Tribune Publishing reports its Q2 ad revenue down sharply, despite addition of San Diego paper
Second quarter ad revenue came in at $226 million, down 6.9 percent from last year, but down over 10 percent without the acquisition of The San Diego Union-Tribune
The publisher of the Los Angeles Times, Chicago Tribune and other newspapers reported its second quarter earnings before the bell this morning, and the report has to be of concern as the company reported that ad revenue fell almost 7 percent, even when considering the addition of its acquisition of the leading newspaper in San Diego.
Second quarter advertising revenue came in at $226 million, down 6.9 percent from the prior-year quarter, and down 10.5 percent when advertising revenues from the acquisition of The San Diego Union-Tribune is excluded. Total digital revenues grew 3.7 percent to $52 million.
Net income was $3.398 million, versus $15.203 in the same quarter last year. For the first six months of the year, net income is at $5.913 million versus $26.975 million last year.
To improve earnings the company is focusing on cost reductions.
“We continued to make progress on our five-point transformation plan in the second quarter of 2015,” Tribune Publishing’s CEO Jack Griffin said. “Our Adjusted EBITDA results for the period reflect significant cost-management initiatives, which we plan to continue in the second half of the year, and strong revenue diversification efforts, with meaningful growth in our Digital Marketing Services and Content Syndication businesses.”
Tribune Publishing was spun-off of The Tribune Company last year and was saddled with $350 million in debt. Despite this, the paper has signed a number of deals including one to acquire local Chicagoland newspapers, as well as the deal for the San Diego property, raising its long term debt.
Personnel-wise, in May the company announced the hiring of former New York Times executive Denise Warren to direct Tribune Publishing’s digital strategy and operations.
“In the last 30 days, I have begun an in-depth top to bottom review of our digital consumer business,” Warren said on today’s earnings conference call. “We set an expeditious deadline of the fourth quarter for this comprehensive evaluation, and from there we will immediately begin to implement a plan to realize the opportunities.”
In the call Warren also said the company is looking at developing new products that will “over time, can reduce our reliance on third party classified advertising revenue. Developing these new solutions will take time. But we must, as an organization, begin to think about them now.”
Warren said the company plans to take a mobile-first approach to new product development and marketing.
In another personnel more, Tribune Publishing earlier this year named a replacement for outgoing CFO John Bode, who left soon after the spin-off was completed, naming Sandra J. Martin to the post. Martin had previously been CVP/Controller at Belo.
Last month Tribune Interactive launched a new digital edition app for entertainment special sections of the Los Angeles Times, LA Times Special – Entertainment (see TNM report here on the app, as well as updates to several newspaper news apps).
Tribune Publishing has a very attractive portfolio of newspapers. In addition to those already mentioned here, the company publishes The Baltimore Sun Media Group, the Hartford Courant and Orlando Sentinel. The company will need to control costs while growing its digital media efforts to maintain profitability. It may also need to look for expansion outside of the newspaper industry. Newspapers got into broadcast, after all, claiming that a more diversified portfolio of media products would guard against downturns in the newspaper business and the economy, in general. They were right. But now many media companies are shedding their print products to become broadcast and digital media companies, leaving their print properties to fend for themselves. Well, maybe its time to turn the tables, right?
Here is the summary from the earnings statement: