Wednesday, July 9, 2008

Chicago Tribune to cut 80 newsroom positions

|Tribune media columnist

The Chicago Tribune began informing staff Tuesday it will eliminate around 80 of its current 578 newsroom positions by the end of August and reduce the number of pages it publishes by 13 percent to 14 percent each week.

There also will be a reduction of jobs in other Chicago Tribune departments, but that number was not immediately available. A paper spokesman declined comment.

Because some newsroom jobs have been left unfilled in recent months, the actual number of staffers to exit the paper is expected to be between 55 and 58.

"Like many newspapers, we're feeling financial pressures," Hanke Gratteau, the Chicago Tribune's managing editor for news, said.

These reductions are the paper's fourth since late 2005, when its newsroom had around 670 positions. They have been expected since Randy Michaels, chief operating officer of Chicago Tribune parent Tribune Co., said last month in a conference call with lenders that all the company's papers would be cutting staff and the number of pages by mid-September in response to steep declines in publishing revenue so far this year.

These industrywide trends, the result of online advertising revenue growth unable to offset print advertising declines, are resonating in similar fashion at nearly every U.S. newspaper company, including the New York Times and Washington Post.

The Los Angeles Times, Tribune Co.'s largest newspaper, announced last week it planned to reduce the number of pages it publishes each week by 15 percent and eliminate roughly 150 jobs--or about 17 percent--from its newsroom by Labor Day, and had already made progress toward reduction of another 100 positions from its other departments. Coupled with other cuts over the years, the Times' newsroom now is a little more than half the size it was at its peak in the 1990s.

At Tribune Co., industry troubles are compounded by the debt load the company took on late last year in going private, an $8.2 billion transaction engineered by real estate billionaire Sam Zell, who became the company's chairman and chief executive.

There are also major obligations due this year and next. Zell has said this year should be covered through Cablevision Systems Corp.'s $650 million deal to acquire control of Newsday, Tribune Co.'s paper in Long Island, N.Y., as well as through new credit arrangements finalized last week.

Additionally, Tribune Co. reached agreement today to sell its 42.5 percent share of online shopping Web site to partner Gannett Co. for around $22 million.

The anticipated sale of the Chicago Cubs and Wrigley Field is expected to help cover next year's obligation.

Scott C. Smith, the Chicago Tribune's publisher, retired last week, leaving Tribune Co. after more than 30 years. Bob Gremillion, Tribune Co.'s executive vice president for publishing, has assumed oversight of the paper temporarily until Smith's successor is named.

Besides the cutbacks, Tribune Co. papers are all redesigning their formats. The Orlando Sentinel already has introduced its new look and the others, including the Chicago Tribune, will unveil their overhauls by the end of September.

Tribune to cut 80 newsroom jobs


Sam Zell took his first bite out of the Chicago Tribune newsroom Tuesday, disclosing plans to lay off about 15 percent of its staff.

And the bite may be followed by more. Tribune employees said they have heard the reductions in the paper’s 570-person editorial department could total from 150 to 200.

Employees said department heads told them 80 positions will be cut by the end of August. They said the total includes 20 positions that are unfilled.

The timing of the announcement is unusual because an internal Tribune review was not expected to produce recommendations on job cuts until mid-August. Staffers speculate more cuts will come as Tribune editors complete plans for eliminating sections and reducing the space devoted to news and features.

The paper is acting on a mandate from Zell and Randy Michaels, chief operating officer of Tribune Co., to slash expenses in response to declines in advertising and circulation revenue. The industrywide recession is hitting Zell especially hard because he swallowed $13 billion in debt last December when he took control of Tribune Co., converting it from stockholder to employee ownership.

A Tribune spokesman was not immediately available for comment.

Sources said the laid-off workers will receive two weeks’ severance for each year of service. They said managers did not explain whether the layoffs will be decided based on salary levels, productivity, job category or other factors.

The cuts are in line with the job losses announced for other Tribune-owned newspapers. The Los Angeles Times, for example, is losing 17 percent of its news staff, or 150 people.

Others include the Hartford Courant, which has outlined news layoffs involving 25 percent of its staff, and the Baltimore Sun, which is eliminating about 7 percent of jobs across all departments.

Related Blog Posts
More Tribune layoffs coming? Not yet.

Andy Martin launches a campaign to 'Save the Chicago Tribune'

ANDY MARTIN Executive Editor

Martin says that asset stripper Sam Zell is systematically destroying the Chicago Tribune and may be looting the company's assets. Andy suggests Tribune employees have a legal right to protect their savings in the company's ESOP.

Andy Martin asks: can the Chicago Tribune be saved? Can the Tribune Company newspapers in Los Angeles, Hartford (where he used to be a carrier boy), Baltimore, Orlando and Fort Lauderdale be rescued? Can American journalism survive? Martin believes a tragedy is unfolding in Chicago: an ignorant, arrogant, incompetent swindler has gained control of the Tribune Company and is systematically destroying the company's assets, particularly its newspapers.

'The barbarians are not at the gate, they are inside the gate,' says Martin. 'The Chicago Tribune is a great asset; the Los Angeles Times, Hartford Courant, Baltimore Sun and other Tribune newspapers have always been highly professional.

