Back in 2011, a reclusive Wall Street tycoon began purchasing and then destroying hometown newspapers across America. His henchmen — executives with no experience in the news business — laid off hundreds of journalists and other news workers. They closed or radically downsized such venerable papers as the Oakland Tribune, the San Jose Mercury News, the St. Paul Pioneer Press and The Denver Post. At the Mercury News, the newspaper’s printing press was literally dismantled and carted away, which one staff reporter likened to “watching a heart being ripped out.”
The tycoon is Randall D. Smith, founder and chief of investments at Alden Global Capital, which manages $2 billion worth of assets, including the Digital First Media newspaper chain. He is what is known on Wall Street as a “vulture capitalist.” Or, as the company puts it, Smith invests in “distress.”
“Distress” is an apt word for the current state of America’s newspapers, and Smith isn’t the only financial mogul gobbling them up. On Sept. 4, the New York Daily News was purchased by Tronc, the media conglomerate whose majority shareholder is Michael W. Ferro, the business magnate who founded the investment firm Merrick Ventures.