The chairman of Credit Suisse, Antonio Horta-Osório, broke Covid rules for a second time and may have committed a criminal offence in order to attend the Wimbledon tennis finals in London in July, it has emerged.
The latest breach, first reported by Reuters, was discovered through a preliminary investigation by Credit Suisse’s legal team, which found that the former Lloyds Banking Group chief executive broke British quarantine rules by attending the Wimbledon tournament on 10 and 11 July.
United has sought to position itself at the front of the industry’s efforts with a pledge to become ‘100% green’ despite enormous obstacles
On 1 December, a United Airlines passenger plane flew from Chicago to Washington powered solely by fuel made from cooking oils, agricultural waste and other materials rather than fossil fuels.
Billed by the airline as the world’s first fully-loaded passenger flight to run on 100% sustainable aviation fuel (SAF), it was United’s latest attempt to demonstrate its climate credentials. United’s CEO Scott Kirby called it “a significant milestone” for efforts to decarbonize the industry.
A return to pre-pandemic beauty habits means people are heading back to stores to shop for skin care and makeup — and investors are rethinking where they’re putting their cash.
Queensland restaurants looking forward to a bumper Christmas as tourists return are instead shutting their doors as Covid case numbers increase in the state.
Some 300,000 people from Victoria, New South Wales and the Australian Capital Territory, which have been experiencing high case numbers, travelled into Queensland after it opened its borders on 13 December.
Grocery prices are rising. Meat prices are rising more than most other grocery prices. Beef prices are rising more than most other meat prices.
But on the ranch, these are not prosperous times. Even as ground chuck costs more than $5 a pound at Walmart, ranchers complain that they are receiving less for their animals than it costs to feed them.
Rising food prices are likely depressing President Joe Biden’s softening approval numbers. The U.S. economy has added almost 5 million non-farm jobs since Inauguration Day. Yet Biden’s approval rating has dropped into the mid-40s. In a recent Fox News poll, 82 percent of respondents described themselves as “extremely” or “very” concerned about the cost of living. More than scenes of chaos in Afghanistan, the numbers at the supermarket checkout may be weighing Biden down.
On September 8, the White House unveiled an analysis of the problem—and an ambitious plan for action: $500 million in loan guarantees to smaller and regional beef processors.
What’s going on here is bigger than beef. It’s a test of a theory about the U.S. economy—and about a philosophy of government. The theory, expressed most powerfully in a 2019 book by Thomas Philippon, The Great Reversal, is that the U.S. economy is in thrall to a few dominant corporations. In industry after industry, Philippon argued, a few companies have gained the power to keep prices high, wages low, and competitors out. The philosophy of government that follows from this theory is that the government should vigorously police competition, not only by means of traditional antitrust enforcement but also through a broader program of market regulation and intervention.
Market regulation went out of style in the 1970s, a victim of its internal contradictions. As academic critics such as Robert Bork argued back then: If, say, a supermarket gains market share from its mom-and-pop competitors by offering a wider selection at lower prices, you can understand why Mom and Pop don’t like it. But how is it “pro-competition” if the government intervenes to protect Mom and Pop from competitors who are doing a better job of meeting customer needs?
That argument prevailed for most of the past half century. The Biden administration is seeking to change course—and beef is where it’s starting.
To understand the choices facing the Biden administration, here are the two warring explanations of what’s going on with beef.
The first explanation is a classic story of supply and demand. The beef industry has been hammered over the past two years by a series of supply shocks. COVID closed many processing plants. Then, when the plants reopened, they had to work less efficiently, with workers spaced farther apart from one another. Like many other employers, meatpackers have had difficulty hiring enough labor at pre-pandemic wages, so they have had to pay more, which raises their costs.
Meanwhile, U.S. cattle herds have been ravaged by drought across the American West. The 2020 drought was bad; the 2021 drought has been worse. More than one-third of American cattle have grazed under drought conditions in 2021, sometimes—as in Montana and Washington State—extreme-drought conditions. The aggregate national herd has shrunk in numbers, and the animals that have come to market have weighed an average of 15 pounds less than animals weighed a year earlier, according to U.S. Department of Agriculture statistics.
Drought has also pushed the price of cattle feed to dizzying heights, raising beef prices even higher. The feed crisis explains some of the woes of small ranchers. Many cattle spend their early months on a ranch eating grass, then are shipped to a feedlot where they are fattened with corn and other grains. If the feed costs more, the rancher earns less.
Over the past year and a half, surging demand slammed into this constrained supply. Throughout the coronavirus pandemic, the federal government has pumped enormous purchasing power into consumers’ wallets. This extra money—plus consumer cutbacks on other kinds of spending—has enabled consumers to increase their spending at the grocery store; they spent $84 billion more in 2020 relative to 2019.
If this supply-and-demand explanation is correct, then the right policy for government is: Do nothing. Higher prices will encourage ranchers to raise more cattle. Higher prices will enable meatpackers to pay higher wages. Higher prices will induce consumers to substitute other foods for beef. Supply and demand will equilibrate, as they always do. And this time, the high prices can serve another function, too: warning consumers of the pocketbook impact of drought-causing climate change.
But there’s another story to tell, and it’s the story the Biden administration is telling. Meatpacking is becoming a more concentrated industry. Just four companies process more than 80 percent of America’s beef. Even as prices moved down in the early 2010s and up again in the early 2020s, the Big Four packers have been able first to increase, then to maintain, their level of profitability. In less concentrated food industries, notably eggs, prices did not rise nearly as much in 2020–21 as did prices of meat, and especially beef.
Without denying the supply-and-demand explanation altogether, the Biden administration wants to act to multiply competition in the meatpacking industry. It proposes committing $500 million in loan guarantees and direct subsidies to support smaller players against the Big Four. It hopes that more competition will raise the prices that packers pay to ranchers and cut the prices consumers pay at the store.
That’s maybe a forlorn hope. A single large-sized meatpacking plant can cost $200 million, and take many months to approve and build. So $500 million will not buy much additional capacity. Worse, from a Biden administration perspective, meatpackers faced by intensified competition have another option besides paying more to ranchers or charging consumers less: They can squeeze their own costs by, for example, automating workers out of jobs.
The architects of the Biden plan are uneasily aware that it rests on a lot of hopes, guesses, and optimistic assumptions. When pressed on the unlikelihood that their plan will deliver any near-term relief to either ranchers or consumers, they reply that the more fundamental goal of their plan is to improve the resiliency of the U.S. food system. Because meatpacking in general—and beef packing most of all—is so concentrated in a few huge plants, small shocks can disrupt the nation’s supply of meat.
In August 2019, a fire badly damaged one of the seven largest meatpacking plants in the United States, near Holcomb, Kansas. At a stroke, the U.S. lost the ability to process 30,000 head of cattle per week. In May 2021, a cyberattack temporarily closed all of the U.S. processing operations of JBS, the largest meatpacker in the world. That attack disrupted one-fourth of the U.S. beef supply.
Multiplying the number of smaller if perhaps less efficient suppliers can provide some cushions against such shocks in future. That’s the hope anyway, and President Biden has talked a lot about it. But how would that hope work in the real world? The Big Four came to dominate beef packing as they do precisely because theirs is an industry where larger size translates into lower costs and greater efficiencies. The Biden administration is not talking about turning the Big Four into the Big Five. It’s talking about supporting a lot of smaller competitors. What’s to stop the Big Four from undercutting them and driving them out of business far in advance of a crisis in which the extra resiliency might prove useful? When I put this question to officials involved in the Biden plan, they admit that the question worried the president too.
