Posted by chicagomedia.org on June 06, 2008 at 10:10:12:
In Reply to: Tribune planning to make papers smaller posted by chicagomedia.org on June 06, 2008 at 10:09:04:
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.
But the cash-flow cushion for Tribune Co.'s interest payments is fast eroding with dramatically declining publishing revenues far steeper than forecast, leading the company to try to "right-size the papers and significantly reduce our costs," according to former radio executive Michaels, in ways he believes won't come at the expense of readers or advertisers.
"This is going to happen quickly," Michaels said.
Zell punctuated Michaels' conference call comments by adding: "I promise you he is underestimating the level of aggressiveness with which we are attacking this whole challenge."
Michaels cited statistics that he said showed the average journalist at the Los Angeles Times (where rumors of imminent cuts run particularly rampant) contributes about one-sixth of the content produced by counterparts at Tribune Co. papers in Baltimore and Hartford, Conn.
"You find out that you can eliminate a fair amount, a fair number of people, without eliminating very much content," he said. Even allowing for investigative reporting and other circumstances "we believe we can save a lot of money and not lose a lot of productivity."
Personnel decisions will be made at the local level, Michaels said, noting those who "work hard [and] produce a lot of content for us" have little to worry about. There was still considerable concern at company papers and elsewhere as word of his remarks spread.
"Whenever somebody who has no background or fundamental understanding of the newspaper business takes over a newspaper company, I worry—and I worry about the Tribune Co.," industry analyst John Morton said.
"There's always a problem with trying to measure journalists' output by quantity when what matters most is quality," he said.
As for the Cubs deal, Zell said "there's never been a better time to market the team or the ballpark" with ticket sales for the first-place team this season already passing the 3 million mark.
Tribune Co., which looks to retain a small stake in the team primarily for tax reasons, will continue to explore a deal with the Illinois Sports Facilities Authority for Wrigley Field, Zell said. "But we do not do it at the expense of unnecessarily delaying any of our other options."
The sale of the Cubs has always been part of Zell's game plan, but making cuts at its newspapers was something he initially said he would resist.
As Tribune Co. phases in the more economical papers, the change will be accompanied by what Michaels described as "a new look and feel in each market, emphasizing what people are telling us they want in the research: charts, graphs, maps, lists."
Michaels said the reduction of pages is driven by a desire to get the ad-to-content ratio to 50-50 companywide. Excluding classified and preprinted ads, that ratio is now roughly 60-40 in favor of news, a Tribune Co. spokesman said.
Even with the reduction "we're still putting out pretty big papers," Michaels said. "The Chicago Tribune is typically an 80-page newspaper. The days that we're 80 pages, The Wall Street Journal is typically 48 pages. Nobody picks up The Wall Street Journal and says: 'Wow, what a lousy paper. I've been ripped off.'
"If we take, for instance, the Los Angeles Times to a 50-50 ratio … the smallest paper, Monday and Tuesday, [would be] 56 pages. That would be substantially larger than that day's Wall Street Journal. We don't think that's a bad value to the consumer. And we think that by doing that, and then by being able to produce less editorial content … we can save a lot of money by producing the right-size newspaper."
A Wall Street Journal spokesman said the Journal actually ranges from 50 pages to 60 pages, averaging about 56. But Michaels' point was clear, albeit not universally embraced.
" 'Less is more' only works in architecture," Morton said. "Whenever I hear 'We can do more and better with less,' my feeling is you ought to run for the hills."
(Rosenthal)