The financial situation at the Tribune Co. is worse than we thought, Sam Zell, the company’s CEO, told investors during a conference call. So, expect a series of vast changes, which are sure to make the dispirited journalists working there even more so. Chicago Tribune quotes COO Randy Michaels on what could be coming:
— Slashing newsprint: Company-wide, Tribune could cut about 500 pages out of its newspapers every week by reducing the proportion of editorial content to advertising. The idea is to get a 50/50 ration of ads to editorial. WSJ adds that the 500 pages amounts to 12.5 percent of the company’s weekly page count, not including classifieds and other advertising.
— Productivity and job cuts: All things are not equal, apparently, when it comes to workload at the company’s papers. Some reporters produce less than others, so Tribune plans to take a close look and weed out the ones who aren’t keeping pace on output. In particular, Michaels claimed that the company’s smaller dailies produce much more copy than its larger papers such as Los Angeles Times. For Michaels, this means that the company can cut jobs and not worry about filling its news hole. Not a lot of other specifics were offered, leaving the big question: does this mean that its major dailies will be forced to shift away from time-consuming investigative pieces and longer, in-depth coverage?
— The financial picture: The reduced redesign will actually start with the Sentinel this month. It will then be extended to LAT and other Tribune papers. Zell completed the $8.2 billion buyout of Tribune last December and the company has $13 billion of debt related to the deal. As we reported earlier this month, Tribune’s Q1 revenue came in at $1.11 billion, a 7.8 percent decline from last year, while operating profit dropped by over 21 percent to $143.3 million, as ad revenue fell 15 percent. As a result of the worsening conditions in the newspaper business, the financial cushion Zell was hoping for has come under more pressure, forcing the company to take dire measures, he said during the call.
— Newsday sale won’t help: Given the depth of the declines the newspaper industry is facing and the company’s heavy debt load, Tribune’s $632 million sale of Long Island, NY-based Newsday to Cablevision (NYSE: CVC) won’t provide much relief.
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