As this NiemanLab story went live on Tuesday, shock filtered around the Pioneer Press newsroom.
Harvard's journalism lab had just revealed that Alden Global Capital, the hedge fund owner whose newspaper titles includes the Pioneer Press, is operating its media outlets at a 17 percent margin.
Of those, St. Paul's venerable newspaper had made a $10 million profit on $66 million expenses in 2017 – a margin of 13 percent.
For reporter Dave Orrick, the news didn't come as a great surprise. He'd figured out through a little digging from within that Alden was making a pretty penny from the newspaper.
But others were learning for the first time that the Pioneer Press' owners were making eight-figure profits off the back of years of layoffs and buyouts that have ravaged the newsroom, affecting dozens of their coworkers and friends.
"When the report came out my email lit up, with people in the newsroom saying 'Wow, can you believe it's that much money?'" Orrick, who is also a rep for the Minnesota Newspaper and Communications Guild, told Bring Me The News.
The focus on the hedge fund and its "harvesting" of legacy media has intensified in recent months. In March, a lawsuit filed by a minority owner in Digital First Media (the parent company of the Pioneer Press) alleged that Alden has been using newspaper cash to fund "speculative ventures."
Meanwhile writers at the Denver Post have been publicly criticizing their owner's modus operandi of selling off newspaper assets and slashing jobs in order to syphon off more profits.
The Post wants a new owner, and so do most at the Pioneer Press.
"I have said for years, and it's not personal, that a hedge fund is a bad match for newspapers," Orrick says. "Their goal is to make money for its investors, our goal is to serve the community with news and advertising, and to make money."
His views are shared by most in the newsroom and other departments in St. Paul.
"I'm not suggesting every single person at the newspaper wants to change, but the frustration is widespread throughout the company," said Orrick, a Capitol Bureau reporter who has been with the newspaper since 2006.
"This is why we have been working so hard to find new owners because we are viable, we are profitable, there's frustration in this newsroom to see those numbers."
Newsroom cuts, and why you should care
The shift of news consumption online has affected newsrooms everywhere, but there are those – the Glen Taylor-owned Star Tribune being an example – that have found a sustainable model that balances print and digital properties in a way that retains a healthy reporting staff.
That's not the case at the Pioneer Press, which at its height employed a newsroom of 260, but thanks in no small part to its ownership is currently languishing at just 50.
Since Alden bought the newspaper in 2012, the newsroom has lost several dozen reporters, putting greater strain on those that remain.
The past year has seen five more go, Orrick says, among them the newspaper's Capitol reporter, Rachel Stassen Berger, who accepted a buyout and is now at the Des Moines Register.
This isn't just a hardship for those still working at a newspaper; it has significant, negative implications for the St. Paul and Minnesota communities it serves.
"It's no longer the case that when one person leaves it's not a big deal," Orrick says. "A single person leaving can now make a huge difference.
"It can mean not being able to make deadlines with the volume of stories we're doing, it can mean we are not attending newsworthy events, including through photographers.
"There's no question that the community is suffering from less news."
This sentiment is shared by Mankato Free Press editor Joe Spear, the president-elect of the Minnesota Society of Professional Journalists.
"Newspaper ownership has for decades been moving from benevolent family ownership to corporate, and now hedge fund ownership," he told BMTN. "The public good newspapers do seem to have become secondary to owners, but thankfully, remains paramount to journalists."
“It’s a battle, and one the public should be concerned about.”
A restrained response to management troubles
The Denver Post has been leading the charge against Alden, with editorial writers penning stringing critiques of its owners even if in some cases it's led to them losing their jobs – with editorial page editor Charles Plunkett the latest to leave on Thursday.
There have been suggestions elsewhere of other Alden-owned newspaper workers receiving directives warning them of potential consequences should they follow the Post's example.
Orrick says he's not aware of any gag orders at the Pioneer Press, even though the newspaper has been noticeably restrained in reporting about its ownership issues.
Decisions taken on this front are above Orrick's pay grade, he says, while suggesting there's a reason why the newspaper has not gone down the same route as the Denver Post.
"Our primary goal is the future of this newspaper, it's not to shame anyone, it's not to scream from a mountain top out of frustration, that is our goal and we are all committed to that goal."
"We will express frustration publicly at times," he continues, with outbursts from reporters seen occasionally on Twitter, but are mostly restrained because "we don't want to be seen, incorrectly, as a bunch of dinosaur disgrunts from some bygone business model, because we are not."
"We are modern, digital journalists running a newsroom that kicks as much butt as we can for a company that's making a profit in a difficult market.
"We want people interested in buying us to realize that."
If not Alden, then who?
Efforts have been ongoing for a while now to find a buyer for the newspaper, though Orrick is tight-lipped about what stage the search is at.
The contrast with the Star Tribune in Minneapolis could not be more stark.
Orrick refers to it as "A Tale of Two Cities, and a Tale of Two Newspapers," and argues that ownership structures are the defining difference between Minnesota's two biggest newspapers.
"You look at them both and you see one major difference, theirs is the kind of owner that fits into the category of benevolent billionaire. We have an owner that's a hedge fund."
Considering the challenges it has faced under Alden, the money the Pioneer Press is making is quite the testament to the efforts of its editorial, advertising and circulation teams.
But finding a new owner is a two-way street however. Not only do they need someone willing to buy, but Alden must also agree to part with a profitable newspaper.
"We hope that Alden will sell," Orrick finishes.
BMTN has attempted to contact Alden Global Capital to comment on this story but is yet to hear back. This story will be updated should we receive a response.