Posted on 06/05/2008 2:05:23 PM PDT by abb
http://www.latimes.com/business/la-fi-tribune6-2008jun06,0,3237664.story
From the Los Angeles Times
Tribune says it can meet debt payments for year
Newspapers in the chain will be smaller. Deeper staff cuts are signaled.
By Thomas S. Mulligan
Los Angeles Times Staff Writer
June 6, 2008
Tribune Co. executives said Thursday that thanks to new credit arrangements and the pending $650-million sale of Newsday, the debt-burdened media company would have enough cash to meet its interest and principal payments this year and otherwise would be in compliance with its loan agreements.
Tribune, parent of the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune and other properties, is struggling with annual loan payments of about $1 billion during a severe advertising recession and a shift of readers to the Internet. Chief Executive Sam Zell said in a conference call with analysts that although first-quarter advertising revenue from newspaper publishing was down 15% from a year ago, the situation had improved since March.
Randy Michaels, chief operating officer, said the company planned to impose further deep cuts in newsprint costs and newspaper staffing and could do so without major adverse effects on content.
At The Times, for example, 82 news pages per week can be eliminated, giving the paper a 50-50 ratio of news to advertising, Michaels said. Across Tribune’s nine newspapers, he said, some 500 news pages per week could be cut, for an unspecified but “substantial” savings.
Smaller papers with more graphics, maps and lists will be rolled out companywide beginning this month at the Orlando Sentinel, with the rest of the newspapers following by the end of September, Michaels said.
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http://online.wsj.com/article/SB121270007809749889.html?mod=2_1567_topbox
Tribune Plans Cuts in Pages, Staffers at Papers
By SHIRA OVIDE
June 6, 2008; Page B8
Tribune Co. Chairman Sam Zell detailed planned changes to the company’s struggling newspaper division, including a reduction in the number of pages and staffers at its daily papers.
The changes indicate Mr. Zell is following through quickly on pledges to overhaul the newspaper-and-television concern. Mr. Zell took the helm of the company after he led an $8.2 billion buyout in December. He has pledged to change attitudes and business operations at Tribune, but his task has been made more difficult by declines in newspaper advertising and by the company’s $13 billion debt load stemming from the buyout.
As part of Mr. Zell’s corporate overhaul, Tribune plans in coming weeks to begin trimming the page counts at its newspapers to ensure that the amount of space devoted to news is roughly in line with the amount of space devoted to advertising, he revealed on a conference call with lenders. The move could pare about 500 pages, or 12.5%, from the weekly page total of Tribune’s newspapers, excluding classifieds and other ad sections.
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www.chicagotribune.com/business/chi-fri_rosenthaljun06,0,3045941.column
chicagotribune.com
Tribune Co. faces big cuts, fast
Phil Rosenthal
Media
June 6, 2008
Having concluded Tribune Co.’s newspapers are hardly too rich and unlikely too thin, Chairman Sam Zell and Chief Operating Officer Randy Michaels told lenders Thursday that the Chicago Tribune, Los Angeles Times and its other dailies are going on a crash diet.
With the financially strained newspaper industry watching, Tribune Co.’s papers will become radically more slender—critics will say diminished—with about 12.5 percent fewer pages companywide by the end of September, with some papers possibly seeing significantly deeper cuts. Tribune Co. would not disclose the projected cost savings.
And if Tribune Co. newsrooms are to shrink as well, Michaels said, journalists will be held accountable for their productivity.
The heavily leveraged media company’s leaders said selling control of Newsday, its Long Island, N.Y., paper, and the auction for Wrigley Field and the Chicago Cubs ballclub, for which potential bidders will receive the long-awaited financial data within days and submit indications of interest next month, should take care of its big bills due this year and next.
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Tribune Q1 2008 Earnings Call Transcript
Alex Clipper - Banc of America SecuritiesZell's apparently intends to dump some commercial real estate on the market. If America's commercial real estate market mirrors its residential real estate market (unknown to me) his actions will offer an interesting tutorial on selling real estate in a down market.
Okay. In terms of your real estate value, to what extent does the fact that your downsizing the publishing business, is there any sense that you are freeing up some of your real estate to actually be monetized, or is that not a factor?
Samuel Zell
I think the answer is we are a media company. We are not a real estate company. We view all of our real estate to be assets that if better deployable, we should deploy accordingly. We have initiatives going on in Baltimore, Orlando, Chicago, Los Angeles where we have very significant real estate holdings of measurable value, and we are working on and addressing the question of how we maximize those values.
