Turning attention to the other Chicago daily newspaper for a moment,
the latest report on Tribune Company's financial health is all kind of discouraging. A few months after emerging from bankruptcy, the publisher of Chicago Tribune, has been making profit, but it's less profit than it used to make while it was actually bankrupt.
At this point, nobody would be terribly surprised that the company's newspaper earnings fell. Classified ad earnings fell by 7%, retail advertising fell by 7% and advertising from nation-wide companies fell by 13%. Given that the national chains bring in more money then local businesses, that last number is especially disappointing.
And it's not just the revenue from ads in actual, physical newspapers that's declining. Online ad revenue fell by 2%. That's actually a pretty troubling sign. The print advertising revenues have been declining for years, and newspapers have been hoping that if they invest in their digital side, the online ads will make up for the shortfall. It was always a bit of a dubious proposition - online ads bring in less money then print ads, and ad blocking software undercuts even that. But the fact that online revenue is declining as well puts Tribune's newspaper division in a tough position.
As if that wasn't bad enough, the company's radio and television stations have been losing profit as well. Revenue dropped by 4% - less than newspaper revenue, but it's still a drop. Up until this point, the conventional wisdom has been that, while newspaper side of the company has been struggling, the broadcasting side has been doing pretty well. It's why Tribune company is seriously thinking of selling off its newspapers and focus on the part that's more likely to make money. If the revenue declines on the broadcast side continue...
Keep in mind that Tribune company is currently owned by its former creditors (hedge funds Oaktree Capital and Angelo, Gordon & Co, and JPMorgan Chase & Co, among others). To make a long story short, they own the company because, as part of the bankruptcy proceedings, they got most of Tribune's stocks. They don't want to own a media company forever - they want to sell it off for a tidy profit, the sooner, the better. The newspapers would be sold sold off first, but the TV and radio stations would be sold as well, sooner or later - either in one package or separately.
Tribune newspapers are still making profit. The TV and radio stations are still making profit. But what the current owners see is a bundle of assets that's losing its value. Last thing they want is to be stuck with something they wouldn't be able to make any money off of when it comes time to sell. So they're going to do everything they can to stop the decline in value. Which means newspapers, TV and radio stations are going to start cutting jobs.
In fact, Los Angeles Times, the most profitable newspaper Tribune Company owns, has already announced that it's firing 11 people.
And Tribune Company is probably going to be looking to sell its newspapers even faster than it has before. So the prospect of Tribune company
no longer owning the newspaper where it started from in the first place may become a reality sooner rather than later.
Whatever may happen, things don't look promising for Tribune Co right now.