Tribune Co. Revenue, Circulation Both Down. Layoffs Resume
The Tribune Co. reports sliding revenue and circulation in the second quarter, and layoffs at Tribune newspapers are resuming. A new announcement says 120 jobs will be cut at the Chicago Tribune, partially through layoffs, and promises more reductions of work force are coming at the L.A. Times.
It is all part of the record of Tribune CEO Dennis FitzSimons, whose tenure has been marked by a continued retreat, in profits, revenue. ad sales, and circulation, while he sponsored a stock buyback that is sinking the company further into debt.
Profits dropped in the second quarter to 28 cents a share, from 73 cents a year earlier, although this was due to some special charges and was not regarded by analysts as particularly significant. Still, it was the second worst quarter for income in the last five years for the beleaguered company.
More significant, according to the analysts was a 1.3% dip in revenue, to $1.43 billion, or 7%, and a 5.3% further drop in circulation at Tribune's 11 newspapers.
In connection with the stock buyback plan, FitzSimons promised $200 million more in cost cuts, which representatives of the Chandler family stockholders in the company have argued is a no-win strategy. They have called for an outside investigation of FitzSimon's management and further sale of some company properties, as well as new growth investment in others. Two Tribune television stations have already been sold, and press reports say Tribune is trying to sell the L.A. Times' old San Fernando Valley plant, where the paper once had such high hopes of increasing circulation. Now, the San Fernando plant has been closed, the staff pared to almost nothing and moved to a tiny office in a new location.
FitzSimons is not changing his practices, and the situation grows worse, with almost weekly announcements of less investment in news gathering. Just last week, it was announced that two former Times-Mirror papers, Newday and the Baltimore Sun, will lose virtually all their foreign bureaus. Now, there is the cut in the staff of the Chicago Tribune, the second in the last year.
It is a disastrous situation, both for the newspapers' staff and the newspapers themselves.
So far, there has been no word as to where new layoffs of L.A. Times personnel may come.
The staff of the Santa Barbara News-Press has set a courageous example by openly fighting management policies that are reducing the quality of the paper. So far, however, there has been little fight shown by staff at Tribune newspapers, as FitzSimons slowly wrecks the company.
It is all part of the record of Tribune CEO Dennis FitzSimons, whose tenure has been marked by a continued retreat, in profits, revenue. ad sales, and circulation, while he sponsored a stock buyback that is sinking the company further into debt.
Profits dropped in the second quarter to 28 cents a share, from 73 cents a year earlier, although this was due to some special charges and was not regarded by analysts as particularly significant. Still, it was the second worst quarter for income in the last five years for the beleaguered company.
More significant, according to the analysts was a 1.3% dip in revenue, to $1.43 billion, or 7%, and a 5.3% further drop in circulation at Tribune's 11 newspapers.
In connection with the stock buyback plan, FitzSimons promised $200 million more in cost cuts, which representatives of the Chandler family stockholders in the company have argued is a no-win strategy. They have called for an outside investigation of FitzSimon's management and further sale of some company properties, as well as new growth investment in others. Two Tribune television stations have already been sold, and press reports say Tribune is trying to sell the L.A. Times' old San Fernando Valley plant, where the paper once had such high hopes of increasing circulation. Now, the San Fernando plant has been closed, the staff pared to almost nothing and moved to a tiny office in a new location.
FitzSimons is not changing his practices, and the situation grows worse, with almost weekly announcements of less investment in news gathering. Just last week, it was announced that two former Times-Mirror papers, Newday and the Baltimore Sun, will lose virtually all their foreign bureaus. Now, there is the cut in the staff of the Chicago Tribune, the second in the last year.
It is a disastrous situation, both for the newspapers' staff and the newspapers themselves.
So far, there has been no word as to where new layoffs of L.A. Times personnel may come.
The staff of the Santa Barbara News-Press has set a courageous example by openly fighting management policies that are reducing the quality of the paper. So far, however, there has been little fight shown by staff at Tribune newspapers, as FitzSimons slowly wrecks the company.
posted by Ken Reich at 8:52 AM
3 Comments:
Tribune newspapers can't do a worse job than the Chandlers did when they owned the Los Angeles Times. Because THEY had to sell Times-Mirror, despite five years of selling off everything but the Times building (something that was seriously floated at one point.)
Even then, when Tribune bought Times-Mirror it came encumbered with a huge multi-billion dollar debt. Then the Tribune was saddled with an unexpected $1 Billion tax liability inherited from the Los Angles Times dealings. That doesn't sound like success to me. Acting as though FitzSimons could miraculously do better is both unfair and not worthy of you.
And the Chandler family objection, as you well know, to the stock buyback is because of THEIR potential tax liabilities. Anyone can google that fact.
Tribune newspapers can't possibly do a worse job than the Chandlers did when they owned the Los Angeles Times. Because, ultimately, the Chandlers were forced to sell the paper, despite five years of selling off everything but the Times building (something that was seriously floated at one point.)
Even then, when Tribune bought Times-Mirror they assumed a $1.6 Billion debt. That wasn't because the Chandlers had been so wildly successful. Then the Tribune was saddled with an unexpected $1 Billion tax liability inherited from the Chandlers curious dealings. That doesn't sound like success to me.
Acting as though FitzSimons could miraculously do better is both unfair and not worthy of you.
The Chandler family objection as you well know to the stock buyback is because of their potential tax liabilities. Not because of the drop in Tribune stock. It can be argued, and the Economist does, that many of the losses at Tribune are directly attributable to the Chandler's complex tax shelter deals that they minimized until after the sale.
http://www.findarticles.com/p/articles/mi_m5072/is_40_27/ai_n15759620
As the Economist noted, "Some of today's dismal performance stems from problems at the Times-Mirror properties which have their origins in the Chandler period: notably, fraudulently inflated circulation figures at Newsday (Tribune had to reimburse advertisers), a $1 billion tax penalty from a Times-Mirror transaction and the decline in the fortunes of the Los Angeles Times."
http://www.economist.com/business/displayStory.cfm?story_id=7099438
http://www.ajr.org/Article.asp?id=4146
Debt
http://www.thestreet.com/brknews/media/899182.html
You argue that the Los Angeles Times would be better served under "local" ownership. Would the Baltimore Sun be similarly well served with "local" ownership? or the Hartfort Courant? Or Newsday? Why is it that only the Los Angeles Times would benefit from "local" ownership? Perhaps because ownership an issue fronted by the unions who resent Tribune newspapers. Because they surely aren't complaining about the lack of local ownership of the Boston Globe, are they?
"The staff of the Santa Barbara News-Press has set a courageous example by openly fighting management policies that are reducing the quality of the paper."
But isn't that what you want, local individual ownership of the Times? Is it realistic to expect Mr. Geffen, Broad or Ubberoth to behave differently than Ms. McCaw?
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