After Hedge Fund Known For Gutting Local Newspapers And Slashing Jobs Fails To Answer Key Questions About Their Takeover Bid Of Gannett, Schumer Requests Assistance From Federal Regulators At DOJ & PBGC On The Potential Antitrust And Pension Implications Of Such An Acquisition By MNG Enterprises & Alden Global Capital
In New Letters, Senate Democratic Leader Chuck Schumer Seeks Details From The Department Of Justice And Pension Benefit Guaranty Corporation On MNG Enterprises & Alden Global Capital’s – Known As “The Destroyer Of Newspapers” – Unsolicited Bid To Acquire Gannett.
In Response To Previous Letter From Senator Schumer, MNG Provided More Spin Than Substance And Did Not Fully Answer Critical Questions Including Details Related To Newsroom Staffing And Addressing Potential Regulatory Concerns.
Given The Lack Of Disclosure, Schumer Remains Concerned That MNG Still Has Not Publicly Provided Sufficient Details Regarding The Proposed Acquisition And Its Impacts On Employment And Competition In New York.
Washington, D.C. – Senate Democratic Leader Chuck Schumer (D-NY) released a new letter today to MNG Enterprises Chairman R. Joseph Fuchs to inform him that his company’s response to Sen. Schumer’s Feb. 21st, 2019 letter requesting information related to their unsolicited bid to acquire the media company Gannett Co., Inc. – which publishes over 200 newspapers across the country, including many in New York State – was unsatisfactory, and therefore, Sen. Schumer has requested assistance from the Department of Justice and the Pension Benefit Guaranty Corporation to better understand the possible antitrust and pension issues raised by this potential acquisition.
In his new letter to Alden, Sen. Schumer says he is troubled that they refused to fully answer several key questions, including how they would invest proceeds from potential sales of Gannett’s real estate assets, if they would make commitments regarding newsroom jobs and staffing, and how they would address potential regulatory concerns. Given the lack of disclosure from MNG Enterprises & Alden Global Capital, Sen. Schumer’s new letters to the federal regulators request that the DOJ provide details on how it reviews acquisitions that may reduce competition and increase concentration in certain media markets in ways that may raise antitrust concerns, and that the PBGC provide details on how it reviews corporate transactions that may pose an increased risk to pension plans.
MNG Enterprises & Alden Global Capital’s response to Sen. Schumer’s original letter can be found here.
Senator Schumer’s new letter to MNG Enterprises & Alden Global Capital can be found here and below. His letter to DOJ can be found here and his letter to PBGC can be found here.
April 12, 2019
R. Joseph Fuchs
Chairman, Board of Directors
MNG Enterprises, Inc.
101 W. Colfax Avenue
Denver, CO 80202
Dear Mr. Fuchs:
I write with respect to your response to my February 21st letter requesting information on your efforts to acquire Gannett Co., Inc (Gannett).
In my letter, I raised concerns regarding the potential acquisition of Gannett given Alden Global Capital and MNG Enterprises, Inc.’s (MNG) history of acquiring newspapers, cutting staff, and then selling off real estate and other assets to generate a profit. I wrote that fuller disclosure on how the acquisition would impact the viability of free press was in the public interest because our democracy depends on continued support for the First Amendment. I also wrote that seeking fuller disclosure on how the acquisition would influence employment and competition in my state was critical as a legislator representing thousands of constituents who would be impacted.
As a result, I am troubled that your response did not fully answer several outstanding questions that I posed, including how you would invest proceeds from potential sales of Gannett’s real estate assets, if you would make commitments regarding newsroom staffing, and how you would address potential regulatory concerns.
In your response, you declined to provide any specific assurances that the profits from any “rightsizing” would not be diverted to non-journalistic priorities but rather be reinvested in Gannett’s newspapers to continue providing high-quality local news coverage. You also declined to make specific commitments to maintain newsroom staffing or provide specific details regarding how MNG would address potential regulatory concerns, including those related to antitrust and pensions.
Although MNG stated it has reviewed pension and antitrust issues, its underlying analysis of how potential regulatory concerns would be addressed or mitigated has not been made available. Given this lack of fuller disclosure, I remain concerned that MNG still has not publicly provided more details regarding the proposed acquisition. Accordingly, I am writing to the Department of Justice and the Pension Benefit Guarantee Corporation seeking additional information to better understand the regulatory concerns that may be raised. Copies of these letters are enclosed.
In smaller and mid-sized cities, local newspapers have been the glue that has helped to hold those communities together. As bigger companies and community banks have become less prevalent, these newspapers remain even more vital— beyond just the profits and losses that they might make. While a fractured media landscape and rapidly changing technology continue to challenge the industry, I remain concerned that the newspapers that may be impacted by this potential acquisition—including the ones serving smaller to mid-size cities in my state of New York—will face devastating cuts by an indifferent media conglomerate that is backed by an even more indifferent hedge fund seeking to generate a profit.
Sincerely,
Charles E. Schumer
U.S. Senator
Enclosures
###
