First, an acknowledgment: I’m late to this party. The Duke Chronicle wrote about former Blue Devils placekicker Heath Freeman last year, when a newspaper union tried to convince the university to cut ties with him. And for good reason: Freeman’s hedge fund, Alden Global Capital, owns Digital First Media, the most hated journalism company on earth, and he is, according to one of his employees, the “number one most-hated dude in the industry.”
Freeman also gives Duke a lot of money—his family’s name is on the Freeman Center for Jewish Life—so the school, of course, refused.
I only noticed the Duke connection while reading The Washington Post’s takeout on Alden and its vampiric strategy, which is, in sum: Buy struggling newspapers on the cheap, fire the journalists, fuck over their communities, sell their buildings, profit.
These are the assholes who a few years ago bought the Denver Post, once one of the best regional newspapers in the country, and hollowed it out into a shell of its former self, then laid off some more people. Things got so bad that the Post’s own editorial board rebelled, demanding that if “Alden isn’t willing to do good journalism here, it should sell the Post to owners who will.”
Alden said sure—as long as those do-gooders pay outrageous sums for their money-making machine.
They did the same thing to the San Jose Mercury News, the East Bay Times, the St. Paul Pioneer Press, the Orange County Register, and the nearly hundred other daily and weekly newspapers they own, leaving big and small metropolitan areas with precious few journalists to report on them. In just a few years, the hedge fund has rendered more than a thousand reporters, editors, and photographers unemployed.
I suppose this business is easy if you don’t give a shit about doing it with any integrity. And Heath Freeman does not.
Here’s how former Post reporter Robert Sanchez described him in the Denver magazine 5280 in 2016:
The little that can be gleaned about Freeman comes via blogs produced at Duke University, where he and his two older sisters are active in the school’s Jewish community. … Freeman earned his undergraduate degree from Duke in 2002 (and was six-for-six in extra points made for the football team). Since then, Freeman’s worked for boutique investment firms and Alden, which he helped found and then develop into one of the country’s leaders in distressed-asset investment. With a portfolio of more than $2 billion, Freeman has made a fortune in what he calls “opportunistic” investing. He donates generously to his alma mater and owns the jersey Duke basketball player Christian Laettner wore when he drained a buzzer-beating two-pointer to defeat the University of Kentucky in the 1992 NCAA Basketball Tournament.
In the past year, Freeman has assumed a much larger role within DFM following the collapse of a deal that would have sold the company to a private equity firm in 2015. His strategy of consolidation and cutting has led to big reductions at several newspapers in California (more than 70 layoffs at the Orange County Register this spring) and at least 150 layoffs across DFM in the summer of 2015. The few people willing to talk on background about Freeman describe him as aggressive and highly intelligent, “flinty-eyed and focused,” and a man who has no real affinity for newspapers. …
“People get the impression our ship is on fire and it’s sinking at the same time,” says reporter Nick Groke, who covers the Broncos for the newspaper. “That’s not because of the people at the Post. It’s because of the number one most-hated dude in the industry, Heath Freeman.”
Anyway, back to yesterday’s WaPo story. DFM is currently making a play for Gannett, the largest chain of daily newspapers by circulation. If successful in this $1.36 billion hostile takeover, DFM, run by a Duke grad who apparently detests newspapers and the people who work for them, would be by far the largest newspaper publisher in the United States.
Like other big media companies, Gannett has been struggling. Its stock has declined 41 percent between June 2015 and the end of 2018, and it too has been laying off journalists.
Gannett—which owns USA Today, the Detroit Free Times, the Nashville Tennessean, and more than a hundred other papers—has been trying to dig its way out, putting resources into transforming its papers into digital outlets and acquiring online advertising technologies. DFM, which owns a 7 percent share of Gannett already, has asked it to stop immediately, calling this investment “pie in the sky.”
It’s possible, probable even, that Gannett’s strategy would fail, but at least it’s trying. DFM won’t try. To hedge funders, journalism is but a commodity to be plundered. They’ll gut the papers, fire the journalists, and scrape them for every last penny.
That’s the model. That’s how Heath Freeman makes money.
This, naturally, isn’t how DFM spins it. In its telling, it saves newspapers by making them profitable and sustainable. Which is true, I suppose, if you define “sustainability” as having no resources with which to practice journalism or hold power to account, if you define “profitability” as eroding the public interest to pad the wallets of your shareholders.
The DFM offer is higher than the value the stock market ascribes Gannett but less than what Gannett’s board of directors thinks the company’s worth. Gannett has so far resisted, but Alden, DFM’s parent company, has been acquiring Gannett-owned buildings—including the headquarters of the Memphis Commercial Appeal and the Asheville Citizen-Times—through another company it owns and then flipping them. (It flipped the Asheville building for a $2.1 million profit on the same day, according to the Post, which doesn’t exactly speak to Gannett’s real estate acumen.) For Alden, part—if not most—of the allure of Gannett is its $900 million in property and equipment.
If past is prologue, DFM will sell those buildings and have whatever journalists survive the inevitable culling to work from some shithole office park in the suburbs or home or Starbucks or whatever. It’s the company’s M.O.
As the Post reports, “Alden subsidiaries are now working to help other media companies monetize their real estate, listing their properties for sale or lease, even as journalists at Alden-owned papers decry their management as ‘insanity,’ as the Denver Post editorial board did.”
Think that money goes back into the company’s hollowed-out newspapers? Don’t be silly.
“Alden has been down this road before,” an analyst told WaPo. “They are the ultimate cash flow mercenary. They want to find cash flow and bleed it to death.”
As I wrote yesterday, the journalism industry—in particular the local daily newspaper—is flailing right now, the culmination of decades of poor decisions and shortsighted corporate rapacity and cultural and technological shifts that were beyond our control. But journalism, whatever the medium, is an elemental part of democracy. If we want democracy to flourish, we need journalism to flourish—to hold power to account, to shine a light on corruption, to air new ideas and debates and criticism, to hold up a mirror to society and demand that it do better.
To do that, someone needs to fund journalism, and the old ways of doing that aren’t working. That’s the part we’ve got to figure out.
But the last thing that journalism—or democracy—needs is a hedge-fund asshole like Heath Freeman running and decimating the largest chain of newspapers in the United States.
Oh well. Go ahead, Duke, keep taking his money.
Because you fail to understand the basics I will provide them: First, the news media is not the same thing as journalism. The news media is about partisan politics and journalism is about objectivity, based in documented fact and truth. Second, your use of profanity demonstrates a lack of professionalism and maturity on your part and negates any credibilty you would otherwise have, and destroy any possibility of respect for you. Third, you brought this on yourselves because you refuse to bring value and worth to what you do.
Thanks for writing and publishing this.