The plot to save the Pioneer Press from its hedge fund owners

Most readers don't know the paper's ownership situation.

Most readers don't know the paper's ownership situation.

Elizabeth Mohr spent March 31 crying at her desk. Crying and typing.

A week earlier, she had approached Pioneer Press editor Mike Burbach, telling him she'd take a buyout after a decade as the paper's cops and courts reporter. Mohr, 35, was by far the youngest of six employees leaving the paper.

She was on deadline that day, filing an investigation into court handling of mental health cases. Just as she was supposed to take a break for her "going away" cake, someone came by Mohr's desk with breaking news: Charges had been filed in a recent homicide.

She filed both stories and ate her cake. Someone gave her a bottle of whiskey. She and other reporters started doing shots at her desk.

"I'm a mom, I have kids," Mohr says. "I was in a job that was getting harder and more stressful, and I was never going to get another raise."

The oldest newspaper in Minnesota had been reduced to a skeleton. Now, its overlords were simply picking at the bones.


On paper, the Pioneer Press is owned by Digital First Media, a chain with papers in California, Michigan, Colorado, Pennsylvania, and along the East Coast.

In truth, it belongs to Alden Global Capital, a hedge fund with billions of dollars in its portfolio. Alden specializes in what's called "vulture capitalism," buying businesses that are undervalued, but still on the way down. They wring out these companies far away from Alden's Manhattan skyscraper. Then they pick at the scraps.

When the Pioneer Press moved to its new offices on St. Paul's west side, someone looked out the window and noticed that a bird had taken up residence on a ledge. A turkey vulture. The next week another showed up, then a third. Reporters named the trio "Alden," "Global," and "Capital."

There was no formal announcement to staff that Alden had acquired Digital First. Reporters discovered this fact by combing through bankruptcy filings in 2010. 

It's not that the Pioneer Press isn't making money: Last year, reporters and editors got profit sharing after the penny-grubbers at Alden took their cut. It's just not making enough.

Hedge funds promise their investors returns in the neighborhood of 20 percent. Newspapers haven't been that profitable for decades. The only way to hit those numbers is to cut costs. That's usually done by slashing employees.

Dave Orrick, an outdoors writer and one of the leaders of the Pioneer Press union, says the "holy shit" moment came last year, when reporters learned their printing plant and downtown office building were being sold. The office had been listed for $4 million. How much of that profit would be invested in the paper? they asked. None. The hedge fund was taking it all.

A while back, the union took out one of the strangest newspaper ads in memory. For sale: One newspaper, with a small, desperate but dedicated staff, and a Sunday circulation approaching 200,000. Sale price negotiable, as determined by money men in Manhattan.

The Pioneer Press business department turned down the ad. So they took their business to the Star Tribune.

It worked. Orrick and others have heard from prospective buyers, and are hitting up wealthy sources and acquaintances.

A couple weeks ago, Orrick and reporter Nick Woltman had coffee with "an important individual who cares about the East Metro," Orrick says. Their companion had no idea the paper was being plucked to death.

"A lot of people don't know the situation we're in," Woltman says. "They're surprised when we tell them we're owned by a hedge fund, based in New York, and we have very little control over what happens to us."

Local media hound David Brauer says people have been pre-filing obituaries for the Pioneer Press since at least 1987. He admires the way the band has kept playing long after hitting the iceberg.

"I'm rooting for them. But do I think it'll be around 10 years from now?" Brauer says. "No. But then I would've said that 10 years ago."

One of Orrick's conversations progressed far enough that the possible buyer asked for financial details about the company.

"There was this awkward exchange between me and other people in the company, saying, 'Hey, I'm a reporter here in St. Paul... and I've got someone who may want to buy us,'" Orrick says.

Weird as it was, they took him seriously.

Orrick is in the curious position of trying to sell something he doesn't own. He's not a salesman, or even a business guy. Last Wednesday, Orrick intended to spend his afternoon "out in the woods," hoping to get far enough out to lose cell phone service. He's more at home out on a lake.

Now, he's rigging up the biggest lure of his life, hoping something's biting. 

Correction: Previously this story stated Pioneer Press reporters did not know of anyone from Alden Global Capital ever setting foot in the newsroom. Dave Orrick says he believes Alden employees might have visited as part of a group of Digital First Media board members who toured the Pioneer Press building "a couple years ago." Shortly after that visit came "a wave of buyouts."

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