Hedge Fund Could Get Another Tribune Publishing Board Seat

Tribune Publishing Co. is in talks to add the co-founder of Alden Global Capital LLC to its board as part of an agreement that would prevent the hedge fund from making a hostile bid to buy the rest of the newspaper company in the near future, according to The Wall Street Journal citing people familiar with the matter.

Randall Smith, who runs Alden alongside Heath Freeman, is in talks to join the board, the people said. The deal would also extend a standstill agreement between Tribune and Alden that expires Tuesday. The length of the extension being discussed wasn’t immediately clear.

Alden is Tribune’s largest owner with a nearly 32% stake. It received two seats on the Chicago Tribune and Baltimore Sun publisher’s six-member board as part of a settlement agreement last year that established the standstill.

If a deal is reached it would buy some breathing room for Tribune, which, along with other local news publishers, has been hit hard by the coronavirus pandemic as advertisers cut back further on spending. Some analysts have estimated the industry’s advertising revenue could drop as much as 50% this year, exacerbating a long period of decline.

Alden is also the owner of MediaNews Group, publisher of more than 60 dailies across the country, including the Denver Post, the San Jose Mercury News and the St. Paul Pioneer Press. The potential merger has sent shudders through much of the industry, where Alden has a reputation for making particularly deep cost cuts at the titles it acquires. Staffers at several Tribune papers have campaigned for the company to sell them to local owners before Alden could take further control

There had been speculation that Alden might make a bid for the entirety of Tribune and its 11 big-market daily newspapers as soon as the standstill expires, with an eye toward merging it with MediaNews Group. But in recent weeks, Alden informed the board that it didn’t intend to move quickly, because of the instability triggered by the pandemic, one of the people said.

Once a heralded newspaper group, Tribune—like many publishers—has suffered through a long, tumultuous decline. Following a lengthy bankruptcy, its newspaper holdings were split off from its television properties in 2014.