There is one way that the resiliency project can work: if the additional capacity can somehow persuade consumers to pay higher prices. Craft breweries do not compete with Anheuser-Busch on price; they compete on taste. Smaller meatpackers could likewise compete as alternatives that are more humane to animals—or that deliver organic or grass-fed meat. But that means entering the market at the top, not undercutting from below. And because the main obstacles to this kind of niche competition are regulatory, allowing the niche competitors to grow will demand a deregulatory agenda of a kind very different from what the Biden administration seems to have in mind for meatpacking.
Instead, there’s a real risk that the initial commitment of $500 million in aid and loan guarantees to small packers will expand into continuing intervention in the marketplace to keep smaller competitors in business in the face of the higher efficiency and lower prices of the big packers.
As the saying goes, there’s no taking the politics out of politics. Rage at the big meatpackers burns especially hot among ranchers in Montana and the Dakotas. These ranchers are located far away from the feedlots of the Corn Belt to the south, and they feel themselves especially disadvantaged by the industry’s present structure. They even have their own industry group, which broadly supports the Biden administration’s plans. Montana has a Democratic senator right now; North Dakota had one from 2013 to 2019. Unsurprisingly, a Democratic presidential administration listens more carefully to the views of ranchers in states that sometimes vote Democratic than to those from states that less often do.
Yet it would be a mistake to interpret beef policy as merely an expression of regional politics. What’s being proposed for beef is as an experiment in stricter marketplace regulation. If it works—or at least seems to work—for beef, it can be tried elsewhere. But what if it doesn’t work? We’ll be back where we were before the 1970s, when “pro-competition” often turned out to mean “a helping hand to the least capable competitors.” “Resiliency” is an appealing slogan. But what if it translates into plainer English as higher taxes and higher prices?
Actress Ashley Tisdale arrives at the 'Journey 2: The Mysterious Island' Los Angeles Premiere at Grauman's Chinese Theatre on February 2, 2012 in Hollywood, California.
Jason Merritt/Getty
Rolex makes some of the world's most iconic watches, like the Daytona, Submariner, and classic Oyster.
The Swiss company is believed to make roughly 1 million per year, each one by hand.
New Rolexes can be hard to find for a buyer without an established relationship with an authorized distributor.
In a year marked by shortages, one in particular is not like most of the others.
Although the supply of Rolex watches may have briefly been disrupted by production and supply chain problems at the peak of the coronavirus pandemic, that's not the reason they're so hard to find – or so expensive when you do locate one.
The issues of the past two years are a mere blip compared with larger trends happening in the luxury watch market generally and with Rolex specifically, Adam Golden of Menta Watches told Insider.
"Rolex seems to have structured their business in such a way that they're controlling distribution and who gets what, at a retail level," he said. A decade ago most models were available on-demand from authorized dealers (ADs) of the brand, he explained.
Rolex did not respond to Insider's request for comment on this story, but when Yahoo Finance covered the shortage, the company broke its characteristic silence to say that "the scarcity of our products is not a strategy on our part."
The statement also pointed out that all Rolex watches are assembled by hand at one of its four locations in Switzerland, a process that "naturally restricts our production capacities."
On a visit to a dealer in Florida this Summer, Golden said there was just one Rolex available to buy — a ladies' Datejust that a customer had ordered and canceled.
But Golden says watches are still flowing to the brand's preferred ADs, and that the backlog is more illusion than reality. Rolex is generally believed to produce as many as a million watches per year.
"Rolex would like to perpetuate the image that there's a shortage and that there's such high demand that they can't produce enough to satisfy the demand, but I think in reality it's just very controlled release in order to keep that demand super high," he said.
Another result of this constrained supply of new watches is the absolute explosion of prices on the resale market where some timepieces now command far higher prices used than they do at the retail counter.
For example, a steel Daytona is advertised on the Rolex website for $13,150, but over at Chrono24 the exact same watch is listed for more than $36,000.
Rolex is by no means alone here.
Patek Phillipe's Nautilus Ref. 5711 has gotten so popular on the secondary market that the steel sport watches easily triple in value from their retail price, with pre-owned 5711's selling for $100,000 or more. A special-edition Tiffany Blue Nautilus even sold for a record high $6.5 million at auction earlier this month.
Still, Rolex is arguably the leading brand in the pre-owned watch market, which is expected to reach $29 to $32 billion in sales by 2025, according to a report from McKinsey.
"Collectors are looking for alternatives," he told Insider. "So overall, the whole watch market is boosted by this interest in the upper echelon."
Whether the move is strategic or not, the bottom line is Rolex is following a playbook developed under the leadership of André Heiniger, which has served the company well for over half a century.
"Rolex could probably do a number of things to fix the current situation and increase the supplies of these watches and dampen the secondary market," Golden said. "But I think at this point they're choosing not to, because it's good business for them."
They say image is everything and, while that’s not strictly true, perception is certainly vital when it comes to business.
That’s especially the case for chief executives because personal branding is such an important element of leadership.
Most companies will have their own brand, and CEOs can complement and build on this by stamping their own personal branding on the business they head up.
An effective CEO epitomises how their organisation looks, feels and acts. And they have the power to project themselves and burnish its image both inside and outside the company – but only through astute personal brand management.
Not everyone can or want to overshadow their own business brand in the same way that the late Dame Anita Roddick transcended Body Shop or Elon Musk puts even his own Tesla in the shade.
Personal branding can strengthen bonds with customers and therefore strengthen its own standing in the marketplace – on a personal basis rather than just ‘B2B’ or ‘BCB’ level.
A CEO can be an incredibly important asset. But it’s still worth considering a few basic questions when it comes to CEO brand management to make sure that your company is pulling together, and everyone is heading in the right direction.
Why is personal branding so important?
It’s because first impressions count. As the figurehead of the company, your CEO has the potential to have an immediate impact when they’re on company duty and taking part in anything from a speaking engagement with their industry’s great and good to a broadcast interview.
With the right preparation and investment of expert analysis, you’ll get it right and that will mean that you’ll be strengthening bonds with the company on a genuine human-to-human level. But fail to put in the homework and you’ll fail to talk the part or even look the part and the consequences could be devastating.
The CEO can make a huge difference on many levels thank to having the ability to inspire people to come and work with you, inspire and galvanise colleagues, beguile the media or to attract potential investment. More often than not, they’re buying into the person rather than the company, as was the case with Levi Roots and his Reggae Reggae sauce with BBC’s Dragons Den. That’s why a high profile matters so much.
How does the CEO brand work?
It will help if your CEO is an outgoing, charismatic type and as the leading figure in the company, he or she probably will be something of an extrovert when it comes to promoting the company. Not all CEOs seems comfortable in the public gaze. Mark Zuckerberg doesn’t appear to be a natural, but he’s clearly worked out that CEO branding is vital, so he’s worked at it.
That said, it’s important to work with CEOs to make sure that the company brand and the personal brand are aligned. No matter how media-friendly, it will just create confusion if the CEO goes off on a tangent. Every story they tell in public must be harnessed to make sure it is in line with the company’s values and ethos and its overall direction of travel and solidifies the CEO’s standing and personal authority.
A good example of how not to do it comes from across the Pond, and Papa John’s CEO John Schnatter who stepped down as CEO after complaining about the negative impact on the business from NFL stars who were taking a knee – at a time when Papa John’s were NFL sponsors.
