The state treasurers of three states with Tribune properties- Maryland, Connecticut and Illinois- urge Tribune’s CEO and Chairman to consider Stewart Bainum’s bid for the company. The letter was revealed in a SEC Filing today.
Choice Hotels Chairman Bainum still seeks to acquire Tribune Publishing. Bainum suffered a setback when his Newslight partner billionaire Hansjörg Wyss pulled out of a bid for Tribune Publishing. Wyss had particular interest in owning the flagship Chicago Tribune.
The Letter
Excerpt from the state treasurer letter to CEO Terry Jimenez and Board Chairman Philip Franklin:
We write to urge the Tribune’s shareholders to consider Stewart Bainum’s competing bid of $18.50 per share, higher than the $17.25 per share offered by Alden Global Capital. Our states depend on the timely, reliable information provided by Tribune Publishing newspapers, and we are concerned that the Alden bid would not be in the best interests of Tribute shareholders or the communities it serves.
Nancy K. Kopp, Maryland State Treasurer; Shawn T. Wooden, Connecticut Treasurer, Michael W. Frerichs, Illinois State Treasurer
The three treasurers point out what they have observed. This includes “cutbacks and diminished news coverage” after Alden Global Capital began purchasing news outlets in the late 2000s. Furthermore, they say that pattern repeated at Tribune after Alden purchased a 31.5% stake in 2019. Additionally, they say Alden closed offices, sold off assets and gutted newsrooms.
Tribune and MediaNews Group are not alone in paring staff and resources. Gannett and other competitors are going through the same process.
Their hope is that Bainum intends to run the Maryland newspapers through a non-profit. The other Tribune local properties would then be sold to other “civic-minded investors.”
Tribune’s Special Committee of their Board still recommends the Alden Merger Proposal over the Bainum offer. After Wyss pulled out, the Committee declared that the Bainum proposal would no longer reasonably lead to a “Superior Proposal.”
THE TRIBUNE PUBLISHING-ALDEN GLOBAL CAPITAL SAGA Alden Global Capital Offers to Buy Tribune Publishing - December 31, 2020 Tribune Responds to Alden Acquisition Proposal - January 1, 2021 Connecticut Attorney General Has Questions For Alden - January 29, 2021 Alden Global Capital Will Acquire Tribune Publishing - February 16, 2021 Stewart W. Bainum Jr. Wants to Acquire Tribune - March 16, 2021 Tribune Deems Bainum-Wyss Proposal as Potentially “Superior” - April 5, 2021 Here’s Why Tribune Continues to Recommend Alden Merger Deal - April 16, 2021 Report: Hansjörg Wyss Pulls Out of Bid For Tribune - April 17, 2021 Tribune Deems Bainum Offer No Longer Reasonably Expected to Lead to a “Superior Proposal” - April 19, 2021 Does Anyone Want to Buy The Chicago Tribune? - May 1, 2021
What The State Treasurers Demand
Regardless of the outcome of the sale or merger, the state treasurers compiled a list of demand conditions.
- Newsroom staffing – populating the news beats that keep our communities informed – will remain at pre-sale levels for the next five years.
- Printing and delivery services will not be shut down or moved out of state.
- Disclosure of the funding sources for the acquisition of Tribune Publishing and the U.S.- and non-U.S. based investors in its funds.
- Ensure lease payments are made to local landlords and pursue brick-and-mortar offices for news staff in the coverage areas they serve.
- Executives and board members must welcome inquiries from local investors interested in acquiring papers that are part of Tribune or MediaNews Group roster of titles and pursue in good faith deals that will result in local, civic-minded ownership of Tribune properties.
The treasurer’s letter had an introduction from the The NewsGuild, which represents the Communication Workers of America. President of that organization, Jon Schleuss, urgers Tribune shareholders to “resist the low-ball offer of $17.25/share from Alden Global Capital.”
Community Stakeholders Speak Out
Another SEC filing, dated May 13, was a letter to Tribune Shareholders. It was provided by The NewsGuild and written by community stakeholders. The letter details the important work done by the newspapers. Specific examples were given, such as The Sun’s investigation of the Baltimore Mayor. Furthermore, the writers say, “This destruction of Tribune’s newspapers comes at a cost to the communities they cover.”
Stakeholders include groups like the Chicago Federation of Labor, Catholic Charities, YMCA Allentown, Bradbury-Sullivan LGBT Community Center and the Lehigh Valley Lyme Disease Support Group.
Potential U.S. Newspaper Powerhouse: Alden and Tribune
Alden owns MediaNewsGroup, which operates 200 publications. Titles include the Denver Post, Mercury News, Orange County Register and Boston Herald.
Together, Tribune and Alden would control media properties in half of the top 10 markets in the United States. This includes the three biggest DMAs in the country, New York, Los Angeles and Chicago.
