Perhaps the endgame for Tribune Publishing
As a Gannett offer looms, a look at the publisher's various struggles
April 26, 2016
By the editors of Media Life
This article is part of a Media Life series “Reinventing the American Newspaper.”Click here to read other stories in the series.
The list of troubled newspaper companies includes pretty much any company that owns a newspaper.
Plunging circulation and huge declines in ad revenue have hit every publisher hard.
But Tribune Publishing is arguably the most troubled of that lot, and its issues go much further back than the others.
The problems started more than a decade ago, and they’ve only grown since Tribune Co. spun off its money-making TV stations into a separate company called Tribune Media two years ago, leaving print to fend for itself in a declining market.
On Monday, Gannett went public with an $815 million offer to buy Tribune, and it appears likely that the two publishing giants will come to a deal.
Whatever the outcome, clearly something has to change for Tribune. Last year ad revenue for its newspapers fell 8.7 percent.
The company lost several million dollars overall, and there’s been a great deal of top executive turnover, including the abrupt firing of chief executive officer Jack Griffin, head of digital Michelle Warren’s exit after less than a year on the job, and the hiring of Malcolm CasSelle as president of new ventures.
This churn and uncertainty is very much in line with Tribune’s recent history.
The company, founded in 1847 with the launch of the Chicago Tribune, began a period of rapid yet unsustainable expansion in 2000, when it bought the Times Mirror Company, including The Los Angeles Times, for $8.3 billion.
That was the biggest deal ever for a newspaper company at the time, and it came near the height of the newspaper bubble. Within six years, newspaper ad revenue peaked and the Great Recession began, sending newspapers into a steep decline.
While Tribune recognized the threat of digital in the early 2000s and began targeting younger readers with specialized publications such as RedEye in Chicago and AM New York, they proved flops and cost the company time and money. Eventually control of Tribune fell to Sam Zell, a real estate mogul, who took it private in 2007.
Facing a huge debt load, Zell’s Tribune quickly filed for bankruptcy. Randy Michaels, former CEO of Clear Channel, assumed leadership of Tribune and began making headlines himself for reportedly boorish behavior on his part and by his radio cronies, who badly mishandled the struggling company.
Michaels got the boot in 2010, and Tribune emerged from bankruptcy a couple years later, minus hundreds who were laid off during the recession in part to balance out the millions in bonuses paid out to Michaels and his buddies.
Zell then got out, and the company went public again.
By 2013, it was clear Tribune’s publishing and broadcasting properties would need to be separated in order for either to have a chance to make a go of it. The publishing side’s problems were weighing down the successful broadcasting division, and so in 2014 the two split.
Since then, Tribune Publishing has continued to struggle, with its stock price falling by half since last year. Last fall the company dismissed the editor of the LA Times and consolidated the duties of editor and publisher at several of its dailies, much to the chagrin of journalists, who believe editorial and ad sales should be separate functions.
For some time, Tribune Publishing appeared to be pursuing a growth strategy, hoping to buy up more papers and use their revenue to help pay down its nearly $400 million in debt. It purchased the San Diego Union-Tribune last year, but a bid to buy Freedom Communications, owner of the Orange County Register, was blocked by the Department of Justice on antitrust grounds.
Would selling to Gannett help the papers that have been hurt by their parent’s long struggle, including The Chicago Tribune, LA Times and Baltimore Sun?
Undoubtedly. They would gain the stewardship of a larger, far more stable parent, one in a position to invest where investment was needed, rather than having to pour out slim resources to a struggling, debt-ridden parent that hasn’t been able to get it right in 16 years.
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