But in contrast, Alison Rose, chief executive of NatWest, Dame Carolyn McCall, CEO, ITV, and Clare Woodman, Head of EMEA and CEO of Morgan Stanley International, consistently show how it should be done. That was very much the case when they helped launch, the 25×25 initiative to increase the number of FTSE 100 female chief executives to 25 in the next four years.
“We have targets to get to a 50:50 gender balance,” said Alison, hitting nail on head in a way that showed NatWest means business in lots of ways. “These are not HR targets. These are business strategic priority targets, not quotas. That’s really important.”
How does a CEO brand flourish?
People are interested in the thoughts of a CEO as a leader who sets the tone of company life, shapes strategy and directs tactics and so there should be no shortage of opportunities to engage with carefully targeted audiences inside and outside the company.
There’s just no stopping Virgin Group founder Richard Branson who really does lead by example when it comes to personal brand development as, amongst many other things, he authors a brilliant weekly blog. It’s special because it’s bang on the (Virgin) money every single time. Short and sweet, its carefully written, well researched, the content is wide-ranging and its very topical.
Regular newsletters to staff and monthly company-wide briefings are an important way to maintain the trust of staff and let them know where the company is going. Outside, media opportunities should be carefully curated to enhance the CEO stature and press releases, thought leadership articles, letters to editors and broadcast media interviews are a great way to project the CEO.
A good CEO will help you secure untold amounts of media attention, but variety is very much the spice of life and so potential speaking slots at industry events, roundtables, and podcasts should also be on the CEO brand plan.
How do you cultivate CEO brand?
Consistency is key. It’s important to be able to articulate opinions that espouse a company’s virtues but as well as being bold it’s equally important to stick to them and not veer all over the place. It’s equally important to stick to talking about what you know.
Don’t let your CEO talk about Peppa Pig when you’re supposed to be talking business. No one is an expert in absolutely everything and any good CEO will know that. And don’t overdo it – it’s vital that your CEO is constantly relevant and doesn’t end up shouting into a void.
It’s also vital that the CEO sounds natural so putting key messages into his or her mouth is a very delicate operation and so it’s best to develop narrative frameworks that do the heavy lifting for them on the messaging front. Done well, the CEO can bring everything to life and the company’s place in the marketplace make sense.
How do you know is your CEO brand is a winner?
It’s probably an idea to picture a scenario where what could go wrong has gone wrong and if so then the experience of former Ratners CEO Gerald Ratner will spring to mind.
It might be an extreme example but his calamitous speech for the Institute of Directors at London’s Royal Albert Hall. It was 30 years ago and it was recently billed in the Daily Mirror newspaper as one of the famous corporate gaffes’ after he jokingly described one of his products as “total crap”. His rivals would have laughed loudest as the value of the company plummeted by £500 million in days, Ratners became Signet Group and he lost his job and the trappings of huge wealth.
There’s nothing like the court of public opinion when it comes to evaluating CEO brand.
There will be trust signals such as positive online and social media mentions, boosting online mentions, sales team talking to potential leads, positive mentions and, last but not least there will be a boost to the bottom line. They will prove that while image isn’t everything, CEO brand management is certainly very important.
The residents spent over $300,000 in lawsuits claiming ‘crime and loitering’ by the occupants would lead to ‘irreparable injuries’
Just a few steps away from the horse-drawn carriages that whisk tourists through New York’s Central Park and the opulence of the Plaza Hotel is an unassuming building on a quiet block in midtown Manhattan.
The building is marked by an awning that reads “Park Savoy Hotel”. Nestled in between a 24-hour parking structure and an apartment building on a predominantly residential street, the Park Savoy blends in with the other hotels in the neighborhood.
A Paris judge approved a 10 million euro ($11.27 million) settlement with LVMH on Friday that closes a criminal probe into the luxury group’s role in a spying case involving the former top boss of France’s security services.
Sen. Elizabeth Warren, a Democrat of Massachusetts, is an anticorruption advocate.
Patrick Semansky-Pool/Getty Images
The STOCK Act is designed to ensure lawmakers are financially transparent and accountable.
Some use qualified blind trusts or exchange-traded funds or abstain from playing the market.
Congress has considered, but not implemented, stricter stock-trading rules for its members.
Though several investment scandals have rocked the US Capitol, few lawmakers aggressively seek to ward off any specter of insider trading by handing their finances over to impartial money managers.
Only 10 sitting members of Congress — nine Democrats and one Republican — have reported using what's known as a qualified blind trust, a formal arrangement, requiring congressional approval, in which a lawmaker officially transfers management of their financial assets to an independent trustee.
While congressional guidance suggests the trusts provide the "most comprehensive approach" to avoiding "potential conflicts of interest or the appearance of such conflicts," they can be expensive and time-consuming to establish.
As part of the exhaustive Conflicted Congress project, in which Insider reviewed nearly 9,000 financial-disclosure reports for every sitting lawmaker and their top-ranking staffers, Insider identified only six senators and four House members with qualified blind trusts.
The senators were Democratic Sens. Dianne Feinstein of California, Joe Manchin of West Virginia, Tammy Baldwin of Wisconsin, Mark Kelly of Arizona, and Jon Ossoff of Georgia, and Republican Sen. John Hoeven of North Dakota.
The House members were Democratic Reps. Dean Phillips of Minnesota, Carolyn Maloney of New York, Eddie Bernice Johnson of Texas, and Tom Malinowski of New Jersey.
The Justice Department and Securities and Exchange Commission has investigated pandemic-related moves by Republican Sen. Richard Burr of North Carolina
Susan Walsh-Pool/Getty Images
Suspicious stock trading is rampant
During the past decade, suspicious stock-trading activity has plagued members on both sides of the aisle.
The Justice Department and Securities and Exchange Commission has investigated pandemic-related moves by Republican Sen. Richard Burr of North Carolina. Investigators also inquired about the trading activities of Feinstein, Republican Sen. James Inhofe of Oklahoma, and former Republican Sen. Kelly Loeffler of Georgia. And the Office of Congressional Ethics has investigated trades made by the wife of Republican Rep. Mike Kelly of Pennsylvania, as well as allegations of financial-crisis profiteering by former Republican Rep. Spencer Bachus of Alabama.
The Bachus scandal bolstered the enactment of the Stop Trading on Congressional Knowledge Act, a 2012 law designed to hammer home that it is illegal for members of Congress and their top aides to engage in insider trading.
Just over half of members of Congress (55%) did not report owning or trading individual stocks in their 2020 annual disclosures. Some opted for broad-based investments such as mutual funds, or conservative holdings such as government bonds. A few even said they kept their cash in old-fashioned savings accounts.
Senate Democratic Whip Dick Durbin of Illinois, House Minority Leader Kevin McCarthy of California, and House GOP Whip Steve Scalise of Louisiana were among the 277 lawmakers who reported no individual stock investments, indicating they avoid directly buying and selling shares of companies that often spend millions of dollars lobbying the federal government and vying for government business.
But Kedric Payne, a former congressional investigator intimately familiar with Capitol Hill culture, said the STOCK Act's legacy wasn't looking too good.
"I can't remember any other ethics rule that has been violated by so many members so consistently," Payne, a former deputy chief counsel at the Office of Congressional Ethics who's now a director of ethics at the nonpartisan Campaign Legal Center, told Insider. He added that disclosure without meaningful enforcement wouldn't change anything.
"You can't X-ray a patient back to health," Payne said.
Hands off
Insider in March reported that Malinowski had violated the STOCK Act by failing to disclose dozens of stock trades together worth at least $671,000. Malinowski remains under investigation by the House Committee on Ethics after the independent Office of Congressional Ethics said it found "substantial reason to believe" that he had violated federal rules or laws designed to promote transparency and defend against conflicts of interest.
