Billionaires have had a pretty good pandemic. There are more of them than there were a year ago, even as the crisis has exacerbated inequality. But scrutiny has followed these ballooning fortunes. Policymakers are debating new taxes on corporations and wealthy individuals. Even their philanthropy has come under increasing criticism as an exercise of power as much as generosity.
One arena in which the billionaires can still win plaudits as civic-minded saviors is buying the metropolitan daily newspaper.
The local business leader might not have seemed like such a salvation a quarter century ago, before Craigslist, Google and Facebook began divvying up newspapers’ fat ad revenues. Generally, the neighborhood billionaires are considered worth a careful look by the paper’s investigative unit. But a lot of papers don’t even have an investigative unit anymore, and the priority is survival.
This media landscape nudged newspaper ownership from the vanity column toward the philanthropy side of the ledger. Paying for a few more reporters and to fix the coffee machine can earn you acclaim for a lot less effort than, say, spending two decades building the Bill and Melinda Gates Foundation.
$680 million bid by Hansjörg Wyss, a little-known Swiss billionaire, and Stewart W. Bainum Jr., a Maryland hotel magnate, for Tribune Publishing and its roster of storied broadsheets and tabloids like The Chicago Tribune, The Daily News and The Baltimore Sun.
Should Mr. Wyss and Mr. Bainum succeed in snatching Tribune away from Alden Global Capital, whose bid for the company had already won the backing of Tribune’s board, the purchase will represent the latest example of a more than decade-long quest by some of America’s ultrawealthy to prop up a crumbling pillar of democracy.
If there was a signal year in this development, it came in 2013. That is when Amazon founder Jeff Bezos bought The Washington Post and the Red Sox’ owner, John Henry, bought The Boston Globe.
“I invested in The Globe because I believe deeply in the future of this great community, and The Globe should play a vital role in determining that future,” Mr. Henry wrote at the time.
led a revival of the paper to its former glory. And after a somewhat rockier start, experts said that Mr. Henry and his wife, Linda Pizzuti Henry, the chief executive officer of Boston Globe Media Partners, have gone a long way toward restoring that paper as well.
Norman Pearlstine, who served as executive editor for two years after Dr. Soon-Shiong’s purchase and still serves as a senior adviser. “I don’t think that’s open to debate or dispute.”
From Utah to Minnesota and from Long Island to the Berkshires, local grandees have decided that a newspaper is an essential part of the civic fabric. Their track records as owners are somewhat mixed, but mixed in this case is better than the alternative.
Researchers at the University of North Carolina at Chapel Hill released a report last year showing that in the previous 15 years, more than a quarter of American newspapers disappeared, leaving behind what they called “news deserts.” The 2020 report was an update of a similar one from 2018, but just in those two years another 300 newspapers died, taking 6,000 journalism jobs with them.
“I don’t think anybody in the news business even has rose colored glasses anymore,” said Tom Rosenstiel, executive director of the American Press Institute, a nonprofit journalism advocacy group. “They took them off a few years ago, and they don’t know where they are.”
“The advantage of a local owner who cares about the community is that they in theory can give you runway and also say, ‘Operate at break-even on a cash-flow basis and you’re good,’” said Mr. Rosenstiel.
won a prestigious Polk Award for its coverage of the killing of George Floyd and the aftermath.
“The communities that have papers owned by very wealthy people in general have fared much better because they stayed the course with large newsrooms,” said Ken Doctor, on hiatus as a media industry analyst to work as C.E.O. and founder of Lookout Local, which is trying to revive the local news business in smaller markets, starting in Santa Cruz, Calif. Hedge funds, by contrast, have expected as much as 20 percent of revenue a year from their properties, which can often be achieved only by stripping papers of reporters and editors for short-term gain.
Alden has made deep cuts at many of its MediaNews Group publications, including The Denver Post and The San Jose Mercury News. Alden argues that it is rescuing papers that might otherwise have gone out of business in the past two decades.
And a billionaire buyer is far from a panacea for the industry’s ills. “It’s not just, go find yourself a rich guy. It’s the right rich person. There are lots of people with lots of money. A lot of them shouldn’t run newspaper companies,” said Ann Marie Lipinski, curator of the Nieman Foundation for Journalism at Harvard and the former editor of The Chicago Tribune. “Sam Zell is Exhibit A. So be careful who you ask.”
beaten a retreat from the industry. And there have even been reports that Dr. Soon-Shiong has explored a sale of The Los Angeles Times (which he has denied).
