By Mick Gregory
It finally happened, for the past several months the Tribune Co. has had to put their once mighty chain up for bid. Rather than try and develop their Web/print empire and manage the media company, they gave in to the Chandler family’s need to sell out. The Chandlers have been behind the wave of shuttered big city newspapers across the nation for the past 20 years, including: The Dallas Times Herald, Houston Post, and the terminal Denver Post and Baltimore Sun. Now, with real estate flipper, Sam Zell taking the Tribune Co. private, the future of the LA Times is ashen.
Instead of innovative media management, the editor-centric and rich, spoiled relatives of the former publishers sell the assets like the decedents of 19th century railroad barons.
Tribune was particularly egregious. This company never did anything Web-wise, with management endlessly thinking that its stock was undervalued. It was clearly overvalued, and now the upside is totally capped. The little amount that Sam Zell is putting up to take this company private shows how little these companies are really worth.
All of these companies seem to be run, frankly, by jokers or dreamers who had no idea how to deploy capital. The only explanation I can think of is that they were run by people who are up from the newspaper side or are heirs to the founders and had no idea what they were doing financially. Dow Jones (DJ – commentary – Cramer’s Take – Rating) was like that for years, and it is finally being run in an intelligent financial way. Probably too late, though.
These are diminishing assets. They don’t need to exist. Younger people rarely read them. And the companies acted like they would always be in demand and were simply misunderstood by Wall Street. Nope, Wall Street got it the whole time, except a couple of hedge and mutual funds that are trapped and trying to get managements to do something to bring out value.
The result? The Philadelphia Inquirer gets wrecked. The Times boosts the dividend well beyond its means. And now the Tribune sets the stage for a massive downsizing, massive firings and the inclusion of tons of Associated Press copy.
—Larry Cramer of TheStreet.
The Denver Post and JOA partner with the Rocky Mountain News, filed the joint agency’s financial statements with the Securities and Exchange Commission on Monday.
They show total revenue at the agency dropped 5.3 percent in 2006 to $409 million, compared with $431.7 million in 2005. Revenue was essentially flat from 2004 to 2005.
Advertising revenue dropped 7.1 percent from 2005 to 2006’s $339.5 million.
Net income fell from $71.1 million in 2004 to $47.2 million in 2005 and $18.5 million in 2006.
More layoffs are just around the corner.
Business writers should follow the Chandlers’ investments after they receive the windfall from the Zell buyout. That would be “impact journalism.”