That flurry of stock trades predates Malinowski's blind trust, which he began establishing in March and which congressional administrators signed off on in July.
"He supports making a blind trust mandatory for all members of Congress who have investments in the stock market and has cosponsored legislation to that effect," a Malinowski spokeswoman, Naree Ketudat, told Insider, citing his support for the bipartisan, bicameral Ban Conflicted Trading Act, which has languished since its introduction in March.
Qualified blind trusts aren't necessarily a panacea for lawmakers wanting to avoid conflicts or legal transgressions.
While Manchin established a blind trust in 2012, it doesn't include all his assets. Notably, Manchin doesn't include his earnings from his family's coal company, which could be significantly affected by President Joe Biden's clean-energy proposals, The Washington Post reported this week.
Likewise, Feinstein's blind trust doesn't include all her reportable assets. Earlier this year, she acknowledged being months late to disclose one of her husband's stock purchases that was worth up to $50,000.
Democratic Sen. Sherrod Brown of Ohio, an author of the Ban Conflicted Trading Act who doesn't have a qualified blind trust but exclusively invests in broad-based exchange-traded funds, sees room for improvement among his colleagues, his communications director, Trudy Perkins, told Insider.
"Senator Brown deeply believes that public servants should focus on serving the American people, not lining their own pockets," Perkins said.
Some Capitol Hill newcomers couldn't agree more.
"Eliminating conflicts of interest is an important step to make Washington work better," Mark Kelly told Insider, adding that he'd engaged in the "rigorous, multi-step process" of setting up his Ethics Committee-approved blind trust earlier this year. He'd previously violated the STOCK Act by failing to submit a timely disclosure of his exercising of a stock option on an investment in a company developing supersonic passenger aircraft.
Kelly also said he's developing legislation with Ossoff that would require all senators to adopt qualified blind trusts.
"A hard-and-fast rule is not reflective of where we are," Meijer, who said he had no control of or input over his financial trust, told Insider. He added that many members have spouses who might invest as part of a job or receive shares as part of employment compensation.
Meijer said that "as a general rule" lawmakers shouldn't actively trade individual stocks, and he encouraged colleagues to avoid giving financial advisors instructions beyond desired growth goals and acceptable risk tolerance.
Sen. Bernie Sanders, a Vermont Independent, does not own individual stocks.
Anna Moneymaker/Getty Images
'It's just wrong'
Sen. Bernie Sanders told Insider that he decided long ago against owning individual stocks.
"Obviously, you don't want conflicts of interest here," the Vermont independent said while walking through the tunnels beneath Capitol Hill.
There was one exception: Sanders recounted spending about $500 on IBM stock while he was serving in the House of Representatives so he could rail against proposed changes to the company's retirement program during a shareholders' meeting.
Democratic Sen. Elizabeth Warren of Massachusetts turned Insider's Conflicted Congress findings into a call to action, blasting colleagues "who think it's OK to be in a position of trust to represent the people of this country and at the same time to be working to advance your own financial interests."
"It's just wrong," Warren, a two-term lawmaker and anticorruption advocate, told Insider.
Warren's comments stood in stark contrast to those of House Speaker Nancy Pelosi, who in response to Insider's questions defended congressional lawmakers' right to buy and sell individual stocks.
"We are a free-market economy," Pelosi said on Wednesday. "They should be able to participate in that."
Democratic Rep. Andy Kim of New Jersey urged leadership to clamp down on congressional stock trading, not embrace it.
"Americans are losing trust in government and we need to show we serve the people, not our personal/political self-interest," the two-term lawmaker tweeted after a video of Pelosi's remarks went viral. Kim added that lawmakers, presidents, and senior administration officials should be barred from trading individual stocks.
Cracking down appeals to Payne of the Campaign Legal Center. He said that while his group was not limiting its own efforts, it endorsed ethics tweaks in the Ban Conflicted Trading Act, as well as those woven throughout the more comprehensive Anti-Corruption and Public Integrity Act previously introduced by Warren and Rep. Pramila Jayapal of Washington.
Otherwise, Payne said, the status quo will produce more scofflaws.
"If members of Congress who are currently doing the right thing continue to see other members violate the law with impunity," he said, "you're going to have more noncompliance."
The Tribune Tower rises above the streets of downtown Chicago in a majestic snarl of Gothic spires and flying buttresses that were designed to exude power and prestige. When plans for the building were announced in 1922, Colonel Robert R. McCormick, the longtime owner of the Chicago Tribune, said he wanted to erect “the world’s most beautiful office building” for his beloved newspaper. The best architects of the era were invited to submit designs; lofty quotes about the Fourth Estate were selected to adorn the lobby. Prior to the building’s completion, McCormick directed his foreign correspondents to collect “fragments” of various historical sites—a brick from the Great Wall of China, an emblem from St. Peter’s Basilica—and send them back to be embedded in the tower’s facade. The final product, completed in 1925, was an architectural spectacle unlike anything the city had seen before—“romance in stone and steel,” as one writer described it. A century later, the Tribune Tower has retained its grandeur. It has not, however, retained the Chicago Tribune.
To find the paper’s current headquarters one afternoon in late June, I took a cab across town to an industrial block west of the river. After a long walk down a windowless hallway lined with cinder-block walls, I got in an elevator, which deposited me near a modest bank of desks near the printing press. The scene was somehow even grimmer than I’d imagined. Here was one of America’s most storied newspapers—a publication that had endorsed Abraham Lincoln and scooped the Treaty of Versailles, that had toppled political bosses and tangled with crooked mayors and collected dozens of Pulitzer Prizes—reduced to a newsroom the size of a Chipotle.
Spend some time around the shell-shocked journalists at the Tribune these days, and you’ll hear the same question over and over: How did it come to this? On the surface, the answer might seem obvious. Craigslist killed the Classified section, Google and Facebook swallowed up the ad market, and a procession of hapless newspaper owners failed to adapt to the digital-media age, making obsolescence inevitable. This is the story we’ve been telling for decades about the dying local-news industry, and it’s not without truth. But what’s happening in Chicago is different.
In May, the 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. The new owners did not fly to Chicago to address the staff, nor did they bother with paeans to the vital civic role of journalism. Instead, they gutted the place.
Two days after the deal was finalized, 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.
The hollowing-out of the Chicago Tribune was noted in the national press, of course. There were sober op-eds and lamentations on Twitter and expressions of disappointment by professors of journalism. But outside the industry, few seemed to notice. Meanwhile, the Tribune’s remaining staff, which had been spread thin even before Alden came along, struggled to perform the newspaper’s most basic functions. After a powerful Illinois state legislator resigned amid bribery allegations, the paper didn’t have a reporter in Springfield to follow the resulting scandal. And when Chicago suffered a brutal summer crime wave, the paper had no one on the night shift to listen to the police scanner.
As the months passed, things kept getting worse. Morale tanked; reporters burned out. The editor in chief mysteriously resigned, and managers scrambled to deal with the cuts. Some in the city started to wonder if the paper was even worth saving. “It makes me profoundly sad to think about what the Trib was, what it is, and what it’s likely to become,” says David Axelrod, who was a reporter at the paper before becoming an adviser to Barack Obama. Through it all, the owners maintained their ruthless silence—spurning interview requests and declining to articulate their plans for the paper. Longtime Tribune staffers had seen their share of bad corporate overlords, but this felt more calculated, more sinister.
