As storm clouds swirl over the beleaguered Los Angeles Times, the mood of staff is as black as the paper’s masthead.
A buyout offer is widely expected to be imminent for a number of employees as the Times’ parent company, Chicago’s Tribune Publishing Co., prepares to ax jobs to make up for continuing revenue declines.
Anxious employees looking to editor-in-chief Davan Maharaj for reassurance or communication in recent days have found him largely behind his closed office door.
“I don’t know if the curtains are down, too, but he certainly isn’t as visible as he could be and is not getting top marks from some staff who feel he could be stronger at this time of great uncertainty,” said news analyst and author Ken Doctor.
A core group of veterans in the newsroom, tired of corporate cutbacks and losing faith in the future direction of the paper, are said to be ready to take the buyout.
“Some of those people were intrigued by where Austin Beutner’s strategy as publisher was leading, but after he was replaced last month, now feel it’s time for them to go, too,” added Doctor.
Tribune ousted Beutner as publisher last month in favor of Tim Ryan, who joined from Tribune-owned Baltimore Sun.
Meanwhile, a growing chorus is calling for Tribune to reverse course.
A dozen members of the California Legislature representing Los Angeles County signed a letter Oct. 1 asking Tribune’s directors to restore local leadership to the paper.
“As stewards of the public good, we cannot sit idly by and watch the demise of one of Los Angeles’s most prominent civic institutions,” the letter states. “Our constituents deserve a newspaper that is led by individuals who represent their communities and strengthens their civic consciousness and pride.”
Joining the call, 19 San Fernando Valley leaders sent a separate letter the same day
asking Tribune’s board to consider the value of local ownership and applauding the enhanced role the Times started to play in their community under Beutner’s stewardship. This follows last month’s plea from more than 60 prominent L.A. Angeles leaders, including former Mayors Antonio Villaraigosa and Richard Riordan, asking Tribune to re-instate local leadership at its biggest paper.
Speculation is rife over a series of local billionaires who could be interested in making a bid, with sources telling the Business Journal that the county’s wealthiest person, biopharmaceutical magnate Dr. Patrick Soon-Shiong, and entertainment mogul David Geffen are both thinking about throwing their hats in the ring.
Another leading candidate is real estate developer and philanthropist Eli Broad. Last month, the Business Journal reported that Tribune had rejected an informal offer from Broad for the Times and sister paper the San Diego Union-Tribune, and many believe his interest hasn’t waned.
As the Chicago company seems uninterested in selling its flagship publication – the Times along with the San Diego paper reportedly account for 40 percent of Tribune’s $1.7 billion revenue – a buyer might be forced to move for the whole company through a tender offer for all its shares.
Tribune’s stock price has been cut by more than half since April and closed at $7.98 on Oct. 1, with its valuation plummeting to $210 million.
Tribune reported net income of $42 million last year, a 55 percent decrease from the previous year, due mainly to lower ad revenue and costs associated with its split last summer from broadcasting and digital entity Tribune Media Co., according to a Securities and Exchange Commission filing.
One reason for that sharp decline is that the conglomerate’s digital expansion has failed to take off. A report published last week by Moody’s Investor Service said Tribune competitor New York Times Co. has achieved a far stronger footing in the growing digital space and continues to make strategic investments to bolster its digital advertising and subscription business, while also managing its cost base to address the general decline in print advertising.
“Tribune Publishing has not made the equivalent strides,” said Alina Khavulya, a Moody’s vice president and senior analyst, in a statement.
Continuing declines
Faced with continuing revenue declines, Tribune is expected to soon present a buyout package targeting longer-tenured, less-digital-savvy employees with the aim of running a leaner, cheaper newsroom more attuned to the needs of online audiences.
Recent comments by Jack Griffin, chief executive of Tribune, indicate that jobs and expense cuts would be companywide. In a recent interview with Crain’s Chicago Business, Griffin did not deny cuts were coming but downplayed reports that as many as 80 positions were under threat in Los Angeles – a number that would trim the editorial staff by one-fifth.
“Such an approach is fairly typical as a cost-saving measure and buyout packages don’t usually include the newer employees,” said Jacqueline Breslin, director of human capital services at HR services company TriNet Group Inc. of San Leandro, which is not involved in the Times matter.
However, Doctor said he expects Tribune to hire additional digital-related staff as part of its planned overhaul.
A Tribune spokesman declined to comment for this story.