“The great fear of every billionaire is that by owning a newspaper they will become a millionaire,” said Mr. Rosenstiel.
Elizabeth Green, co-founder and chief executive at Chalkbeat, a nonprofit education news organization with 30 reporters in eight cities around the country, said that rescuing a dozen metro dailies that are “obviously shells of their former selves” was never going to be enough to turn around the local news business.
“Even these attempts are still preserving institutions that were always flawed and not leaning into the new information economy and how we all consume and learn and pay for things,” said Ms. Green, who also co-founded the American Journalism Project, which is working to create a network of nonprofit outlets.
Ms. Green is not alone in her belief that the future of American journalism lies in new forms of journalism, often as nonprofits. The American Journalism Project received funding from the Houston philanthropists Laura and John Arnold, the Craigslist founder Craig Newmark and Laurene Powell Jobs’s Emerson Collective, which also bought The Atlantic. Herbert and Marion Sandler, who built one of the country’s largest savings and loans, gave money to start ProPublica.
“We’re seeing a lot of growth of relatively small nonprofits that are now part of what I would call the philanthropic journalistic complex,” said Mr. Doctor. “The question really isn’t corporate structure, nonprofit or profit, the question is money and time.”
operating as a nonprofit.
After the cable television entrepreneur H.F. (Gerry) Lenfest bought The Philadelphia Inquirer, he set up a hybrid structure. The paper is run as a for-profit, public benefit corporation, but it belongs to a nonprofit called the Lenfest Institute. The complex structure is meant to maintain editorial independence and maximum flexibility to run as a business while also encouraging philanthropic support.
Of the $7 million that Lenfest gave to supplement The Inquirer’s revenue from subscribers and advertisers in 2020, only $2 million of it came from the institute, while the remaining $5 million came from a broad array of national, local, institutional and independent donors, said Jim Friedlich, executive director and chief executive of Lenfest.
“I think philosophically, we’ve long accepted that we have no museums or opera houses without philanthropic support,” said Ms. Lipinski. “I think journalism deserves the same consideration.”
Mr. Bainum has said he plans to establish a nonprofit group that would buy The Sun and two other Tribune-owned Maryland newspapers if he and Mr. Wyss succeed in their bid.
“These buyers range across the political spectrum, and on the surface have little in common except their wealth,” said Mr. Friedlich. “Each seems to feel that American democracy is sailing through choppy waters, and they’ve decided to buy a newspaper instead of a yacht.”
Tribune Publishing, the newspaper chain that includes The Chicago Tribune, The Daily News and The Baltimore Sun, said on Monday that it has begun serious discussions about a sale of the company to a pair of bidders who came through with an offer nearly two months after Tribune agreed to sell itself to Alden Global Capital, a New York hedge fund.
The new bid, which is greater than the amount offered by Alden, was made on Thursday by Stewart W. Bainum Jr., a Maryland hotel magnate, and Hansjörg Wyss, a Swiss billionaire who made his fortune as a manufacturer of medical devices.
The two have joined together in a company called Newslight. Tribune Publishing announced on Monday that it would “engage in discussions and negotiations” with Mr. Bainum and Mr. Wyss. The company added that, for now, it will not “terminate the Alden merger agreement or enter into any merger agreement with Newslight, Mr. Bainum or Mr. Wyss.”
Until recently, it looked as though Alden Global Capital would almost certainly become the next owner of Tribune. Late last month, Mr. Wyss emerged as a surprise new player, telling The New York Times that he would team up with Mr. Bainum in a bid for the chain. On Thursday, Mr. Wyss and Mr. Bainum submitted their bid, which valued Tribune at $18.50 a share, beating Alden’s offer of $17.25.
reported earlier by The Wall Street Journal.
Tribune Publishing said on Monday that its special committee had determined that the competing bid from Mr. Wyss and Mr. Bainum would be reasonably expected to lead to a “superior proposal” than the Alden bid.
Today in Business
But the Tribune advised caution, telling shareholders, “There can be no assurance that the discussions with Newslight and its principals will result in a binding proposal.”
Nearly two months ago, Mr. Bainum had reached a nonbinding agreement to establish a nonprofit that would buy The Sun and two other Tribune-owned Maryland newspapers from Alden, for $65 million, after the Alden-Tribune deal gained shareholder approval. That agreement ran into trouble soon after it was made, however. Last month, Mr. Bainum, the chairman of Choice Hotels International, one of the world’s largest hotel chains, made a bid for all of Tribune, offering $18.50 a share.