Ricardo Rey
“It’s not as if the Tribune is just withering on the vine despite the best efforts of the gardeners,” Charlie Johnson, a former Metro reporter, told me after the latest round of buyouts this summer. “It’s being snuffed out, quarter after quarter after quarter.” We were sitting in a coffee shop in Logan Square, and he was still struggling to make sense of what had happened. The Tribune had been profitable when Alden took over. The paper had weathered a decade and a half of mismanagement and declining revenues and layoffs, and had finally achieved a kind of stability. Now it might be facing extinction.
“They call Alden a vulture hedge fund, and I think that’s honestly a misnomer,” Johnson said. “A vulture doesn’t hold a wounded animal’s head underwater. This is predatory.”
When Alden first started buying newspapers, at the tail end of the Great Recession, the industry responded with cautious optimism. These were not exactly boom times for newspapers, after all—at least someone wanted to buy them. Maybe this obscure hedge fund had a plan. One early article, in the trade publication Poynter, suggested that Alden’s interest in the local-news business could be seen as “flattering” and quoted the owner of The Denver Post as saying he had “enormous respect” for the firm. Reading these stories now has a certain horror-movie quality: You want to somehow warn the unwitting victims of what’s about to happen.
Of course, it’s easy to romanticize past eras of journalism. The families that used to own the bulk of America’s local newspapers—the Bonfilses of Denver, the Chandlers of Los Angeles—were never perfect stewards. They could be vain, bumbling, even corrupt. At their worst, they used their papers to maintain oppressive social hierarchies. But most of them also had a stake in the communities their papers served, which meant that, if nothing else, their egos were wrapped up in putting out a respectable product.
The 21st century has seen many of these generational owners flee the industry, to devastating effect. In the past 15 years, more than a quarter of American newspapers have gone out of business. Those that have survived are smaller, weaker, and more vulnerable to acquisition. Today, half of all daily newspapers in the U.S. are controlled by financial firms, according to an analysis by the Financial Times, and the number is almost certain to grow.
What threatens local newspapers now is not just digital disruption or abstract market forces. They’re being targeted by investors who have figured out how to get rich by strip-mining local-news outfits. The model is simple: Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self.
The men who devised this model are Randall Smith and Heath Freeman, the co-founders of Alden Global Capital. Since they bought their first newspapers a decade ago, no one has been more mercenary or less interested in pretending to care about their publications’ long-term health. Researchers at the University of North Carolina found that Alden-owned newspapers have cut their staff at twice the rate of their competitors; not coincidentally, circulation has fallen faster too, according to Ken Doctor, a news-industry analyst who reviewed data from some of the papers. That might sound like a losing formula, but these papers don’t have to become sustainable businesses for Smith and Freeman to make money.
With aggressive cost-cutting, Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers it’s alienating. “It’s the meanness and the elegance of the capitalist marketplace brought to newspapers,” Doctor told me. So far, Alden has limited its closures primarily to weekly newspapers, but Doctor argues it’s only a matter of time before the firm starts shutting down its dailies as well.
This investment strategy does not come without social consequences. When a local newspaper vanishes, research shows, it tends to correspond with lower voter turnout, increased polarization, and a general erosion of civic engagement. Misinformation proliferates. City budgets balloon, along with corruption and dysfunction. The consequences can influence national politics as well; an analysis by Politico found that Donald Trump performed best during the 2016 election in places with limited access to local news.
With its acquisition of Tribune Publishing earlier this year, Alden now controls more than 200 newspapers, including some of the country’s most famous and influential: the Chicago Tribune, TheBaltimore Sun, the New York Daily News. It is the nation’s second-largest newspaper owner by circulation. Some in the industry say they wouldn’t be surprised if Smith and Freeman end up becoming the biggest newspaper moguls in U.S. history.
They are also defined by an obsessive secrecy. Alden’s website contains no information beyond the firm’s name, and its list of investors is kept strictly confidential. When lawmakers pressed for details last year on who funds Alden, the company replied that “there may be certain legal entities and organizational structures formed outside of the United States.”
Smith, a reclusive Palm Beach septuagenarian, hasn’t granted a press interview since the 1980s. Freeman, his 41-year-old protégé and the president of the firm, would be unrecognizable in most of the newsrooms he owns. For two men who employ thousands of journalists, remarkably little is known about them.
If you want to know what it’s like when Alden Capital buys your local newspaper, you could look to Montgomery County, Pennsylvania, where coverage of local elections in more than a dozen communities falls to a single reporter working out of his attic and emailing questionnaires to candidates. You could look to Oakland, California, where the East Bay Timeslaid off 20 people one week after the paper won a Pulitzer. Or to nearby Monterey, where the former Herald reporter Julie Reynolds says staffers were pushed to stop writing investigative features so they could produce multiple stories a day. Or to Denver, where the Post’s staff was cut by two-thirds, evicted from its newsroom, and relocated to a plant in an area with poor air quality, where some employees developed breathing problems.
But maybe the clearest illustration is in Vallejo, California, a city of about 120,000 people 30 miles north of San Francisco. When John Glidden first joined the Vallejo Times-Herald, in 2014, it had a staff of about a dozen reporters, editors, and photographers. Glidden, then a mild-mannered 30-year-old, had come to journalism later in life than most and was eager to prove himself. He started as a general-assignment reporter, covering local crime and community events. The pay was terrible and the work was not glamorous, but Glidden loved his job. A native of Vallejo, he was proud to work for his hometown paper. It felt important.
A month after he started, one of his fellow reporters left and Glidden was asked to start covering schools in addition to his other responsibilities. When the city-hall reporter left a few months later, he picked up that beat too. Glidden had heard rumblings about the paper’s owners when he first took the job, but he hadn’t paid much attention. Now he was feeling the effects of their management.
It turned out that those owners—New York hedge funders whom Glidden took to calling “the lizard people”—were laser-focused on increasing the paper’s profit margins. Year after year, the executives from Alden would order new budget cuts, and Glidden would end up with fewer co-workers and more work. Eventually he was the only news reporter left on staff, charged with covering the city’s police, schools, government, courts, hospitals, and businesses. “It played with my mind a little bit,” Glidden told me. “I felt like a terrible reporter because I couldn’t get to everything.”
He gained 100 pounds and started grinding his teeth at night. He used his own money to pull court records, and went years without going on a vacation. Tips that he would never have time to investigate piled up on a legal pad he kept at his desk. At one point, he told me, the city’s entire civil-service commission was abruptly fired without explanation; his sources told him something fishy was going on, but he knew he’d never be able to run down the story.
Meanwhile, with few newsroom jobs left to eliminate, Alden continued to find creative ways to cut costs. The paper’s printing was moved to a plant more than 100 miles outside town, Glidden told me, which meant that the news arriving on subscribers’ doorsteps each morning was often more than 24 hours old. The “newsroom” was moved to a single room rented from the local chamber of commerce. Layout design was outsourced to freelancers in the Philippines.
Frustrated and worn out, Glidden broke down one day last spring when a reporter from TheWashington Post called. She was writing about Alden’s growing newspaper empire, and wanted to know what it was like to be the last news reporter in town. “It hurts to see the paper like this,” he told her. “Vallejo deserves better.” A few weeks after the story came out, he was fired. His editor cited a supposed journalistic infraction (Glidden had reported the resignation of a school superintendent before an agreed-upon embargo). But Glidden felt sure he knew the real reason: Alden wanted him gone.
