A local Tribune Publishing Co. analyst blasted the newspaper conglomerate in a memo today, saying it bungled the firing of L.A. Times chief executive and publisher Austin Beutner and called on the company to sell itself to Warren Buffett’s Berkshire Hathaway Inc. before its valuation dips any lower.
The stock closed at $8.13 on the New York Stock Exchange Thursday, its market capitalization dipping precariously close to $200 million.
“We have slowly begun to doubt the capabilities of management to circumvent the declining investor sentiment, and their ability to profitably manage a newspaper company for the long haul,” reads the note from Hamed Khorsand of BWS Financial Inc. of Woodland Hills. Khorsand also said the firm would be suspending guidance on the company.
“Tribune’s management is close to wasting a tremendous opportunity to grow their revenue through strategic steps to address the fallout,” his memo said.
Local leaders have also blasted Tribune for sacking Beutner, calling on the Chicago company to reinstitute local leadership at the paper.
“In the midst of this storm,” said Khorsand in the note, “Tribune’s management has stayed relatively quiet.”
Khorsand criticized Tribune for failing to adequately explain its reasoning for Beutner’s dismissal and its decision to move Baltimore Sun Publisher Tim Ryan into the same role at the Times.
Khorsand also claimed Tribune management expressed to him that they did not expect any economic fallout from the move, only to subsequently lower their revenue guidance for the year.
“Our frustration with Tribune’s handling of this matter can be traced back to one statement: ‘our focus is our investors,’” the memo says.
“At this moment, we’re not quite sure Tribune’s management is concerned with the satisfaction of subscribers. The company has remained quiet and on the defense as other local media outlets have reported on rumors,” it continued. “The best option for Tribune is to sell itself.”
"We are focused on executing our five-point strategic plan and delivering value for shareholders," said a Tribune spokesman in response to the report.
In a phone interview, Khorsand said Berkshire Hathaway would be the best choice to acquire Tribune Publishing. The company’s media division owns dozens of smaller papers on the East Coast, throughout the Midwest and in the South.
“They have the best platform,” said Khorsand. “I think it settles a lot of issues. They operate everything at the local level.”
A Tribune Publishing spokesman did not immediately return a request for comment.