Tribune Publishing directors said Friday shareholders approved Alden Global Capital’s offer to buy the company, heralding a new and uneasy era at the Chicago-based media company and turning aside pleas from its journalists and others who made opposition to the sale into a fight for the soul of journalism.
But the outcome could be uncertain with an announcement from the company’s second-largest shareholder, Dr. Patrick Soon-Shiong, that he abstained from voting.
The company announced the result at a special board meeting without giving vote totals. Alden’s $17.25-a-share acquisition will take the 174-year-old company private.
Alden is acquiring the roughly two-thirds of the company that it doesn’t already own. Tribune Publishing owns the Chicago Tribune and eight other large dailies.
Approval would indicate Soon-Shiong supported the sale. With nearly a quarter of Tribune Publishing shares, Soon-Shiong, owner of the Los Angeles Times, could have scuttled the sale on his own. Alden needed the approval of holders of two-thirds of company shares outside of its control.
“Dr. Soon-Shiong abstained from voting,” spokesperson Hillary Manning said in a written statement. “For the past several years, Tribune Publishing has been a passive investment, as he has remained focused on the leadership roles he holds across his companies.” It said Soon-Shiong and his family will focus their activities on the Times and the San Diego Union-Tribune.
Late Friday, Tribune Publishing said holders of more than 81% of non-Alden shares accepted the offer. The company said one of its largest shareholders, clearly Soon-Shiong, returned proxy ballots without check marks in the “yes,” “no” or “abstain” boxes. The rules said returned ballots with no checked boxes would be counted as favoring the sale.
The company said it expects the sale to close Tuesday. The exact status of Soon-Shiong’s votes could produce shareholder lawsuits.
Alden is a New York-based hedge fund widely criticized for accumulating financially troubled newspapers and deeply cutting payroll and selling assets. It already owns about 200 newspapers through a separate company, MediaNews Group, and its Tribune Publishing deal would make it the nation’s second-largest publisher behind Gannett.
In a statement issued after the board meeting, Alden President Heath Freeman said, “Local newspaper brands and operations are the engines that power trusted local news in communities across the United States. 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.”
The Alden bid survived what the Tribune’s board briefly adjudged as a possibly superior offer from Maryland hotel executive Stewart Bainum Jr. Bainum offered $18.50 a share, or $680 million, roughly $50 million more than Alden, putting up about $200 million of his own money. He scrambled for investors to cover the rest, with a plan to spin off Tribune-owned newspapers to owners interested in preserving local media.
Bainum had a brief partnership with Swiss billionaire Hansjörg Wyss, who was interested in the Chicago Tribune. But Wyss bowed out in April after reviewing the company’s books. Sources said he concluded he’d have to spend too much to give the paper national prominence and a voice in causes dear to him, such as the environment.
No Chicago-area investor emerged to join Bainum’s group.
Bainum’s interest was preserving the Baltimore Sun’s coverage of local affairs, perhaps through nonprofit ownership. In a statement reacting to the sale, he said, “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.” He said he “just might make some news” in the days ahead.
The company’s board meeting was held virtually and lasted about 11 minutes with no discussion.
Tribune employees filled social media with criticism of the sale. Some said Soon-Shiong was cowardly if he did not mark his ballots. Also part of the opposition was the NewsGuild-CWA union, which represents editorial employees at most of the company’s papers.
“Today, Tribune Publishing shareholders voted to put profit and greed over local news in our country,” said a statement from the paper’s bargaining units. Last Saturday, they organized rallies in their cities to urge defeat of the Alden bid.
The statement continued that the union members are united to “fight against Alden to protect local news and the cuts that they will inevitably try to make. We stand ready, willing and able to fight.”
Gregory Pratt, a City Hall reporter for the Chicago Tribune, circulated his own letter this week to Soon-Shiong asking him to spike the sale. “Alden ownership would be a disaster for Chicago, democracy and society at large,” said Pratt, president of the Chicago Tribune’s union.
Alden gained its dominant stake in the company in late 2019. Since then, Tribune Publishing has been slashing staff and cutting real estate costs, two steps the hedge fund is known for at its other publications such as the Denver Post and the St. Paul Pioneer Press.
Tribune Publishing’s employee headcount dropped by 30% in 2020 to 2,865 at the end of last year, according to the company’s annual reports.