a controversial track record for slashing newsroom budgets that worries journalists. 

 According to Tribune, holders of approximately 81.28% of the shares held by non-Alden stockholders approved the merger agreement, over the two-thirds minimum required.

“Today’s results represent an important milestone in completing the transaction, and we appreciate the strong support we received from Tribune stockholders,” said Philip G. Franklin, Chairman of the Board and a member of the special committee, in a press release.

An unknown number of proxies from one of Tribune’s largest shareholders were submitted without registering any votes. Tribune counted these blank votes as favoring the deal, which is expected to close May 25..

The shareholder who submitted the blank proxies may have been Los Angeles Times owner Patrick Soon-Shiong, Tribune’s second-largest shareholder. Earlier today, there were conflicting media reports about how Soon-Shiong voted. First, Soon-Shiong issued a statement that said he had abstained.  The Wall Street Journal reported later that his shares “were among those that voted in favor of the deal despite his statement about his vote.”

Tribune didn’t respond to a request for comment while Soon-Shiong couldn’t be reached.

Combining Alden and Tribune will create the second-largest newspaper publisher by circulation.

 The addition of Tribune will bring some of the country’s largest dailies such as The New York Daily News, The Baltimore Sun, The Chicago Tribune, The Orlando Sentinel under the control of Alden. The fund already owns more than 200 publications through its Digital First affiliate, including The Denver Post, Orange County Register, and The St. Paul Pioneer Press.

“Local newspaper brands and operations are the engines that power trusted local news in communities across the United States,” Alden President Heath Freeman said in a press release. “The purchase of Tribune reaffirms our commitment to the newspaper industry and our focus on getting publications to a place where they can operate sustainably over the long term.”

Soon after Alden announced its $17.25 per share offer in February to buy the 68 percent of Tribune that it didn’t own, journalists at Tribune papers launched a public relations campaign against the hedge fund, accusing it of gutting newsrooms in the quest for easy profits. They reached out to local business owners like Maryland hotelier Stewart Bainum to buy Tribune’s papers.

However, the odds of Tribune’s journalists prevailing against Alden were steep. The hedge fund already owns a 32 percent stake in the Chicago-based company. Alden founder Randall Smith sits on Tribune’s board, as do two other directors allied with the hedge fund. Moreover, Freeman, who oversees Alden’s newspaper holdings, has close ties to Smith. 

“We are going to continue to fight Alden Global Capital,” NewsGuild President Jon Schleuss said in an interview. “I’m really angry, and I’m really upset today, but I’m also really optimistic about the future. The fight that journalists have is a righteous one. We are saving our democracy by fighting for our work and our publications.”

Bainum, whose bid for Tribune collapsed after failing to get sufficient financing, remains interested in buying his hometown paper, The Baltimore Sun, or creating a non-profit news organization.

‘I am busy evaluating various options, all in the pursuit of creating locally-supported, not-for-profit newsrooms that place stakeholders above shareholders and journalistic integrity above all,” Bainum said in a press release. “Baltimore has a proud tradition of impactful journalism that resonates within its borders and far beyond, and I am excited to be working with those who are committed to writing its next chapter.”