Tribune Faces Hundreds of Cuts as Vulture Capital Moves In
Tribune Publishing Co. (NASDAQ: TPCO), owner of some of America’s oldest and most storied newspapers, faces a takeover by a company that has routinely stripped the properties it owns to the bone. Hundreds of jobs likely will be eliminated if the transaction closes.
Odds are high that Alden Capital will buy the shares of Tribune it does not already own. The vulture capital firm already has 32%. It has offered $14.25 a share. The stock moved slightly above that level after the announcement. Several industry analysts believe the final price will be $17.
Alden also controls MediaNews Group, which owns over 50 papers, including the Denver Post, San Jose Mercury News and Orange County Register. It has cut hundreds of jobs across these properties in the past four years. Tribune owns the Chicago Tribune, New York Daily News, Baltimore Sun, Hartford Courant, South Florida’s Sun Sentinel and Orlando Sentinel, Virginia’s Daily Press and Virginian-Pilot, and the Morning Call of Lehigh Valley, Pennsylvania. Tribune has slightly fewer than 5,000 employees.
Alden, according to an analysis by media industry expert Ken Doctor, recently has been more profitable than its peers largely because it has cuts costs at a more rapid pace than revenue has declined. The newspaper industry has hemorrhaged money since before the Great Recession as people increasingly began to consume news online. The collapse of the economy accelerated that. After a brief respite of slower revenue drops as the economy recovered over the past decade, the COVID-19 pandemic deeply scarred the industry again.
Most newspaper companies, with the exception of Dow Jones, New York Times and Washington Post, have not been able to offset attrition in print circulation, print ad revenue and lackluster online ad revenue with paid online subscriptions. That has made industry cost cuts, outside of these three companies, unavoidable.
Tribune already has indicated that 2021 will be a very difficult year. Revenue is expected to drop from a range of $745 million to $746 million range last year to $675 million to $690 million in 2021. The forecast excludes the sales of BestReviews property.
Alden certainly plans to increase margins at Tribune as quickly as possible. It is part of their regular game plan. Hundreds of jobs are at stake. And they almost certainly will be lost.
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