After considering the bid from Mr. Bainum last month, Tribune said it still favored the agreement with Alden, which had solid financing. At the same time, the board informed Mr. Bainum that he was free to find backers to make his offer more attractive. He did just that by joining with Mr. Wyss.
opinion essay in which two former Chicago Tribune reporters, David Jackson and Gary Marx, warned that Alden would create “a ghost version of The Chicago Tribune.” Other Tribune journalists, from California to Maryland, have led campaigns to persuade local benefactors to buy Tribune Publishing, or at least one of its papers.
Mr. Wyss, who lives in Wyoming, said he joined the effort to buy Tribune because of his belief in a robust press. “I don’t want to see another newspaper that has a chance to increase the amount of truth being told to the American people going down the drain,” he said in the interview last month.
Bloomberg identified it as Archegos Capital Management, a New York-based family office that manages the wealth of Bill Hwang, a former hedge fund manager at Tiger Asia Management who was found guilty of wire fraud in 2012.
Investment banks that provided services to Archegos, such as Goldman Sachs and Morgan Stanley, dumped huge quantities of stocks including ViacomCBS and Chinese tech companies on Friday.
Archegos was forced into the stock sales, worth about $20 billion, after bets the fund made moved the wrong way, Bloomberg reported. Shares in ViacomCBS, one of Archegos’s positions, dropped 23 percent on Wednesday last week. On Friday, the share price plummeted a further 27 percent as the investment banks liquidated positions. ViacomCBS shares fell about 3 percent in early trading on Monday.
Shares in Goldman Sachs and Morgan Stanley opened about 2-3 percent lower on Monday. Shares in Deutsche Bank fell more than 3 percent, after it was said to also have some exposure to Archegos.
Credit Suisse has already been roiled this month by the collapse of Greensill Capital, a London-based financial firm it sold funds for, and to whom it extended loans of $140 million. The Swiss bank told investors it would probably report some losses on the loan.
“A significant U.S.-based hedge fund defaulted on margin calls made last week by Credit Suisse and certain other banks,” the Swiss bank said on Monday. It did not yet know the exact size of the loss from exiting its positions but “it could be highly significant and material to our first quarter results,” the statement said.
Elsewhere in markets
Oil prices bounced around on Monday following news about the fate of the container ship that had been blocking the Suez Canal for nearly week. The ship was finally freed on Monday, raising the prospect that trade flows would be restored, but authorities said more work was needed before maritime traffic could restart.
Yields on 10-year Treasury notes fell 2 basis points, or 0.02 percentage point, to 1.65 percent.
Bill Hwang, right, with his lawyer in 2012. Archegos Capital Management manages the personal fortune of the former hedge fund mogul.Credit…Emile Wamsteker/Bloomberg
The fallout from risky investments made by Archegos Capital Management continued to spread through the global markets on Monday, and it could spur more attention from regulators on the murky world of swaps and investor borrowing, the DealBook newsletter reports.
But how did one firm’s bad bets cascade to become a multibillion-dollar fire sale of stocks by banks around the world? Here’s what we know so far:
Archegos manages the personal fortune of the former hedge fund mogul Bill Hwang, who won Wall Street’s business despite having pleaded guilty to insider trading years ago. It amassed huge positions in media giants like ViacomCBS and in several Chinese tech companies — largely with borrowed money.
The Archegos strategy included using swaps, contracts that gave Mr. Hwang financial exposure to companies’ shares while hiding both his identity and how big his positions really were. (It is also becoming increasingly apparent that several Wall Street banks lent Archegos money without knowing that others were doing the same thing for the same trades.)
Trouble for Mr. Hwang, and his banks, arose when the prices of those stocks started to fall. That prompted some of his lenders to demand cash to cover his bets. When they began to question his ability to do so, some of them, including Goldman Sachs and Morgan Stanley, seized some of his holdings and kicked off the sale $20 billion worth in huge block trades.
That forced selling led to even bigger drops in the prices of those stocks, starting a vicious circle.
Goldman Sachs has told investors that its potential losses are “immaterial,” having covered its exposure, but other investment banks faced a reckoning:
Credit Suisse told investors that a “U.S.-based hedge fund” had defaulted on its margin calls, which could lead to losses that were “highly significant and material to our first-quarter results.”
Nomura said that one of its U.S. arms could suffer “a significant loss” because of the forced sales.
