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Opinion | Joshua Benton

The Boston Herald’s buyer is a vulture capitalist

Digital First Media will be the new owners of the Boston Herald.Globe Staff

Having two significant daily newspapers is a blessing, one granted to very few American cities. New York, Philadelphia, Chicago, Detroit, and a few others remain on that list, but it gets shorter all the time. Two newspapers means more reporters, more editors, more people on watch for things the public should know — and more options for readers.

So the fact that someone thought it was smart to buy the Boston Herald out of bankruptcy for just under $12 million would seem like a moment for celebration. But if you know much about the company doing the bidding, you know that any feelings of relief will be short-lived — and followed by the newspaper equivalent of strip mining.


Digital First Media had the high bid; for those who don’t follow the shufflings of faceless newspaper chains, that’s the nom de pillage of what used to be known as the Journal Register Co. and MediaNews Group. But the corporate entity that really matters is its owner, a secretive hedge fund named Alden Global Capital. Its founder, Randall Smith, appears not to have granted a single press interview in three decades — an unlikely press baron.

Alden is the variety of hedge fund that specializes in “distressed” businesses, particularly those that still throw off free cash even as they decline. That’s a pretty good descriptor of daily newspapers, of which it currently owns more than 80. Alden’s methods fall under the rubric of what some call vulture capitalism: Buy up papers, sell off whatever assets you can (like their offices downtown), and cut costs to the bone. The end game is to be sold off, or just shut down. To be owned by Digital First is to be gutted.

Here’s what the company has done to the papers it currently controls. In the Bay Area, it’s torn what was once a mighty newspaper — the San Jose Mercury News — down to the studs. Back in the 1990s, the paper had a newsroom staff of 440. Despite being the paper of record in booming Silicon Valley, that total is now down to about 40.


In 2016, Digital First won a different bankruptcy auction — this one for the Orange County Register, which had gotten notice a few years earlier by expanding its newsroom, peaking at around 400 staffers. Digital First merged many of its operations with its other southern California newspapers. A recent round of layoffs will leave about 250 journalists — but now shared across 11 newspapers.

The stories are similar at Digital First’s papers across the country — selling off land, laying off journalists, milking revenue streams dry. In Fitchburg, where it owns the Sentinel & Enterprise, it announced earlier this month that it’ll be abandoning its physical offices entirely in favor of a “virtual newsroom.” Local newspapers aren’t a booming business anywhere, but Digital First’s cuts stand out as deeper than just about any other owner in the industry.

The Herald today has about 240 employees. As part of the bankruptcy process, the paper and its union agreed that at least 175 of them would be initially retained by the next owner. But there isn’t anyone in the industry who thinks Digital First won’t follow that first cut with round after additional round. It’s what it’s done everywhere else.


And that’s even assuming that Digital First remains the owner. Alden tried selling off Digital First in 2014, and it’s looking to do so again. As Los Angeles Daily News sports columnist Tom Hoffarth tweeted when he was laid off last month: “If a hedge fund owns a paper that it is trying to sell off to a prospective buyer, employees are collateral damage.”

Ownership matters. A local owner who cares about the quality of news is better than a distant one who does, and both are better than one whose only concern is the bottom line.

The Herald’s sale will still need to be approved Friday, in a bankruptcy court in Delaware. I don’t expect a Delaware judge to care much about the journalistic health of Boston. But just short of setting the place on fire, being bought by Digital First is about the worst outcome possible. It’s less the Herald being saved than the Herald being stripped for parts.

Joshua Benton is director of the Nieman Journalism Lab at Harvard.