Nov. 20--Tribune Co. announced a restructuring of its publishing business Wednesday to focus on its digital efforts and streamline operations, resulting in nearly 700 job losses across the Chicago Tribune, Los Angeles Times and six other daily newspapers.
The plan, which was outlined for Tribune Co. employees in a memo, seeks to integrate business units such as advertising, marketing, manufacturing and digital media under common leadership. It is aimed at offsetting annual publishing revenue declines of $75 million to $100 million, without diminishing editorial content, according to executives.
But publishing staff positions, accounting for about 6 percent of Tribune Co.'s workforce, will be eliminated beginning Wednesday, and the impact of those cuts remains to be seen.
"Unfortunately, organizing around functional lines rather than maintain what we're doing locally, there is going to be some staff reductions," said Peter Liguori, president and CEO of Tribune Co., the Chicago-based media company. "We are not going to be reducing any of our frontline reporters. Over time there will be some small reductions on the editorial side, but we want to maintain our best-in-class local journalism."
Under the publishing realignment, which goes into effect Jan. 1, the company plans to "invest more concertedly" in digital growth, according to Liguori. He announced that Tribune Publishing's digital unit will be headed up by Bill Adee, who currently serves as senior vice president of digital development and operations at the Chicago Tribune.
"Along with this organizational change, there is going to be a further strategic change in direction, which is digital," Liguori said. "We're going to have to redeploy some of our capital, not only to meet our readers' current needs, but we're going to have to anticipate the future needs and products of newspaper readership down the road."
In a separate memo sent jointly by Los Angeles Times Publisher Eddy Hartenstein and Tribune Publishing CEO Tony Hunter, a number of other Tribune Publishing unit leaders were named, drawing from senior management at both the Los Angeles Times and Chicago Tribune. But a CEO for Tribune Publishing, which is preparing to spin off as a separate company, has yet to be named, according to executives.
"The new operational plan is going to change the company into one company with eight locations, as opposed to how we operate now which is eight individual and separate businesses," Liguori said.
Chicago-based Tribune Co. emerged from a four-year stay in Chapter 11 bankruptcy on December 31. The company owns 23 television stations including WGN-Ch. 9; national cable channel WGN America; WGN-AM 720; eight daily newspapers and other media assets.
Tribune Co. has been exploring the possible divestiture of its newspapers since February. In July, it announced plans to spin off its publishing division into a separate company. A Form 10 registration report will be filed with the Securities and Exchange Commission by year's end, and the spinoff is expected to take place three to six months after that, according to executives.
While the publishing division continues to operate in the black, advertising revenues declined by $84 million last year, a trend which shows no sign of slowing. Publishing ad revenues are down $62 million or 8 percent, through the first nine months this year. For that period, the publishing unit generated an operating profit of $151 million.
The publishing division has reduced its expenses by 13 percent through the first nine months of the year, with much of the savings coming from lower compensation costs. About 340 publishing positions were eliminated through September, according to Tribune financial statements.
Tribune Co. eliminated about 800 publishing positions last year.
Liguori said the restructuring plan will offset projected revenue shortfalls in 2014 and beyond, enabling the publishing company to devote resources and adapt to its long-term digital future.
"This change in organization and operation clearly addresses it, gets ahead of it and gives us the best possibility to create runway to create our new future," Liguori said
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Distributed by MCT Information Services
Original headline: Tribune Co. reorganizes publishing unit, cutting nearly 700 jobs
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