One person who is surely paying attention is Gary Gensler: President Biden’s pick to lead the S.E.C. has been an advocate for market transparency, having argued that unregulated dark pools could cause a broader risk to the U.S. economy.
Southwest Airlines, the largest buyer of Boeing’s 737 Max jet, said that it had ordered a total of the planes over the next decade.Credit…Jim Watson/Agence France-Presse — Getty Images
Southwest Airlines is doubling down on Boeing’s troubled 737 Max jet, adding 100 new orders for the plane just months after regulators began allowing it to fly again.
The airline, already the largest customer of the Max, said on Monday that it had ordered a total of 349 Max jets over the next decade. Southwest, which resumed flights aboard the Max this month, also said it had more than doubled the number of planes it had options to buy, to 270.
“Southwest Airlines has been operating the Boeing 737 series for nearly 50 years, and the aircraft has made significant contributions to our unparalleled success,” Gary Kelly, Southwest’s chief executive, said in a statement. “Today’s commitment to the 737 Max solidifies our continued appreciation for the aircraft.”
Regulators around the world grounded the Max, which is quieter and more fuel-efficient than its predecessors, in March 2019 following fatal crashes in Ethiopia and Indonesia that killed 346 people. The Federal Aviation Administration lifted its ban on the plane in November, requiring various changes and upgrades. It was soon followed by other aviation regulators and the plane has been used on thousands of flights since.
The expanded Southwest order comes as more passengers start flying again. More than 1.5 million people were screened at airport security checkpoints on Sunday, according to the Transportation Security Administration, the most since the coronavirus pandemic began. Still, that was about 37 percent fewer people than the agency had screened on the same day in 2019.
Southwest did not say how much it will pay for its new Max order. The airline is spending more than $10 billion in new and existing airplane orders. The airline expects to receive 28 Max planes this year and at least 30 each year after through 2025.
By acquiring Houghton Mifflin, HarperCollins, which is owned by Rupert Murdoch’s News Corp, will be better able to compete as publishing has come to be dominated by the biggest players.Credit…Richard Drew/Associated Press
HarperCollins, one of the five largest publishing companies in the United States, has made a deal to acquire Houghton Mifflin Harcourt Books and Media, the trade publishing division of Houghton Mifflin Harcourt, for $349 million.
The acquisition will help HarperCollins expand its catalog of backlist titles at a moment of growing consolidation in the book business. Houghton Mifflin publishes perennial sellers by well-known authors such as J.R.R. Tolkien, George Orwell, Philip Roth and Lois Lowry, as well as children’s classics and best-selling cookbooks and lifestyle guides.
News of the sale was reported earlier by The Wall Street Journal.
By acquiring Houghton Mifflin, HarperCollins, which is owned by Rupert Murdoch’s News Corp, will be better able to compete as publishing has come to be dominated by the biggest players.
The book business has been transformed by consolidation in the past decade, with the merger of Penguin and Random House in 2013, News Corp’s purchase of the romance publisher Harlequin, and Hachette Book Group’s acquisition of Perseus Books. Last fall, ViacomCBS agreed to sell Simon & Schuster to Penguin Random House for more than $2 billion, in a deal that has drawn scrutiny from antitrust regulators and has raised concerns among booksellers, authors and agents.
Book sales across the industry have remained strong during the pandemic, but Houghton Mifflin saw its revenue fall sharply last year because of a steep drop in sales in its education division. Its revenue fell by more than 46 percent in the nine months that ended on Sept. 30 of last year, compared with the same period in 2019. The company put its trade publishing division up for sale last fall, as it aims to focus on its core business of K-12 educational publishing, and to pay down its debt.
“There is incredible demand for our expertise as schools across the country plan for post-pandemic learning and recovery,” Houghton Mifflin’s president and chief executive, Jack Lynch, said in a news release. “This is an inflection moment for K-12 education in our country and for HMH as a trusted partner to schools and teachers in advancing learning for every student.”
Tankers and freight ships near the entrance of the Suez Canal.Credit…Ahmed Hasan/Agence France-Presse — Getty Images
Oil prices fell on Monday as word spread that the giant cargo ship blocking the Suez Canal had been set free, raising hopes that hundreds of vessels, many carrying oil and petroleum products, could soon proceed through the critical waterway.
Oil prices had swirled earlier in the day, as prospects of an end to the logjam brightened, and then dimmed. But following the announcement that the containership Ever Given had been freed, the price of Brent crude, the international benchmark, fell about 2.5 percent, to $63.90 a barrel.
Since the vessel got stuck early last week, tankers havebeen lining up at the entrances to the canal waiting to deliver their cargoes to Europe and Asia.
The Suez Canal is a crucial choke point for oil shipping, but so far the impact on the oil market of this major interruption of trade flows has been relatively muted. Though prices jumped after shipping on the canal was halted, oil prices still remain below their nearly two-year highs of about $70 a barrel reached earlier this month.
Traders are now expected to focus on broader threats to the oil market, including whether the imposition of new lockdowns in Europe may hold back the recovery of oil demand from the pandemic.
From a global perspective, oil supplies are considered adequate, and the Organization of the Petroleum Exporting Countries, Russia and other producers, the group known as OPEC Plus, are withholding an estimated eight million barrels a day, or about 9 percent of current consumption, from the market. Officials from OPEC Plus are expected to meet by video conference on Thursday to discuss whether to ease output cuts.
Goldman Sachs’s headquarters in New York. A group of investors is suing the Wall Street bank over claims of fraud. Credit…Johannes Eisele/Agence France-Presse — Getty Images
The Supreme Court will hear arguments on Monday from Goldman Sachs and pension funds over a claim that the Wall Street giant misled investors about its work selling complex debt investments in the prelude to the 2008 financial crisis.
In its latest brief, Goldman makes an interesting argument, the DealBook newsletter reports: Investors shouldn’t rely on statements such as “honesty is at the heart of our business” or “our clients’ interests always come first” that appear in Securities and Exchange Commission filings and annual reports.
The case is a test of shareholders’ ability to sue over claims of investment fraud. The pension funds sought to sue as a class over Goldman’s statements, saying they belied those statements of honesty, and lower courts agreed to let them proceed. Goldman has argued that the investors are engaged in “guerrilla warfare” and aren’t providing “serious legal arguments,” relying on support from the federal government instead.
However, the Biden administration isn’t taking sides, technically. It will argue as a “friend of the court” on Monday that “meritorious private securities-fraud suits” are “an essential complement” to enforcing securities laws.
“I expect the court to be troubled by the claim that companies cannot be held accountable for saying that clients come first and then acting otherwise,” Robert Jackson Jr., who served on the S.E.C. from 2018 to 2020 and is now an N.Y.U. law professor, told DealBook.
The justices probably won’t agree with the claim that making a company “mean what it says” will lead to a tsunami of meritless lawsuits,” he added. Regardless, Goldman is right that the stakes are high, because the case is likely to decide whether shareholders can “hold corporate insiders accountable when they tell investors one thing and do another,” Mr. Jackson said.
President Nicolás Maduro of Venezuela promoted an unproven remedy for Covid-19 on Facebook, which prompted the company to freeze his page. Credit…Manaure Quintero/Reuters
The Facebook page of Venezuela’s president, Nicolás Maduro, was frozen for “repeated” violations of its misinformation policies, including a post about an unproven remedy for Covid-19, the company said on Sunday, the latest example of the social media giant cracking down on political figures who violate its content policies.
Mr. Maduro’s Facebook page will be frozen for 30 days in a “read-only” mode, the company said, “due to repeated violations of our rules.”
“We removed a video posted to President Nicolas Maduro’s Page for violating our policies against misinformation about Covid-19 that is likely to put people at risk for harm,” a Facebook spokesman said. “We follow guidance from the W.H.O. that says there is currently no medication to cure the virus.” The spokesman was referring to the World Health Organization.
Facebook’s move came after Mr. Maduro posted a video on his page that promoted Carvativir, a drug derived from thyme. He said in January that the medicine was a “miracle,” but did not provide evidence of its effectiveness — and declined to release the name of the “brilliant Venezuelan mind” that created the drug. In the video, Mr. Maduro falsely claimed that Carvativir can be used preventively and therapeutically against the coronavirus.
In the past, Facebook has been criticized for its inaction against political figures who test the boundaries of the company’s content policies by spreading misinformation. Mark Zuckerberg, the founder and chief executive of Facebook, has said he does not want to be the “arbiter of truth” in public discourse.
But in recent months, Facebook has cracked down on certain types of misinformation across the network. The company has banned posts containing false or misleading information regarding the coronavirus, and has shown willingness to take action against some political figures. And in the past, it has removed at least one post by Jair Bolsonaro, the president of Brazil, for false coronavirus remedy claims regarding the malaria drug hydroxychloroquine.
In January, after insurgents stormed the United States Capitol, President Donald J. Trump’s account was banned indefinitely for inciting his supporters to violent action using the social network.
In response to his account restriction, Mr. Maduro has said Facebook is practicing a form of “digital totalitarianism,” according to Reuters, which first reported Mr. Maduro’s suspension.
Mr. Maduro said on Twitter on Sunday that he would continue to broadcast his regular coronavirus briefing from his other digital accounts, including Instagram, YouTube and Twitter. And to circumvent his suspension, he said he would use the Facebook account belonging to his wife, Cilia Flores, to broadcast Covid-19 information. Facebook would not comment on whether it would suspend Ms. Flores’s account.
A rally on Friday in support of the Amazon workers outside the Retail, Wholesale and Department Store Union’s building in Birmingham, Ala.Credit…Charity Rachelle for The New York Times
One of the most closely watched union elections in recent history is wrapping up on Monday, one that could alter the shape of the labor movement and one of America’s largest employers.
Almost 6,000 workers at an Amazon warehouse near Birmingham, Ala., one of the company’s largest, are eligible to vote in this election. After years of fierce resistance from the company, they could form the first union at an Amazon operation in the United States.
The outcome of the vote may not be known for days, but the union drive has already succeeded in roiling the world’s biggest e-commerce company and spotlighting complaints about its labor practices, The New York Times’s Karen Weise and Michael Corkery write. If the Retail, Wholesale and Department Store Union succeeds, it would be a huge victory for the labor movement, whose membership has declined for decades. A victory would also give it a foothold inside one of the country’s largest private employers. The company now has 950,000 workers in the United States, after adding more than 400,000 in the last year alone.
If the union loses, particularly by a large margin, Amazon will have turned the tide on a unionization drive that seemed to have many winds at its back. A loss could force labor organizers to rethink their overall strategy and give Amazon confidence that its approach is working.
Hansjörg Wyss, the former chief executive of the medical device manufacturer Synthes, said he had agreed to join a bid for Tribune Publishing.Credit…Ruben Sprich/Reuters
A Swiss billionaire who has donated hundreds of millions to environmental causes is a surprise new player in the bidding for Tribune Publishing, the major newspaper chain that until recently seemed destined to end up in the hands of a New York hedge fund.
Hansjörg Wyss (pronounced Hans-yorg Vees), the former chief executive of the medical device manufacturer Synthes, said he had agreed to join with the Maryland hotelier Stewart W. Bainum Jr. in a bid for Tribune, an offer that could upend Alden Global Capital’s plan to take full ownership of the company, Marc Tracy of The New York Times writes.
Mr. Wyss, who has given away some of his fortune to help preserve wildlife habitats in Wyoming, Montana and Maine, said he was motivated to join the Tribune bid by his belief in the need for a robust press. “I have an opportunity to do 500 times more than what I’m doing now,” he said.
Alden, which already owns roughly 32 percent of Tribune Publishing shares, is known for drastically cutting costs at the newspapers it controls through its MediaNews Group subsidiary. Last month, the hedge fund reached an agreement with Tribune, whose papers include The Daily News, The Baltimore Sun and The Chicago Tribune, to buy the rest of the company’s shares.
The sale of Tribune, which the newspaper company hopes to conclude by July, requires regulatory approval and yes votes from company shareholders representing two-thirds of the non-Alden stock.
“We are in a hyper-growth industry,” said Dhivya Suryadevara, Stripe’s chief financial officer.Credit…Richard Drew/Associated Press
Thousands of financial technology start-ups are riding an investor frenzy driven by a growing realization that the industry is ripe for a tech makeover, writes Erin Griffith of The New York Times.
When the pandemic forced businesses to speed up their usage of digital tools, including e-commerce and online banking, the demand for what is known as fintech exploded.
Now start-ups with names like Blend, Brex and Dave that provide decidedly unglamorous banking, lending and payment processing offerings are hot tickets. That was punctuated this month when Stripe, a payments company, raised $600 million in a financing that valued it at $95 billion, the highest ever for a private start-up in the United States.
Financial technology companies are also making a splash on the stock market. On Tuesday, Robinhood, a stock trading app popular with young adults, filed for an initial public offering. And Coinbase, a cryptocurrency start-up, is scheduled to go public in the next few weeks in what could be a $100 billion listing.
In total, venture capital investors poured $44.4 billion into financial technology start-ups last year, up from $1.1 billion in 2009, according to PitchBook, which tracks private financing. Many investors are now making bold predictions that these start-ups will upend big banks, established credit card providers — and in some cases, the entire financial system.
Christopher Waller, a member of the Federal Reserve’s Board of Governors.Credit…Erin Schaff/The New York Times
The Federal Reserve’s independence from partisan politics is essential and must be protected, Christopher Waller, a member of Fed’s Board of Governors, said in his first speech as a top central bank official.
Mr. Waller, who previously worked in research at the Federal Reserve Bank of St. Louis, was nominated to the Fed by President Donald J. Trump and confirmed to the job late last year.
He used his first extensive public remarks to push back on the idea that the Federal Open Market Committee, which sets interest rates, might keep them steady just to make interest costs on the government’s huge debt pile low in the wake of the economic downturn caused by the pandemic.
“Going forward, the monetary policy choices of the F.O.M.C. will continue to be guided solely by our mandate to promote maximum employment and stable prices,” Mr. Waller said. “Partisan policy preferences or the debt-financing needs of the Treasury will play no role in that decision.”
Mr. Waller noted that the government’s pandemic response spending packages — which totaled more than $5 trillion — have pushed the U.S. debt to a level last seen in World War II, relative to the nation’s output.
At the same time, the Fed has been keeping short-term policy interest rates near zero while buying up huge amounts of government debt to make financing of all kinds cheaper, helping to stoke demand and fuel an economic recovery.
That has contributed to a narrative that “the Federal Reserve will succumb to pressures” to keep rates low and continue buying bonds, Mr. Waller said, policies that would make it easier for the government to borrow and spend.
“It is simply wrong,” he said. “Monetary policy has not and will not be conducted for these purposes.”
Instead, the Fed will focus on fostering maximum employment and price stability — its two Congress-given goals. The Fed is politically independent, and although it has traditionally cooperated with the Treasury Department during times of crisis, elected officials and those with close ties to the presidential administration do not have a say in how it sets monetary policy to achieve its targets.
Mr. Waller’s remarks do not mean interest rates are poised to rise soon, though. The Fed has signaled that it will leave them near rock-bottom until inflation has moved higher and looks poised to stay there, and until the economy has returned to what they see as full employment.
A Swiss billionaire who has donated hundreds of millions to environmental causes is a surprise new player in the bidding for Tribune Publishing, the major newspaper chain that until recently seemed destined to end up in the hands of a New York hedge fund.
Hansjörg Wyss (pronounced Hans-yorg Vees), the former chief executive of the medical device manufacturer Synthes, said he had agreed to join with the Maryland hotelier Stewart W. Bainum Jr. in a bid for Tribune, an offer that could upend Alden Global Capital’s plan to take full ownership of the company, Marc Tracy of The New York Times writes.
Mr. Wyss, who has given away some of his fortune to help preserve wildlife habitats in Wyoming, Montana and Maine, said he was motivated to join the Tribune bid by his belief in the need for a robust press. “I have an opportunity to do 500 times more than what I’m doing now,” he said.
Alden, which already owns roughly 32 percent of Tribune Publishing shares, is known for drastically cutting costs at the newspapers it controls through its MediaNews Group subsidiary. Last month, the hedge fund reached an agreement with Tribune, whose papers include The Daily News, The Baltimore Sun and The Chicago Tribune, to buy the rest of the company’s shares.
The sale of Tribune, which the newspaper company hopes to conclude by July, requires regulatory approval and yes votes from company shareholders representing two-thirds of the non-Alden stock.
An octogenarian Swiss billionaire who makes his home in Wyoming and has donated hundreds of millions to environmental causes is a surprise new player in the bidding for Tribune Publishing, the major newspaper chain that until recently seemed destined to end up in the hands of a New York hedge fund.
Hansjörg Wyss (pronounced Hans-yorg Vees), the former chief executive of the medical device manufacturer Synthes, said in an interview on Friday that he had agreed to join with the Maryland hotelier Stewart W. Bainum Jr. in a bid for Tribune Publishing, an offer that could upend Alden Global Capital’s plan to take full ownership of the company.
Mr. Wyss, who has given away some of his fortune to help preserve wildlife habitats in Wyoming, Montana and Maine, said he was motivated to join the Tribune bid by his belief in the need for a robust press. “I have an opportunity to do 500 times more than what I’m doing now,” he said.