I have no qualms about moving units. We just recently moved our TV station into our newspaper in Fort Lauderdale. We discussed the possibility of moving various pieces in Los Angeles, other places -- this is not a real estate company. In the end, we should have very little of our assets devoted to real estate.
http://poynter.org/forum/view_post.asp?id=13384
Memo to San Jose Mercury News staff
6/6/2008 12:13:26 PM
From: [Mercury News editor] Butler, Dave
Date: Fri, Jun 6, 2008 at 10:58 AM
Subject: Budget update - 6-6-08
Folks:
I’ve had lots of people ask about our budget for the next fiscal year in light of the drastic cuts that Sam Zell is proposing for the Tribune Company newspapers, both in terms of people and newshole. Here’s where we are:
1). We’re still crunching numbers like crazy for the budget year that starts July 1. The tough component – and it’s not mine to do – is to predict where advertising is going to be a year from now. Who knows? We should have this wrapped up in late June. Could it change later? Of course. But from what I’ve seen – and I’ve been in plenty of meetings – every effort is being made to produce an attainable budget while launching all sorts of efforts to find new business as Mac Tully has reported to you on other occasions.
2). We are doing all that we can to limit any newsroom staff reductions to attrition. So far, so good, though I can make no promises.
3). We will likely have some newshole cuts in light of a 15%-plus increase in the price of newsprint for the next year. One thing we’re exploring – as are a number of other MNG newspapers – is to produce “Quick Read” Monday and Tuesday newspapers. As you all know, we’ve been moving down this path for some months and would likely continue to do so, particularly tightening up Monday.
4). We’ll likely have some other nip-and-tuck newshole cuts. Kevin Wendt is reviewing some ideas to see if they are practical and the editors will be discussing them over the next few days.
5). It is CRITICAL that we all work together to reduce the length of stories so we can get in as much information as possible for our readers. It has never been more important than it is today for all reporters and editors to demonstrate their outstanding writing and reporting skills by cramming the same information – or what’s essential for the story — in less space. This is hard. It does not work on every story, but please, please, work harder at making stories – particularly the more “routine” ones — shorter. We want to continue having in-depth work and we will – but we have to be much more disciplined in what merits 25 inches and what merits 5. (We also need to continue to refine our story planning. It is embarrassing to me – as I know it is to you – when we don’t have a strong centerpiece “in the bag” for Page 1 and others clamoring to get on the front. We all need to contribute more in this area.) /CONTINUED
Memo to San Jose Mercury News staff
6/6/2008 12:07:14 PM
6). We need to think about how we can bust up stories and packages and put sidebars or graphics online only as an added bonus for readers. Many newspapers do this better than we do. I’d like Randy Keith to take the lede is raising this issue day after day with people. The world is transitioning to online and this is one way that we can help speed up the process.
7). I suspect you’ll be reading a lot as this Tribune saga unfolds about story production. All I can say about that is I expect everyone to carry his or her appropriate load – and that certainly differs by job, by assignment, by how much online work you’re doing. We all know that. We also know some people are doing less than they could while others are working their butts off. Those who could do more are likely to hear about that from me and the other editors.
8). The rest of the budget – non-payroll – is tight. But, we still will do some training, we still will travel, we still will cover the news as it needs to be covered. As I have asked in the past, please don’t spend a penny if you don’t have to. We have good uses for all of them!
9). We’re about to embark on one of the most important episodes in years – the installation of a new computer system. Those of you who have gone through this know it is a pain at the outset but then winds up to be wonderful once you learn how to use the new system. This newsroom is long overdue to get the latest technology and that is what you are getting. I urge you to jump into this process, to hold down the complaining and focus your energy on learning the new system. It’s tough when you’re putting out the paper on the old system and learning the new system and that’s what we face this summer. But we have an outstanding staff. Lots of smart people. Let’s make this easy rather than hard.
10). And finally, it will soon be 6 months since I joined your team. Once we nail down this budget I want to have a staff meeting where we talk about this past year and some goals for the next year. We should be able to do that in a few weeks. In the meantime, I thank you for your efforts, for the welcome you have given me, and for all of the hard work. You all lost several valued colleagues this past year. My hope is that we won’t lose many this next year. We all know – as I have been saying in my one-on-one sessions – that we can’t control the economy, but we can control the quality and quantity of journalism we do and we simply must focus on producing the most compelling, interesting, lively and relevant newspaper and web site possible.
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