Friday, December 01, 2006

As Tribune Co. Dithers On A Sale, Advertisers Seek Lower Rates At LAT

Time is not on the side of Dennis FitzSimons, the inept CEO of the Tribune Co. The longer he waits to sell off the assets of the failing company, the less he is going to get for them.

This becomes clear in reviewing two new developments along the long road of deteriorating prospects for the Tribune Co., owner of the L.A. Times and other former Times-Mirror newspapers.

First, FitzSimons announced this week another three-month delay in making decisions as to what to do about selling off Tribune assets. Contrary to earlier statements that a decision would be made by the end of the year, FitzSimons now haplessly says it will be the end of the first quarter of 2007 before a decision is announced. The apparent reason is that bids for Tribune assets have been disappointingly low thus far.

And why not? After the Tribune ousted or lost two publishers and two editors at the L.A. Times, it doesn't take an economic genius to conclude the Tribune assets are simply worth less than they once were. And the way things are going, they will be worth less and less the longer FitzSimons waits. It's like someone on death row. He desperately seeks to delay his execution, but in the meantime, he isn't eating and sleeping well, and his condition goes downhill.

Second, the Los Angeles Business Journal reports, key advertisers at the Times, such as Macy's and several big local auto dealers, are confirming that, due to Times circulation losses, they will press for lower advertising rates in the new year.

This is hardly surprising, since Times circulation is down 8% in the latest report and 15% since the last advertising rates were posted. (Times circulation is actually down by more than one-third, or 450,000, since Tribune Co. bought the paper in 2000).

Tribune total revenue has been flat or sinking, and stock is down by almost 40%. On every hand, the signs accumulate that FitzSimons, president Scott Smith, and such Chicago toadies as David Hiller and James O'Shea, newly designated publisher and editor of the Times, continue to drive the company into the ground.

I was told by a Times staffer this week that O'Shea hasn't even been spending much time in Los Angeles. The fading 63-year-old is reported to have returned to Chicago for medical treatment Thanksgiving week and then spent the whole week with his wife in Chicago.

It would all make a lot of sense were a sale being expedited. Then Hiller and O'Shea could disappear from California forever, but since a sale has been put off, one would normally expect they would be here, manning their posts, even if the ship is sinking. If O'Shea and Hiller had been in command of the Titanic, they may have jumped ship within 15 minutes of it striking the iceburg.

A show of hands at the Old Farts lunch this week found only one of the 60 persons present against a sale of the L.A. Times.

But, so far, there is little sign FitzSimons is listening. Unlike his underlings, he may choose to go down with the ship.

--

As Hezbollah demonstrations began today in Beirut, aimed at bringing down the pro-Western government and putting Iran and Syria in charge, Megan Stack, in a page 1 story in today's L.A. Times, reported that the United Arab Emirates, a Sunni state which is close to Saudi Arabia, has armed a new 13,000-member security force devoted to protecting the government of Premier Fouad Siniora. This is a heartening development, showing that the Lebanese government may have an armed defense after all. I just wonder if Vice President Cheney's visit to Saudi Arabia last week may have had something to do with protecting Siniora and thwarting Iranian and Syrian aggression. It's hard to believe the United Arab Emirates would have acted on its own. Stack, by the way, clearly scooped the New York Times' correspondent in Lebanon, Michael Slackman, with her report.

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