LA WATCHDOG--The recent firing of Austin Beutner as the Publisher of our Los Angeles Times and the San Diego Union-Tribune is nothing but a boardroom brawl as Jack Griffin, the multimillion dollar a year Chief Executive Officer of Chicago based Tribune Publishing, seeks to retain control over this highly leveraged newspaper company.
Beutner’s exit was precipitated by an offer by billionaire Eli Broad to purchase the Los Angeles Times and San Diego Union-Tribune with the intent of assuring civic journalism through increased local participation in the ownership of the papers.
While terms of the offer have not been disclosed, it was probably in the range of $300 million based on the value of Tribune’s common stock, its debt load and unfunded pension liabilities, and its operating profit. It also assumes that the Times represents a third of the Tribune’s business and that the value of the Union-Tribune is equal to the May purchase price of $85 million.
This offer was summarily rejected by the Tribune Publishing Board of Directors without analyzing its economics because the management believed that there were adverse tax consequences. The Board and the entrenched management also elected not to pursue any discussions even though the cash from a tax efficient sale or spinoff of the two newspapers would have allowed the beleaguered company to retire or offload a significant portion of its long term debt and unfunded pension liabilities.
Griffin subsequently canned Beutner as he represented a threat to his control because of his close relationship with Broad.
This will also allow Tribune Publishing to pursue its cost cutting strategy as Griffin and the new publisher, Tribune veteran Tim Ryan, are rumored to be planning a demoralizing 15% to 20% reduction in the staff of the Times newsroom that will save $10 million.
But this cost cutting to prosperity strategy is not viable in the long term and is not in the best interests of the Los Angeles Times, the newsroom, the County, and our City as we do not want a paper that is best used to wrap fish or to line the bottom of our birdcages.
Rather, we need local ownership which is willing to accept a lower rate of return for high quality journalism, increased civic engagement and awareness, and a dedicated newsroom that will serve as a watchdog over the City, our Department of Water and Power, the County, and the State.
An independent Times and Union-Tribune will also not be burdened by Chicago’s stifling bureaucracy and corporate overhead and its inability to understand the culture of Los Angeles and the rest of Southern California. The Times will also be free to develop a more tech savvy organization that is able to leverage its proximity to Silicon Beach and Silicon Valley into a vibrant digital organization that is attractive to advertisers.
But what can we do? Plenty!
By signing the Free Our Los Angeles Times petition, we will encourage Eli Broad and other civic minded Angelenos to pursue the purchase or spinoff of the Times and Union-Tribune from Tribune Publishing.
It will also send a message to Tribune Publishing’s largest shareholders that we are not happy campers and may well decide not to support the Times and Union-Tribune. This will cause these institutional shareholders to protect their investment by encouraging management to implement a transaction. The three largest shareholders, Los Angeles based Oaktree Capital, Pasadena based Primecap Management, and JP Morgan, control over 40% of the stock.
It may also cause movers and shakers in Chicago, Baltimore, Hartford, Orlando, and other cities where Tribune has newspapers to rattle the cage of Tribune Publishing’s management and directors.
Sign our petition and send it to your friends and contacts.
This is Our Los Angeles Times that is dependent on our support and cash.
Petition – Free Our Los Angeles Times
The City and County of Los Angeles deserve a newspaper of record that, in the words of Austin Beutner, is its “civic conscience which holds accountable those with power, helps celebrate what is good in our community, and provides news and information to help us better understand and engage with the world around us.”
Our Los Angeles Times must continue to reengage the Southern California community by investing in high quality content, award winning journalism, and new technologies. It can no longer live with the “cost cutting to prosperity” strategy of its owner, the highly leveraged Chicago based Tribune Publishing Company.
To achieve the goal of a vibrant, engaged, and civic oriented LA Times, we call on Tribune Publishing Company and its major shareholders to spinoff our Los Angeles Times into a separate, locally controlled company and to reinstate Austin Beutner as Publisher.
The Tribune Publishing is a newspaper publishing company. In addition to the Los Angeles Times and the San Diego Union-Tribune, it owns seven other daily newspapers around the country: the Chicago Tribune, Baltimore Sun, Hartford Courant, Orlando Sentinel, Sun Sentinel (South Florida), Daily Press (Newport News, VA), and The Morning Call (Allentown, PA). Revenues are approximately $1.7 billion while operating profits have declined by over 40% to around $150 million, or about 9% of revenues. The market value of the company is around $275 million, down over 50% in the last year, while its debt and unfunded pension liabilities exceed $500 million.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
Vol 13 Issue 75
Pub: Sep 15, 2015