Tribune Co. announces restructuring; will cut nearly 700 jobs
Tribune Co., the parent of the Los Angeles Times, unveiled a restructuring plan that will slash nearly 700 jobs over the next year.
The 6% staff reduction will come primarily from the company’s newspaper unit but will largely involve operations personnel rather than reporters and editors at its eight daily papers, Peter Liguori, Tribune’s chief executive, said in an interview Wednesday.
The restructuring is intended to help Tribune withstand the continuing decline in print advertising, which traditionally has been the lifeblood of the newspaper industry.
“Over time, there will be some small reductions in editorial staff, but the majority of these reductions are going to come from non-reader-facing functions,” Liguori said. “It’s never easy to let go of our colleagues, especially in Tribune, where people have made real significant contributions. But it is critical that we recognize what is going on secularly and we position the business for the best future we can.”
The changes are “not by any means a Hail Mary pass,” Liguori said, stressing that the newspapers are profitable.
As part of the reorganization, functions that are now managed by individual papers, such as advertising and circulation, will be consolidated into single units serving the entire company.
The cutbacks indicate that the newspaper division is bracing for another drop in advertising in 2014, analysts said.
Print ad revenue fell nearly $200 million in the last two years and an additional $62 million in the first nine months of this year.
The revamp comes as Tribune is preparing to spin off its troubled newspapers into a separate company in the second quarter of 2014.
The company is trying to preserve the papers’ value by building up digital operations and limiting newsroom cuts, analysts said.
But Tribune and other companies have been unable to stem the decline in advertising.
Industry ad revenue has tumbled 55% since 2006, said Ken Doctor, an analyst at research firm Outsell Inc.
Most newspaper companies are pursuing a similar strategy, Doctor said. They’re trying to prop themselves up in the hope that other business lines — primarily subscriptions and digital ad sales — can eventually grow to make up some of the difference.
“It took seven years to lose about half” of ad revenue, he said. “The question is: How many years will it take to lose the next half?”
Tribune and other media outlets are trying to limit newsroom cuts to minimize the damage to their franchises, analysts said.
“They have to protect the editorial content,” said Marshall Sonenshine, chairman of Sonenshine Partners, a New York investment bank. “If all you’re doing is spitting back the same information that is available on 24/7 news channels and Internet streams you’re not adding value.”
Editorial departments accounted for 12.7% of operating expenses at large newspapers in 2011, roughly the same percentage as a decade earlier, according to the Inland Press Assn., an industry trade group.
Tribune promoted several executives in the newspaper unit to manage the newly consolidated departments.
Bill Adee will oversee the publishing division’s digital operations. Bob Fleck, currently senior vice president of advertising at the Chicago Tribune, will become executive vice president of advertising for the newspaper unit.
Bill Nagel, currently executive vice president of business services at The Times, will have the new role of executive vice president of marketing for the publishing unit. He will oversee all consumer marketing and circulation operations, as well as brand marketing, market research and events management.
