A local news writers union is accusing owners of Digital First Media, a news conglomerate which owns newspapers throughout California and beyond, of foul play, including mass layoffs in Pulitzer-winning newsrooms.
Last week, Bay Area news union Pacific Media Workers Guild released a statement blaming a series of mass layoffs at the East Bay Times and the San Jose-based Mercury News on the reckless financial behavior of Alden Global Capital, owner of news conglomerate Digital First Media. Members of the Bay Area News Group newsroom, hailing from both the East Bay Times and the Mercury News, held an event last Thursday outside the Oakland offices of the East Bay Times to publicly denounce the behavior of their corporate owner. The action, spurred by the union of staff writers and freelancers at several Bay Area publications, is the first public protest by a Pulitzer Prize winning team against their employer.
The action comes after the filing of a lawsuit against Alden by a minority shareholder in the hedge fund, alleging that profits were being pulled from Digital First Media in order to enable risky financial behaviors. The suit, filed by Solus Alternative Asset Management, claims that there has been “a fundamental change” to the business of Alden and Digital First Media, involving “investments… that have no relationship to its media business.”
Solus’s complaint documents a timeline of profit redistribution that allegedly directed nearly $250 million of Digital First Media’s newspaper earnings to other ventures. These included investments in a failing drugstore chain, Greek debt, and mortgage-backed securities. “Alden’s goal,” declared a statement from the unionized Bay Area News Group writers, “is to extract maximum profits before shutting down or selling whatever is left of our company in two or three years.”
“At a time when we just went through another round of layoffs and buy-outs,” said Bay Area News Group reporter Thomas Peele, “we’re more concerned as to what Alden’s motivation is and the way that it runs the company.”
The layoffs began in 2017, just weeks after the East Bay Times was awarded a Pulitzer Prize for their coverage of the tragic Ghost Ship Fire in Oakland. The Pacific Media Workers Guild says that this first layoff led to the loss of 20 positions, following a cut of 11 copy-editing positions in 2016.
Newsroom cuts continued into this year, when nearly 30 Bay Area News Group reporters, some of whom had been writing for the impacted publications for over 20 years, were either offered buyouts or laid off outright. Following this latest round of layoffs, the News Guild union claimed that the company-wide layoffs were the result of a profit maximization strategy on the part of the hedge fund which owns the news conglomerate.
“Digital First Media is profitable,” said Peele, “it’s just not been profitable enough for Alden Global Capital.” The group of writers described Alden’s sabotaging of newsrooms at the behest of investment interests as “slash-and-burn policies.” The news writers guild characterized the hedge fund action’s as “attacks on democracy” that have led to the dismantling of newsrooms in the Bay Area beyond.
The news union’s goal moving forward is for new ownership to purchase Digital First Media or its news assets, in order to avoid the profit extraction and layoffs allegedly being employed by Alden Global Capital.
“To have an owner who really cares about journalism and what a newspaper means to a community,” said Harry Harris, a crime reporter at the East Bay Times, “can bring them rewards just as meaningful, if not more so, as profits.” Pacific Media Workers Guild and the Bay Area News Group continue to search for an interested buyer.
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