Ricardo Rey
The story of Alden Capital begins on the set of a 1960s TV game show called Dream House. A young man named Randall Duncan Smith—Randy for short—stands next to his wife, Kathryn, answering quick-fire trivia questions in front of a live studio audience. The show’s premise pits two couples against each other for the chance to win a home. When the Smiths win, they pass on the house and take the cash prize instead—a $20,000 haul that Randy will eventually use to seed a small trading firm he calls R.D. Smith & Company.
A Cornell grad with an M.B.A., Randy is on a partner track at Bear Stearns, where he’s poised to make a comfortable fortune simply by climbing the ladder. But he has a big idea: He believes there’s serious money to be made in buying troubled companies, steering them into bankruptcy, and then selling them off in parts. The term vulture capitalism hasn’t been invented yet, but Randy will come to be known as a pioneer in the field. He scores big with a bankrupt aerospace manufacturer, and again with a Dallas-based drilling company.
By the 1980s, this strategy has made Randy luxuriously wealthy—vacations in the French Riviera, a family compound outside New York City—and he has begun to school his children on the wonders of capitalism. He teaches his 8-year-old son, Caleb, to make trades on a Quotron computer, and imparts the value of delayed gratification by reportedly postponing his family’s Christmas so that he can use all their available cash to buy stocks at lower prices in December. Caleb will later recall, in an interview with D Magazine, asking his dad why he works so hard.
“It’s a game,” Randy explains to his son.
“How do you know who wins?” the boy asks.
“Whoever dies with the most money.”
Even in the “greed is good” climate of the era, Randy is a polarizing character on Wall Street. When TheNew York Times profiles him in 1991, it notes that he excels at “profiting from other people’s misery” and quotes a parade of disgruntled clients and partners. “The one central theme,” the Times reports, “seems to be that Smith and its web of affiliates are out, first and foremost, for themselves.” If this reputation bothers Randy and his colleagues, they don’t let on: For a while, according to The Village Voice, his firm proudly hangs a painting of a vulture in its lobby.
Around this time, Randy becomes preoccupied with privacy. He stops talking to the press, refuses to be photographed, and rarely appears in public. One acquaintance tells TheVillage Voice that “he’s the kind of guy who divests himself every couple of years” to avoid ending up on lists of the world’s richest people.
Most of his investments are defined by a cold pragmatism, but he takes a more personal interest in the media sector. With his own money, he helps his brother launch the New York Press, a free alt-weekly in Manhattan. Russ Smith is a puckish libertarian whose self-described “contempt” for the journalistic class animates the pages of the publication. “I’m repulsed by the incestuous world of New York journalism,” he tells New York magazine. He writes a weekly column called “Mugger” that savages the city’s journalists by name and frequently runs to 10,000 words.
Randy claims no editorial role in the Press, and his investment in the project—which has little chance of producing the kind of return he’s accustomed to—could be chalked up to brotherly loyalty. But years later, when Randy relocates to Palm Beach and becomes a major donor to Donald Trump’s presidential campaign, it will make a certain amount of sense that his earliest known media investment was conceived as a giant middle finger to the journalistic establishment.
How exactly Randall Smith chose Heath Freeman as his protégé is a matter of speculation among those who have worked for the two of them. In conversations with former Alden employees, I heard repeatedly that their partnership seemed to transcend business. “They had a father-figure relationship,” one told me. “They were very tight.” Freeman has resisted elaborating on his relationship with Smith, saying simply that they were family friends before going into business together.
Freeman’s father, Brian, was a successful investment banker who specialized in making deals on behalf of labor unions. After serving in the Carter administration’s Treasury Department, Brian became widely known—and feared—in the ’80s for his hard-line negotiating style. “I sort of bully people around to get stuff done,” he boasted to TheWashington Post in 1985. The details of how Smith got to know him are opaque, but the resulting loyalty was evident.
After Brian took his own life, in 2001, Smith became a mentor and confidant to Heath, who was in college at the time of his father’s death. Several years later, when Heath was still in his mid-20s, Smith co-founded Alden Global Capital with him, and eventually put him in charge of the firm.
People who know him described Freeman—with his shellacked curls, perma-stubble, and omnipresent smirk—as the archetypal Wall Street frat boy. “If you went into a lab to create the perfect bro, Heath would be that creation,” says one former executive at an Alden-owned company, who, like others in this story, requested anonymity to speak candidly. Freeman would show up at business meetings straight from the gym, clad in athleisure, the executive recalled, and would find excuses to invoke his college-football heroics, saying things like “When I played football at Duke, I learned some lessons about leadership.” (Freeman was a walk-on placekicker on a team that won no games the year he played.)
When Alden first got into the news business, Freeman seemed willing to indulge some innovation. The firm oversaw the promotion of John Paton, a charismatic digital-media evangelist, who improved the papers’ web and mobile offerings and increased online ad revenue. In 2011, Paton launched an ambitious initiative he called “Project Thunderdome,” hiring more than 50 journalists in New York and strategically deploying them to supplement short-staffed local newsrooms. For a fleeting moment, Alden’s newspapers became unexpected darlings of the journalism industry—written about by Poynter and Nieman Lab, endorsed by academics like Jay Rosen and Jeff Jarvis. But by 2014, it was becoming clear to Alden’s executives that Paton’s approach would be difficult to monetize in the short term, according to people familiar with the firm’s thinking. Reinventing their papers could require years of false starts and fine-tuning—and, most important, a delayed payday for Alden’s investors.
So Freeman pivoted. He shut down Project Thunderdome, parted ways with Paton, and placed all of Alden’s newspapers on the auction block. When the sale failed to attract a sufficiently high offer, Freeman turned his attention to squeezing as much cash out of the newspapers as possible.
Alden’s calculus was simple. Even in a declining industry, the newspapers still generated hundreds of millions of dollars in annual revenues; many of them were turning profits. For Freeman and his investors to come out ahead, they didn’t need to worry about the long-term health of the assets—they just needed to maximize profits as quickly as possible.
From 2015 to 2017, he presided over staff reductions of 36 percent across Alden’s newspapers, according to an analysis by the NewsGuild (a union that also represents employees of The Atlantic). At the same time, he increased subscription prices in many markets; it would take awhile for subscribers—many of them older loyalists who didn’t carefully track their bills—to notice that they were paying more for a worse product. Maybe they’d cancel their subscriptions eventually; maybe the papers would fold altogether. But as long as Alden had made back its money, the investment would be a success. (Freeman denied this characterization through a spokesperson.)
Crucially, the profits generated by Alden’s newspapers did not go toward rebuilding newsrooms. Instead, the money was used to finance the hedge fund’s other ventures. In legal filings, Alden has acknowledged diverting hundreds of millions of dollars from its newspapers into risky bets on commercial real estate, a bankrupt pharmacy chain, and Greek debt bonds. To industry observers, Alden’s brazen model set it apart even from chains like Gannett, known for its aggressive cost-cutting. Alden “is not a newspaper company,” says Ann Marie Lipinski, a former editor in chief of the Chicago Tribune. “It’s a hedge that went and bought up some titles that it milks for cash.”
Even as Alden’s portfolio grew, Freeman rarely visited his newspapers. When he did, he exhibited a casual contempt for the journalists who worked there. On more than one occasion, according to people I spoke with, he asked aloud, “What do all these people do?” According to the former executive, Freeman once suggested in a meeting that Alden’s newspapers could get rid of all their full-time reporters and rely entirely on freelancers. (Freeman denied this through a spokesperson.) In my many conversations with people who have worked with Freeman, not one could recall seeing him read a newspaper.
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?”
