A hedge fund won approval Friday after a bitter campaign to acquire Tribune Publishing to create the second-largest US newspaper chain, in the latest consolidation in the battered sector.
Tribune shareholders approved the deal to sell the group to Alden Global Capital, the chain's Chicago Tribune reported, rejecting pleas from unions and media watchdogs who have blasted the investment group for its drastic newsroom job cuts at its other media properties.
The transaction assigned a $633 million value to the group, which includes the New York Daily News, Baltimore Sun, Orlando Sentinel, South Florida's Sun-Sentinel, Virginia's Daily Press and Virginian-Pilot, Hartford Courant and The Morning Call in Allentown, Pennsylvania.
Combining the dailies with Alden's other properties will create the second-largest newspaper group behind USA Today owner Gannett, industry analysts say.
The sale comes after a failed alternate bid from Maryland billionaire Stewart Bainum, who wanted to create a nonprofit news operation at the newspaper in Baltimore and possibly others.
Chicago Tribune reporter and NewsGuild representative Gregory Pratt tweeted after the vote: "We are all deeply concerned by Alden Global Capital's purchase of Tribune Publishing. It is a sad, sobering day for journalism, @chicagotribune and the city we love. But we will continue to fight for a better newsroom and each other."
According to the newspaper, Los Angeles Times owner and billionaire Patrick Soon-Shiong, who held a 24 percent stake in Tribune, abstained in the vote.
In an open letter this week, Pratt urged Soon-Shiong, "Please vote no. Alden ownership would be a disaster for Chicago, democracy and society at large."
Pratt cited dramatic cuts in newsroom staff at other Alden newspapers such as the Denver Post and Pottstown Mercury.
The outcome for the Tribune had been seen as a potential turning point for the troubled sector, either toward a model with civic support for expanded local news coverage, or a pure economic-driven model that could lead to deeper newsroom cuts.
Newsroom employment at US newspapers fell by half between 2008 and 2019, according to Pew Research Center, with more cuts reported during the pandemic.
Bainum said in a statement to the Baltimore daily that he was "evaluating various options, all in the pursuit of creating locally supported, not-for-profit newsrooms that place stakeholders above shareholders and journalistic integrity above all."
He added: "While our effort to acquire the Tribune and its local newspapers has fallen short, the journey reaffirmed my belief that a better model for local news is both possible and necessary."