Tribune Publishing reports Q1 loss as pressure grows to accept offer from Gannett
The publisher of the Los Angeles Times and Chicago Tribune reported a $6.5 million loss in the first quarter of the year, and revenues, while flat, were actually down when the new revenue from the San Diego Union Tribune is excluded
As investor groups begin to apply pressure on Tribune Publishing to accept Gannett’s offer to acquire the publishing of the Los Angeles Times and Chicago Tribune, Tribune Publishing has to go through the motions of announcing its quarterly earnings.
That earnings report showed that despite adding a major daily newspaper to its portfolio, the San Diego Union Tribune, revenue came in at $398 million, even with prior-year quarter. For the first quarter of 2016, the publisher reported a $6.5 million loss as the company took a pre-tax $8 million EVSP charge and $14 million of restructuring and transaction costs
Total revenues excluding the Union-Tribune were $368.7 million, which means the existing titles saw their revenue fall about 7.4 percent.
“Our results for the first quarter were in line with our expectations driven by good momentum in digital and increased circulation revenue offset by a decline in advertising revenue,” new company CEO Justin Dearborn said in the earnings announcement. “We are at the very early stages of executing our clear plan to transform Tribune Publishing by increasing monetization of our important brands, capitalizing on the global potential of the LA Times, and significantly accelerating our conversion of content to revenue through an enhanced digital strategy. As we execute our plan, we are confident in our ability to deliver value for our shareholders.”
Earlier this week it was reported that Oaktree Capital Group LLC, the second largest shareholder in Tribune Publishing, thinks the company should accept Gannett’s $815 million deal. Financial websites such as The Street rationalized the idea, saying Gannett’s notorious cost cutting might even be just the thing Tribune needs.
“It’s been convenient for a lot of journalists to piss on Gannett and a whole bunch of other chains that bought up smaller newspapers because, quite frankly, we were snooty about it,” said former Chicago Tribune reporter Charles Madigan told The Street. “But my attitude has changed because these people [Gannett] have a commitment to doing journalism. They’re still covering communities and presenting readers with news options, and that’s much more important than how they run it.”
But no mention of Gannett’s offer was to be found in the earnings statement, though investors are sure to want to ask a few questions on this subject during the company’s earnings conference call.