Tuesday, November 11, 2008

Losses Mount for Tribune

Here's the continuing bad news on Tribune's financials:

For the third quarter, operating profit crashed 83 percent to $37 million on operating revenue that fell nearly 11 percent to $1.04 billion. Total third quarter net loss was $122 million.

So far this year, Tribune has posted $2.83 billion in net losses, versus a profit of $166 million for the same period last year. In fact, its operating revenue for the nine months is $3.15 billion, down 8 percent -- and just slightly larger than its net loss.

On the publishing front, the numbers are startling, with an operating loss of $3.75 billion. Cash flow has sunk 53 percent to $205 million, while operating revenue is down nearly 12 percent to $2.07 billion.

Tribune is staying ahead of its creditors by selling off chunks of the company. In the third quarter it sold a 10 percent stake in Career Builder for $135 million, using the after-tax proceeds to pay down debt. Earlier this year, it finalized the sale of Newsday, allowing it to pay off debt. Still, interest expense ballooned 32.5 percent to $232 million in the third quarter.

Tribune has wiped off nearly $4 billion in good will from its books this year, equal to half the company's purchase price in 2007. It's clear that Tribune is cleaning house, wiping off all kinds of good will related to its various subsidiaries, as well as discontinuing operations of other units. That means -- maybe, sort of, cross your fingers and hope -- Tribune is worth roughly $4 billion. Very likely it is worth less. Only future financial statements will tell.

Staff reductions are costing Tribune a bundle, about $115 million thus far this year in severance. Of that, $85 million is from publishing. The company may not see positive financial results from this and other moves until next year. But if the economy continues its downward trajectory ...

These are just some of the financial highlights. For more info, go to www.tribune.com/pressroom/releases/2008. In fact, skip the press release and go straight to the tables.

Sunday, November 9, 2008

It's a Small World After All

The news world is getting smaller and smaller, folks.

Buried in last week's avalanche of election news was this little nugget: The St. Pete Times and the Miami Herald will merge their Tallahassee bureaus in December to "provide a new level of depth of coverage" of Florida's capital.

I understand that this move will save the two papers money in these tight financial and circulation times. This is especially true for McClatchy, owner of the Miami Herald, which is weighed down by enormous debt from its merger with Knight Ridder.

But the reader is not necessarily well served by the merger of these capital bureaus or any news partnership among and between former newspaper rivals.

When two competing papers merge their operations, competition is reduced. It's as simple as that. Instead of having two papers competing for good stories for their readers, you will have one. No matter how good the stories may turn out to be for the merged bureaus, a loss of coverage has occurred. The number of newspaper voices has been diminished. This is not a good thing, but apparently it is an increasingly popular thing to do.

The Dallas Morning News and the Fort Worth Star-Telegram are also considering a partnership. I lived in Dallas many years ago, when the Dallas Times-Herald was still in circulation. The Times-Herald was a scappy paper with a lot of heart. It beat the pants off the Morning News plenty of days. The death of the Times-Herald didn't improve coverage in Dallas, but it sure enriched the News' parent company Belo Corp.

And if you recall, earlier this year the Herald, Sun-Sentinel and PB Post announced they would combine resources to cover certain stories in South Florida.

As these mergers or partnerships continue, readers can look forward to ever shrinking sources of news.

Kudos for Post Election Cover

I thought the Sentinel had an elegant cover the day after the general election. I'm referring to the one with the portrait of Obama on the cover. Very elegant and understated, much like the man himself.

I also bought a paper that showed Obama on the stage at Grant Park with his daughters; the headline stated, "This Is Your Victory." Photo was poor. I don't think it was as effective as the portrait of Obama.

If you browsed the front pages at the Newseum, the Obama portrait stood out in a sea of sameness (including headlines; not a whole lot of originality there). So, kudos for this cover.

Meanwhile, Tribune put out a press release touting the demand for the post-election paper. Noticed the Orlando Sentinel expected the least demand of all the major papers, about 12,000 additional copies printed. Perhaps this is a reflection of Central Florida's GOP-dominated politics. If not, I'm afraid to say it may be a reflection of the continuing decline in readers.

Here are the numbers, as reported by Tribune. Bear in mind the figures may have changed since they were originally reported November 5.

Orlando Sentinel and South Florida Sun-Sentinel each printed an additional 12,000 copies. Not too impressive for a battleground state, and puzzling for the much sought after I-4 corridor that turned blue. (Broward County was already blue.)

The Chicago Tribune printed and expected to sell an additional 200,000 copies.

The Los Angeles Times expected to sell more than 100,000 copies.

The Baltimore Sun doubled its normal press run whatever that is.

The Hartford Courant printed an additional 15,000 copies.