Now an ignoramus has taken over with a 2% down payment and claims he knows more about journalism than the entire newspaper industry. He has decided that what people want is less news, lower quality news, more pretty pictures and less substance. So Zell is cutting news coverage, dumbing down the product and adding more advertising.

Who is going to be left holding the bag? Why Tribune Company employees, of course; they are the majority owners of the post-public company. Zell only has a few hundred million dollars invested in a $13 billion enterprise. He can walk away at any time, leaving the employees with the results of his destructive policies.

'This week I am going to focus on the future of American journalism. Can it be saved? From itself? Through a series of news conferences and performance art we are going to try to get the public to focus on Zell's acts of urban vandalism. Proud, profitable institutions across America are being destroyed by Zell's larceny and infamy.

'There is no surprise that Zell is seeking to ‘strip' the Tribune Company's assets, no doubt with a healthy percentage being placed in his own family's hands. I predicted this over a year ago. Zell has leased his daughter space in the Tribune Tower. Is she paying a market rent? Doubtful. Zell may be stealing from his own employees.

'Zell acts as though he owns the Tribune outright. But he doesn't. The company is now owned by an employee ESOP, or employ stock ownership plan. Zell has an option to purchase a significant share of the company but employees are still the majority owners. Employees are being raped and robbed by Zell and his crew of pirates.

'Newspapers are undeniably facing a challenge. Marginal companies such as Knight-Ridder have been absorbed. But newspaper managements are largely the architects of their own demise. If you check what the Tribune charges for a classified ad, they want hundreds of dollars for something that others are giving away.

The choice is no longer between a reasonably priced Tribune ad and a competitor, but between an outrageously overpriced Tribune classified ad and competitors offering similar products at lower prices. Right across the newspaper industry classified advertising rates have become a delusional operation in which papers are forfeiting revenue because they still charge monopoly prices for a competitive product.

'Long after their monopolies have dissolved, newspaper managers continue to believe they are entitled to a monopoly rate of return. That is no longer the case. Newspaper media dominance is dissolving.

'What solution do newspaper managements and asset strippers such as Zell propose? They constantly cut staff, cut the quality of the news they are providing, and cry about poor results when papers are still stuffed with ads. At a time when they should be rebuilding they are destroying. How long before Zell ‘discovers' readers don't want foreign news, and fires the Tribune's foreign correspondents? Not long I suspect. Zell makes all kinds of ‘discoveries,' and all of them are designed to cheapen his product and chase readers away.

'Today we launch a campaign to alert the good citizens of Chicago to the threat facing their media. I may not like the odd Trib employee but I have no hesitation in declaring that the company's newspapers are outstanding products. Now that Gerald Spector, the quality-cutter-in-chief, has demanded that Tribune employees cut back on paper and paper clips, the time is right to sound the alarm. Spector's actions are ridiculous, a parody of a Gilbert & Sullivan operetta. His save-the-clips memo is cut straight from Dilbert.

'I am launching ‘Save the Chicago Tribune, Stop Sam Zell' week. We kick off the campaign with Tuesday's news conference, and Wednesday and Thursday's performance art.

'What's the bottom line? If Zell is not stopped, the Tribune Company's newspapers are gong to be destroyed. The destruction will not be long in coming. The public will abandon the deracinated remnants of Tribune products. Ironically, by virtue of his destruction Zell will claim a new mandate to keep cutting until the Tribune suspends publication or goes bankrupt.

'Reports that Zell is now using receivables financing are a warning sign of impending bankruptcy. Zell's ‘asset-backed commercial paper' borrowing confirms in my mind that he is driving the company into the grave. His receivables ‘factoring' is recourse to a desperate form of borrowing that is usually a refuge for endangered enterprises.

'There is a world of difference between redirecting a strong institution facing temporary challenges and stripping a moribund enterprise. Zell is treating the Tribune Company as dead meat. His actions will ensure its demise. But that's what the old buzzard has done his whole life, eat what he kills. He obviously knows nothing about journalism. Journ students take notice: journalism schools are an endangered species if Zell succeeds. Northwestern University's decision to rename its journ school may be a harbinger.

'Mr. Zell and his confederates may yet get their comeuppance. He is still a fiduciary. He owes the shareholders-his own employees-a fiduciary duty. He owes his employees, whose own lifetime savings are the bulk of the company's capital, a fiduciary duty not to slash away at a successful company. The fiduciary duty he owes his employees is a legal duty, one that is enforceable by his employees in a court of law. He can be prevented from stripping away the company's assets and transferring them to his own wolf pack of real estate speculators.

'Right now I am fighting this campaign alone. But Tribune employees need to wake up. The stench emanating for Zell's abattoir is overwhelming. He has brought with him a bunch of small bore asset strippers to dismember the Tribune company. The Trib is a complex communications conglomerate that needed more focused management. But the company will surely perish from the depredations of Zell and his predators.

'In my characteristic way, composed partly of legal arguments and plenty of tongue-in-cheek activity, maybe more cheek and less tongue, I am focusing attention on Zell's vandalism of the Chicago Tribune and, by implication, on the endangered future of American journalism. If Zell is not stopped, and if incompetent newspaper management is not replaced, the bell will toll for the First Amendment; newspapers and journalism as we know them will cease to exist' Martin says.

No comments: