New breed of newspaper owners writing a different story

The newspaper industry is starting to meet its new bosses -- the hedge funds and banks that are moving in as rich family owners and button-down executives move out.

While the objectives of these new owners remain unclear, insiders say the transition period promises more upheaval at newspapers just as they begin to emerge from bankruptcy. Over the past year, stealthy distressed-debt hedge funds like Angelo, Gordon & Co., Alden Global Capital and Oaktree Capital Management have taken major positions in bankrupt newspaper companies such as Tribune Co., owner of the Chicago Tribune, and Philadelphia Newspapers Inc., owner of the Philadelphia Inquirer. Their basic strategy: Quietly buy up as much cheap, delinquent debt as possible and then fight it out in bankruptcy court for a lucrative settlement that transforms the debt into a large share of company stock.

Experts say it is unlikely that any single fund has amassed enough of a stake to take outright control of one or more publishers. And they are hardly acting in concert. But alliances of like-minded funds and big banks like JPMorgan Chase, which have also received significant chunks of equity through restructurings, could give nontraditional investors like Angelo Gordon and Alden unusual clout over a wide swath of the newspaper industry.