In budget meetings, according to the former executive, Freeman hectored local publishers, demanding that they produce detailed numbers off the top of their head and then humiliating them when they couldn’t. But for all the theatrics, his marching orders were always the same: Cut more.
“It was clear that they didn’t care about this being a business in the future. It was all about the next quarter’s profit margins,” says Matt DeRienzo, who worked as a publisher for Alden’s Connecticut newspapers before finally resigning.
Another ex-publisher told me Freeman believed that local newspapers should be treated like any other commodity in an extractive business. “To him, it’s the same as oil,” the publisher said. “Heath hopes the well never runs dry, but he’s going to keep pumping until it does. And everyone knows it’s going to run dry.”
On March 9, 2020, a small group of Baltimore Sun reporters convened a secret meeting at the downtown Hyatt Regency. Alden Global Capital had recently purchased a nearly one-third stake in the Sun’s parent company, Tribune Publishing, and the firm was signaling that it would soon come for the rest. By that point, Alden was widely known as the “grim reaper of American newspapers,” as Vanity Fair had put it, and news of the acquisition plans had unleashed a wave of panic across the industry.
But there was still a sliver of hope: Tribune and Alden agreed that the hedge fund would not increase its stake in the company for at least seven months. That gave the journalists at the Sun a brief window to stop the sale from going through. The question was how.
In the Hyatt meeting, Ted Venetoulis, a former Baltimore politician, advised the reporters to pick a noisy public fight: Set up a war room, circulate petitions, hold events to rally the city against Alden. If they did it right, Venetoulis said, they just might be able to line up a local, civic-minded owner for the paper. The pitch had a certain romantic appeal to the reporters in the room. “Baltimore is an underdog town,” Liz Bowie, a Sun reporter who was at the meeting, told me. “We were like, They’re not going to take our newspaper from us! ”
The paper’s union hired a PR firm to launch a public-awareness campaign under the banner “Save Our Sun” and published a letter calling on the Tribune board to sell the paper to local owners. Soon, Tribune-owned newsrooms across the country were kicking off similar campaigns. “We were in collective revolt,” Lillian Reed, a Sun reporter who helped organize the campaign, told me. When the journalists created a Slack channel to coordinate their efforts across multiple newspapers, they dubbed it “Project Mayhem.”
In Orlando, the Sentinel ran an editorial pleading with the community to “deliver us from Alden” and comparing the hedge fund to “a biblical plague of locusts.” In Allentown, Pennsylvania, reporters held reader forums where they tried to instill a sense of urgency about the threat Alden posed to TheMorning Call. The movement gained traction in some markets, with local politicians and celebrities expressing solidarity. But even for a group of journalists, it was tough to keep the public’s attention. After a contentious presidential race and amid a still-raging pandemic, there was a limited supply of outrage and sympathy to spare for local reporters. When the Chicago Tribune held a “Save Local News” rally, most of the people who showed up were members of the media.
Meanwhile, reporters fanned out across their respective cities in search of benevolent rich people to buy their newspapers. The most promising prospect materialized in Baltimore, where a hotel magnate named Stewart Bainum Jr. expressed interest in the Sun. Earnest and unpolished, with a perpetually mussed mop of hair, Bainum presented himself as a contrast to the cutthroat capitalists at Alden. As a young man, he’d studied at divinity school before taking over his father’s company, and decades later he still carried a healthy sense of noblesse oblige. He took particular pride in finding novel ways to give away his family fortune, funding child-poverty initiatives in Baltimore and prenatal care for women in Liberia.
Bainum told me he’d come to appreciate local journalism in the 1970s while serving in the Maryland state legislature. At the time, the Sun had a bustling bureau in Annapolis, and he marveled at the reporters’ ability to sort the honest politicians from the “political whores” by exposing abuses of power. “You have no way of knowing that if you don’t have some nosy son of a bitch asking a lot of questions down there,” he told me.
Bainum envisioned rebuilding the paper—which, by 2020, was down to a single full-time statehouse reporter—as a nonprofit. In February 2021, he announced a handshake deal to buy the Sun from Alden for $65 million once it acquired Tribune Publishing.
But within weeks, Bainum said, Alden tried to tack on a five-year licensing deal that would have cost him tens of millions more. (Freeman has, in the past, disputed Bainum’s account of the negotiations.) Feeling burned by the hedge fund, Bainum decided to make a last-minute bid for all of Tribune Publishing’s newspapers, pledging to line up responsible buyers in each market. For those who cared about the future of local news, it was hard to imagine a better outcome—which made it all the more devastating when the bid fell through.
What exactly went wrong would become a point of bitter debate among the journalists involved in the campaigns. Some expressed exasperation with the staff of the Chicago Tribune, who were unable to find a single interested local buyer. Others pointed to Bainum’s financing partner, who pulled out of the deal at the 11th hour. The largest share of the blame was assigned to the Tribune board for allowing the sale to Alden to go through. Freeman, meanwhile, would later gloat to colleagues that Bainum was never serious about buying the newspapers and just wanted to bask in the worshipful media coverage his bid generated.
But beneath all the recriminations and infighting was a cruel reality: When faced with the likely decimation of the country’s largest local newspapers, most Americans didn’t seem to care very much. “It was like watching a slow-motion disaster,” says Gregory Pratt, a reporter at the Chicago Tribune.
Alden completed its takeover of the Tribune papers in May. It financed the deal with the help of Cerberus—a private-equity firm that owned, among other businesses, the security company that trained Saudi operatives who participated in the murder of the journalist Jamal Khashoggi.
Three days later, Bainum—still smarting from his experience with Alden, but worried about the Sun’s fate—sent a pride-swallowing email to Freeman. After congratulating him on closing the deal, Bainum said he was still interested in buying the Sun if Alden was willing to negotiate. Freeman never responded.
Ricardo Rey
Shortly after the Tribune deal closed earlier this year, I began trying to interview the men behind Alden Capital. I knew they almost never talked to reporters, but Randall Smith and Heath Freeman were now two of the most powerful figures in the news industry, and they’d gotten there by dismantling local journalism. It seemed reasonable to ask that they answer a few questions.
My request for an interview with Smith was dismissed by his spokesperson before I finished asking. A reporter at one of his newspapers suggested I try “doorstepping” Smith—showing up at his home unannounced to ask questions from the porch. But it turned out that Smith had so many doorsteps—16 mansions in Palm Beach alone, as of a few years ago, some of them behind gates—that the plan proved impractical. At one point, I tracked down the photographer who’d taken the only existing picture of Smith on the internet. But when I emailed his studio looking for information, I was informed curtly that the photo was “no longer available.” Had Smith bought the rights himself? I asked. No response came back.
Freeman was only slightly more accessible. He declined to meet me in person or to appear on Zoom. After weeks of back-and-forth, he agreed to a phone call, but only if parts of the conversation could be on background (which is to say, I could use the information generally but not attribute it to him). On the appointed afternoon, I dialed the number provided by his spokesperson and found myself talking to the most feared man in American newspapers.
When I asked Freeman what he thought was broken about the newspaper industry, he launched into a monologue that was laden with jargon and light on insight—summarizing what has been the conventional wisdom for a decade as though it were Alden’s discovery. “Many of the operators were looking at the newspaper business as a local advertising business,” he said, “and we didn’t believe that was the right way to look at it. This is a subscription-based business.”
