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March 18, 2024

Newsonomics: Vulture Alden Circles Boston

Casual observers tell me it looks to them like Alden, DFM’s owner, is tiring of the business, as it cuts deeply in California and sees seasoned executives like Denver Post publisher Mac Tully and editor Greg Moore leave, fed up.

Au contraire. On Wednesday, DFM more than doubled GateHouse’s offer for the bankrupt Boston Herald, bidding $11.9 million for the property. Sources say the sum surprised GateHouse, which hadn’t even expected DFM to enter the bidding. Second, it believes DFM is overpaying, having far outbid both GateHouse and Revolution Capital Group, the third bidder.

 

First published at Harvard’s Nieman Journalism Lab on Feb. 15, 2018, as part of “Newsonomics: 11 questions the news business is trying to answer in 2018

Follow Newsonomics on Twitter @kdoctor

 

But DFM’s math is different. The company may spend $12 million — a bankruptcy court needs to certify the decision on Friday — but “then again, when they chop half the staff later this year that ought to make some money,” says one source deeply familiar with DFM’s strategies.

Additionally, while DFM has sold several properties in recent years — including the New Haven Register, Salt Lake Tribune, and Berkshire Eagle — it continues to work the market. “DFM has been bidding for everything, from Pueblo to Boston, from Austin to West Palm,” says the insider. “Can DFM suck three years out of everything it can buy? Of course,” he concludes.

Dan Kennedy, deeply knowledgeable on the Northeast news landscape, nails the likely result of the DFM win.

 

 

 

Takeaway: This is vulture capitalism, pure and simple — the textbook practice of buying distressed and dying assets, squeezing them, believing that remaining “meat on the bone” will pay off. The result, often, is bankruptcy and closure. That’s the Alden long-term milking “strategy”: After extracting years of high profits, turn out the lights, or sell the remnants to whoever may want them.

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