The executive and his Merrick Ventures have sold a 25.2% stake in Tribune to Alden Global Capital, making the New York-based hedge fund Tribune’s largest shareholder.
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Along with the nearly $118 million deal for 9.1 million shares, which were priced at $13 apiece, the parties are in talks to add two board seats to the Tribune board. That would give Alden two seats out of eight, commensurate with its 25% stake in the company.
Ferro exited in the spring of 2018 as chairman of the board at Tronc — which was the company’s name for a period of years, in a widely derided effort to convey “Tribune online content” though an ungainly shorthand. Just hours after his “retirement” announcement, a Fortune magazine article detailed allegations of unwanted sexual advances by Ferro. Before his departure, Ferro and Tribune agreed to a $5 million yearly consulting contract that runs through the end of 2020.
Tribune/Tronc’s chaotic ownership of the LA Times, which saw a series of clashes with staffers culminating in a successful unionization drive, ended in 2018 when biotech billionaire Patrick Soon-Shiong bought it. Still in the Tribune fold are the Chicago Tribune, the New York Daily News and a handful of other papers.
Alden Capital controls Digital First Media, which operates about 200 newspapers, including the Denver Post. Like other private equity media owners, it has experienced uneasy relations with employees in many newsrooms after aggressively cutting costs, citing stiff challenges to newspapers’ survival. Gannett, which was the subject of an unrequited hostile takeover bid by Alden, just closed a $1.2 billion deal to merge with GateHouse Media, creating the largest U.S. newspaper chain.
“The Tribune Publishing Board of Directors looks forward to working with Alden to enhance our company’s value as the company continues to provide valuable journalism for our customers and communities,” board chairman David Dreier said in a press release. “Tribune is a leader in each of our eight markets providing quality, locally focused journalism. Our board believes that solid journalism enhances shareholder value and that will continue to be our driving principle.”
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