Freeman was more animated when he turned to the prospect of extracting money from Big Tech. “We must finally require the online tech behemoths, such as Google, Apple, and Facebook, to fairly compensate us for our original news content,” he told me. He had spoken on this issue before, and it was easy to see why. Many in the journalism industry, watching lawsuits play out in Australia and Europe, have held out hope in recent years that Google and Facebook will be compelled to share their advertising revenue with the local outlets whose content populates their platforms. Some have even suggested that this represents America’s last chance to save its local-news industry. But for that to happen, the Big Tech money would need to flow to underfunded newsrooms, not into the pockets of Alden’s investors.
Before our interview, I’d contacted a number of Alden’s reporters to find out what they would ask their boss if they ever had the chance. Most responded with variations on the same question: Which recent stories from your newspapers have you especially appreciated? I put the question to Freeman, but he declined to answer on the record.
Freeman was clearly aware of his reputation for ruthlessness, but he seemed to regard Alden’s commitment to cost-cutting as a badge of honor—the thing that distinguished him from the saps and cowards who made up America’s previous generation of newspaper owners. “Prior to the acquisition of the Tribune Company, we purchased substantially all of our newspapers out of bankruptcy or close to liquidation,” he told me. “These papers were in many cases left for dead by local families not willing to make the tough but appropriate decisions to get these news organizations to sustainability. These papers would have been liquidated if not for us stepping up.”
This was the core of Freeman’s argument. But while it’s true that Alden entered the industry by purchasing floundering newspapers, not all of them were necessarily doomed to liquidation. More to the point, Tribune Publishing—which represents a substantial portion of Alden’s titles—was profitable at the time of the acquisition.
There’s little evidence that Alden cares about the “sustainability” of its newspapers. A more honest argument might have claimed, as some economists have, that vulture funds like Alden play a useful role in “creative destruction,” dismantling outmoded businesses to make room for more innovative insurgents. But in the case of local news, nothing comparable is ready to replace these papers when they die. Some publications, such as the Minneapolis Star Tribune, have developed successful long-term models that Alden’s papers might try to follow. But that would require slow, painstaking work—and there are easier ways to make money.
In truth, Freeman didn’t seem particularly interested in defending Alden’s reputation. When he’d agreed to the interview, I’d expected him to say the things he was supposed to say—that the layoffs and buyouts were necessary but tragic; that he held local journalism in the highest esteem; that he felt a sacred responsibility to steer these newspapers toward a robust future. I would know he didn’t mean it, and he would know he didn’t mean it, but he would at least go through the motions.
But I had underestimated how little Alden’s founders care about their standing in the journalism world. For Freeman, newspapers are financial assets and nothing more—numbers to be rearranged on spreadsheets until they produce the maximum returns for investors. For Smith, the Palm Beach conservative and Trump ally, sticking it to the mainstream media might actually be a perk of Alden’s strategy. Neither man will ever be the guest of honor at the annual dinner for the Committee to Protect Journalists—and that’s probably fine by them. It’s hard to imagine they’d show, anyway.
About a month after TheBaltimore Sun was acquired by Alden, a senior editor at the paper took questions from anxious reporters on Zoom. The new owners had announced a round of buyouts, some beloved staffers were leaving, and those who remained were worried about the future. When a reporter asked if their work was still valued, the editor sounded deflated. He said that he still appreciated their journalism, but that he couldn’t speak for his corporate bosses.
“This company that owns us now seems to still be pretty—I don’t even know how to put it,” the editor said, according to a recording of the meeting obtained by The Atlantic. “We don’t hear from them ... They’re, like, nameless, faceless people.”
In the months that followed, the Sun did not immediately experience the same deep staff cuts that other papers did. Reporters kept reporting, and editors kept editing, and the union kept looking for ways to put pressure on Alden. But a sense of fatalism permeated the work. “It feels like we’re going up against capitalism now,” Lillian Reed, the reporter who helped launch the “Save Our Sun” campaign, told me. “Am I going to win against capitalism in America? Probably not.”
To David Simon, the whimpering end of TheBaltimore Sun feels both inevitable and infuriating. A former Sun reporter whose work on the police beat famously led to his creation of The Wire on HBO, Simon told me the paper had suffered for years under a series of blundering corporate owners—and it was only a matter of time before an enterprise as cold-blooded as Alden finally put it out of its misery.
Like many alumni of the Sun, Simon is steeped in the paper’s history. He can cite decades-old scoops and tell you whom they pissed off. He quotes H. L. Mencken, the paper’s crusading 20th-century columnist, on the joys of journalism: It is really the life of kings. At the Sun’s peak, it employed more than 400 journalists, with reporters in London and Tokyo and Jerusalem. Its World War II correspondent brought firsthand news of Nazi concentration camps to American readers; its editorial page had the power to make or break political careers in Maryland.
But for Simon, that paper exists entirely in the past. With Alden in control, he believes the Sun is “now a prisoner” that stands little chance of escape. What most concerns him is how his city will manage without a robust paper keeping tabs on the people in charge. “The practical effect of the death of local journalism is that you get what we’ve had,” he told me, “which is a halcyon time for corruption and mismanagement and basically misrule.”
When Simon called me, he was on the set of his new miniseries, We Own This City, which tells the true story of Baltimore cops who spent years running their own drug ring from inside the police department. By the time the FBI caught them, in 2017, the conspiracy had resulted in one dead civilian and a rash of wrongful arrests and convictions. The show draws from a book written by a Sun reporter, and Simon was quick to point out that the paper still has good journalists covering important stories. But he couldn’t help feeling that the police scandal would have been exposed much sooner if the Sun were operating at full force.
Baltimore has always had its problems, he told me. “But if you really started fucking up in grandiose and belligerent ways, if you started stealing and grifting and lying, eventually somebody would come up behind you and say, ‘You’re grifting and you’re lying’ … and they’d put it in the paper.”
“The bad stuff runs for so long now,” he went on, “that by the time you get to it, institutions are irreparable, or damn near close.”
Take away the newsroom packed with meddling reporters, and a city loses a crucial layer of accountability. What happens next? Unless the Tribune’s trajectory changes, Chicago may soon provide a grim case study. For Baltimore to avoid a similar fate, Simon told me, something new would have to come along—a spiritual heir to the Sun: “A newspaper is its contents and the people who make it. It’s not the name or the flag.”
He may get his wish. Stewart Bainum, since losing his bid for the Sun, has been quietly working on a new venture. Convinced that the Sun won’t be able to provide the kind of coverage the city needs, he has set out to build a new publication of record from the ground up. In recent months, he’s been meeting with leaders of local-news start-ups across the country—The Texas Tribune, the Daily Memphian, The City in New York—and collecting best practices. He’s impressed by their journalism, he told me, but his clearest takeaway is that they’re not nearly well funded enough. To replace a paper like the Sun would require a large, talented staff that covers not just government, but sports and schools and restaurants and art. “You need real capital to move the needle,” he told me. Otherwise, “you’re just peeing in the ocean.”
Next year, Bainum will launch The Baltimore Banner, an all-digital, nonprofit news outlet. He told me it will begin with an annual operating budget of $15 million, unprecedented for an outfit of this kind. It will rely initially on philanthropic donations, but he aims to sell enough subscriptions to make it self-sustaining within five years. He’s acutely aware of the risks—“I may end up with egg on my face,” he said—but he believes it’s worth trying to develop a successful model that could be replicated in other markets. “There’s no industry that I can think of more integral to a working democracy than the local-news business,” he said.
The Banner will launch with about 50 journalists—not far from the size of the Sun—and an ambitious mandate. One tagline he was considering was “Maryland’s Best Newsroom.”
When I asked, half in jest, if he planned to raid the Sun to staff up, he responded with a muted grin. “Well,” he told me, “they have some very good reporters.”
