CHARLES E. SCHUMER

DEMOCRATIC LEADER

NEW YORK

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WASHINGTON, DC 20510

February 21, 2019
Heath Freeman
President
Alden Global Capital LLC
885 Third Avenue, 34th Floor
New York, NY 10022
Dear Mr. Freeman:
I write to request information regarding the efforts of Alden Global
Capital (Alden Global) and MNG Enterprises Inc. (MNG), which does business
as Digital First Media, to acquire the media company Gannett, the nation's largest
chain of daily newspapers that reaches a monthly audience of more than 125
million readers.
Public reports indicate that - over the last several years - Alden Global
has pursued a strategy of acquiring newspapers, cutting staff, and then selling off
the real estate assets of newsrooms and printing presses at a profit. 1 According to
these reports, Alden Global has created commercial real estate holding,
management, and brokerage subsidiaries to spin off office and printing facilities
for sale, lease, or redevelopment. In some instances, it appears that Digital First
Media has engaged in sale-leaseback transactions with these Alden Global
affiliates and then invested the profits into other companies not related to media.
Since Alden Global and MNG took control of Digital First Media,
executives have also eliminated numerous staff positions at its media properties,
resulting in more than 1,000 lostjobs.2 These cuts include layoffs at critical
publications serving communities across the country, such as The Denver Post in
Colorado, The Delaware County Daily Times in Pennsylvania and The San Jose
Mercury Ne,,,vs in California.
As a result, I was troubled to learn that MNG announced an unsolicited
bid to acquire Gannett, which - in addition to USA Today - publishes several
important newspapers serving smaller to mid-size cities in my state of New York:
A hedge fund's 'mercena,y' strategy: Buy newspapers, slash jobs, sell the buildings,
The Washington Post (Feb. 11, 2019) (online at
https://www.washingtonpost.com/business/economy/a-hedge-funds-mercenary-strategy-buy­
newspapers-slash-jobs-sell-the-buildings/2019/02/11/f2c0c78a-l f59-l 1e9-8e2159a09ffl e2al _story.html?utm_tenn=.8b I a8f4cc66c).
1

2

Id.

 the Democrat and Chrq_nicle in Rochester, the Elmira Star-Gazette, The Ithaca
Journal and the Press & Sun-Bulletin in the Southern Tier, and The Journal
News and The Poughkeepsie Journal in the Hudson Valley. While the acquisition
and "streamlining" of Gannett newspapers might increase sho1i-term profits for
Alden Global and MNG, the long-term impact of liquidating these newspapers
would be incalculable to my constituents.
In particular, I am concerned that MNG has been unwilling to publicly
provide relevant details regarding the proposed acquisition.3 MNG has not made
public details regarding any commitments it is willing to make to maintain
newsroom staffing and ensure Gannett's newspapers can continue to create high­
quality local journalism in their communities. It also appears that only vague
statements have been provided regarding the regulatory risk the transaction may
pose related to pension liabilities and antitrust scrutiny.4
Regulatory concerns regarding pension liabilities may be heightened given
past management of pension plans sponsored by MNG and the proposed debt
financing for the acquisition. According to a 2018 shareholder complaint filed in
Delaware state couii, MNG invested nearly $250 million of its pension assets in
hedge funds and managed accounts advised by Alden Global. 5 As you may be
aware, the Employee Retirement Income Security Act prohibits ce1iain
transactions that involve self-dealing or paiiies-in-interest. While exemptions may
allow plans to engage in otherwise prohibited transitions, MNG's decision to
invest its employees' pension assets in Alden Global's own high-risk hedge funds
raises questions regarding its ability to satisfy its cun-ent and future fiduciary
obligations.
Because our democracy depends on continued suppo1i for the First·
Amendment, fuller disclosure regai·ding how the acquisition of Gannett would
impact the viability of a free press is in the public interest. Further, as an elected
legislator representing thousands of constituents potentially impacted, I believe
fuller disclosure on how an acquisition of Gannett would influence employment
and competition in my state is critical. Therefore, to better understand your
continued efforts to acquire Gannett, I ask that you respond in writing to the
following questions by March 5, 2019:
1. If your proposed acquisition is successful, does Alden Global or MNG
intend to sell, lease or redevelop office and printing facilities cun-ently
held by Gannett? If so, will Alden Global or MNG use its own
affiliates or subsidiai·ies to execute these transactions? What

3

Gannett Responds to lvlNG Enterprises, Inc., Gannett Co., Inc. (Feb. 11, 2019) (online
at https ://investors.gannett.com/press-release/gannett-responds-mng-enterprises-inc)
4 Id.
5
Sola Ltd and Ultra Master LTD v. MNG Enterprises Inc., C.A. No.2018-0134-VCS,
(Delaware Court of Chancery Mr.-19, 2018)

 propmiion and dollar value of the proceeds from these transactions
will be invested in companies not related to media?
2. If the proposed acquisition is successful , does Alden Global or MNG
plan to lay off journalists at Gannett newspapers? Will you make
specific commitments to maintain newsroom staffing to ensure
Gannett's newspapers can continue serving their communities?
3. What impact would the acquisition of Gannett have on the pension
plans sponsored by MNG, Gannett, or any of their control group
members? What proportion of pension plans sponsored by MNG are
currently invested in funds or accounts controlled or advised by Alden
Global? How will regulatory issues concerning the proposed
acquisition that may be raised by the Pension Benefit Guaranty
Corporation be addressed?
4. How will potential antitrust issues concerning the proposed acquisition
that may be raised by the Depaiiment of Justice be addressed?
Thank you for your prompt attention to this matter.
Sincerely,

Charles E. Schumer
United States Senator
cc:

R. Joseph Fuchs
Chai1man of Board of Directors
MNG Enterprises, Inc.