Tronc Inc., parent company of the Los Angeles Times and Chicago Tribune, reported a profit of roughly $6.5 million (19 cents a share) in 2016 compared with a loss of $2.8 million (-11 cents a share) the prior year.
The profit came on revenue of $1.61 billion – just shy of the $1.62 billion the company posted in 2015. Tronc’s fourth-quarter revenue for the period ended Dec. 25 slipped to $425 million, down 7 percent from the $457 million posted in the same quarter of 2015.
Despite the fourth-quarter revenue decline, the company nevertheless rocketed to profitability, compared with a year earlier. Fourth-quarter earnings of $19.4 million marked an improvement from a $77,000 loss posted in the same period in 2015.
Nicco Mele, a former senior vice president and deputy publisher at the Times, said a massive late-2015 buyout, eliminating 7 percent of 7,000 employees companywide, coupled with the parent company’s $85 million acquisition of the San Diego Tribune from real estate magnate Doug Manchester earlier that year, could explain some of the fourth-quarter increase.
However, he attributed most of the increase to cost-cutting.
“The profitability doesn’t seem to be coming from any increase in revenue,” said Mele, now a business and media consultant and director of the Shorenstein Center at Harvard University.
Ken Doctor, media analyst for online magazine Politico, said in an e-mail that a bump in Chicago newspaper sales in the wake of the Chicago Cubs’ World Series victory was responsible for at least half of the net income increase for the Tribune last year. In addition to special newspaper editions, the company sold commemorative front-page press plates, books, T-shirts, and other items.
“The commemorative stuff brought in $5 million, making that income hard to replicate in 2017,” Doctor said.
At the same time tronc announced its year-end results, the company said Timothy P. Knight, former chief executive of Newsday Media Group and co-founder of Wrapports with tronc Chairman Michael Ferro, had been appointed president of digital content and commerce division troncX, effective Feb. 23.
“For me, the headline is this: Troncifikation has yet to produce,” said Doctor. “TroncX is flat, 1 percent up, so the results of the whole transformation strategy promised by Michael Ferro has yet to be seen.”
“It’s promising that Tronc brought in Tim Knight to run troncX,” he continued. “He is a savvy news operator, with digital chops, so maybe he can turn around the flagging transformation.”
Still betting on tronc is Patrick Soon-Shiong, L.A.’s wealthiest person and Tronc’s second largest shareholder, who on Feb. 17 purchased more than 14,000 additional shares in two installments at prices of $13.91 and $13.92 a share.