Alden, which already owns roughly 32 percent of Tribune Publishing shares, is known for drastically cutting costs at the newspapers it controls through its MediaNews Group subsidiary. Last month, the hedge fund reached an agreement with Tribune, whose papers include The Daily News, The Baltimore Sun and The Chicago Tribune, to buy the rest of the company’s shares at $17.25 apiece.
Choice Hotels International, one of the world’s largest hotel chains, to make a bid on March 16 for all of Tribune, beating Alden’s number with an offer of $18.50 a share.
That bid valued the company at about $650 million. The Alden agreement valued Tribune at roughly $630 million.
Tribune was not swayed by Mr. Bainum’s offer. A securities filing on Tuesday revealed that the company’s board recommended that shareholders approve the Alden bid. At the same time, the Tribune board gave Mr. Bainum the go-ahead to pursue financing for his higher bid.
He has done just that by teaming with Mr. Wyss, who said in the interview that he planned to own the company’s flagship paper while he and Mr. Bainum seek benefactors for Tribune’s seven other metro dailies, which include The Orlando Sentinel and The Hartford Courant.
“He made that bid because he wants The Baltimore Sun,” Mr. Wyss said, referring to Mr. Bainum. “I said, ‘Yeah, that’s fine. And I have to make The Tribune even better than what it is now.’”
the sale of Synthes to Johnson & Johnson for roughly $20 billion. Mr. Wyss and his family — a daughter, Amy, also lives in Wyoming — had the largest stake in Synthes, owning nearly half the shares.
The sale of Tribune, which the newspaper company hopes to conclude by July, requires regulatory approval and yes votes from company shareholders representing two-thirds of the non-Alden stock. The medical entrepreneur Patrick Soon-Shiong, who owns The Los Angeles Times with his wife, Michele B. Chan, has enough Tribune shares to squash the Alden deal by himself. Dr. Soon-Shiong declined to comment on Saturday.
Mr. Wyss said he would be a civic-minded custodian of The Chicago Tribune. “I don’t want to see another newspaper that has a chance to increase the amount of truth being told to the American people going down the drain,” he said.
Alden’s potential acquisition of Tribune has been fiercely opposed by many journalists at Tribune papers. Alden has aggressively cut costs at many MediaNews Group publications, including The Denver Post and The San Jose Mercury News. Critics say the hedge fund sacrifices journalistic quality for greater profits, while Alden argues that it saves papers that would otherwise join the thousands that have gone out of business in the last two decades.
Mr. Wyss, 85, said he was partly inspired to join Mr. Bainum by a New York Times opinion essay last year in which two Chicago Tribune reporters, David Jackson and Gary Marx, warned that an Alden purchase would lead to “a ghost version of The Chicago Tribune — a newspaper that can no longer carry out its essential watchdog mission.” Since that article appeared, both reporters have left the paper.
Mr. Wyss, born in Bern, first visited the United States as an exchange student in 1958, working for the Colorado Highway Department. He was a journalist as a young man, he said, covering skiing for Neue Zürcher Zeitung, aZurich paper, and filing dispatches on American sports to Der Bund, a Bern paper, when he was studying at Harvard Business School.
He said he believed The Chicago Tribune would prosper under his ownership.
“Maybe I’m naïve,” Mr. Wyss said, “but the combination of giving enough money to a professional staff to do the right things and putting quite a bit of money into digital will eventually make it a very profitable newspaper.”
Tribune Publishing’s board recommended that shareholders approve a purchase offer from the hedge fund Alden Global Capital over a higher bid from a Maryland hotel executive, according to a securities filing Tuesday.
The filing comes a week after Stewart W. Bainum Jr., a hotel magnate, made an $18.50 per share offer for the whole company. Mr. Bainum initially had agreed with Alden to spin off three of Tribune’s titles — The Baltimore Sun and two smaller Maryland papers — at the price of $65 million. But negotiations between Alden and Mr. Banium stalled over details of operating agreements that would be in effect as the Maryland papers transitioned from one owner to another, prompting Mr. Banium to pursue a bid to buy all of Tribune.
Alden, Tribune’s largest shareholder with a 32 percent stake, agreed last month to buy the rest of the company at $17.25 per share and take it private in a deal that would value the company at $630 million. Alden would buy of all the company’s remaining papers, which include The Chicago Tribune and The Daily News.
Alden has been criticized for laying off journalists and shrinking local news coverage at the roughly 60 newspapers it already owns. The hedge fund says it is keeping local newspapers from going out of business.
