Yesterday, Ken Doctor and I wrote about Warren Buffett’s decision to sell Berkshire Hathaway’s newspapers to Lee Enterprises and how it was another move in the rapid consolidation of the American newspaper industry.

But just a few minutes after I hit publish, the story turned more sinister. Alden Global Capital announced via SEC filing that it had purchased a 5.9 percent stake in Lee, through its newspaper holding company MNG Enterprises.

For those who need a reminder: Alden is journalism’s Professor Moriarty, Ra’s al Ghul, Blofeld, and Hans Landa, buying up chunks of newspaper companies and cutting their newsrooms to the bone. They’re the folks who led Chicago Tribune reporters to publicly plead for some civic-minded billionaire to buy their paper.

$LEE was able to bask in the afterglow of a big deal with $BRK for just eight hours before the Heath Freeman, the newspaper industry's chief antagonist, showed up. https://t.co/oYJgrCF1GG

— Activist Insight (@ActivistInsight) January 29, 2020

The transaction cost Alden $9.23 million, and it gives them leverage in the downsizing of yet another newspaper chain, adding Lee to Journal Register Co., MediaNews Group, Gannett, and Tribune. It’s now Lee’s third-largest shareholder.

Alden’s stated reasoning in the filing:

The Reporting Persons acquired their positions in the Shares in the belief that the Shares were undervalued.

Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.

The Reporting Persons intend to engage in discussions with management and/or the Issuer’s Board of Directors about certain operational and strategic matters, including, but not limited to the recently announced acquisition of Berkshire Hathaway’s newspaper operations and matters pertaining to the Issuer’s 2020 Annual Meeting.

In other words, it wants to pressure Lee to cut costs to increase margins (and its share price), and it wants to talk about what other “efficiencies” might be found in various M&A possibilities. It’s alarming that just $9.23 million is all it takes to get that seat at the table.

The NewsGuild’s Julia Reynolds (a former Nieman Fellow) has more of the depressing detail.

The purchase was made through two DFM subsidiaries that Alden set up several years ago to extract cash from the newspaper chain to finance Alden investments. One of the subsidiaries, Strategic Investment Opportunities LLC, was used to buy a $158 million stake in the now-bankrupt Fred’s Pharmacy chain as well as the purchase of 20.6 million shares in Monster.com. It also funded purchases of Gannett stock when Alden tried and failed to take over that news chain last year.

The second wealth-extraction subsidiary is MNG Investment Holdings LLC, which oversees and manages Strategic Investment Opportunities…

Some media observers expect Alden to quickly increase its stake in Lee.

Alden had similarly bought a relatively small stake in Tribune Publishing last year before taking the plunge and acquiring nearly a third of the company. Alden now appears poised to attempt a takeover of Tribune next summer, when a contract prohibiting the hedge fund from acquiring more shares expires on June 30.

Lee stock, having bounced off the Berkshire Hathaway news, was trading at around $2.40 a share right before Alden’s filing — then it dropped 20 percent. (It’s at $1.94 right now.)