More On Tribune

Posted by: Jon Fine on June 08, 2006

One of the weirdest spectacles of the media world circa right-now is the way Tribune is twisting, twisting in the wind, beset by terrible stock performance and board tumult.

It’s actually within the realm of possibility now that Tribune, long just about the steadiest media play around, will be broken up or shrink significantly, assuming the notion of spinning off broadcast wins traction. (In which case, by the way, Tribune becomes an almost pure-play newspaper company with properties concentrated in big markets. Knight Ridder could tell you how well that goes these days, or they could if there still was a Knight Ridder. UPDATE 6/9: Or they could just take the newspapers private.)

I wrote about some of this in this week’s BusinessWeek, but some additional points:

—Tribune’s long been perceived as being well-managed. But it’s not hard to find doubters, and the doubters have a point. They point to:

A. Tribune’s never having been good at inventing, only at managing in a very traditional, bottom-line way. (Not that they’re the only guys in the world like this.)

B. Tribune’s entire history with the New York Daily News. Tribune managed the feat of losing money with the largest-circulation newspaper in the country. It also made many strategic blunders while doing so. Among them: It stopped running classifieds for decades, allowing the Times to take a commanding lead; it made many ill-conceived attempts to go suburban or upscale; and, most disastrously, when the unions struck in 1990, it made the mistake of thinking they could print, distribute and sell a scab paper in the most heavily-unionized city in the US. (And the Daily News, by the way, was the outta-borough blue-collar read in New York City and thus had a heavily-unionized readership.) And, before that strike, Tribune managed to scare off at least two serious takers for the paper. (For this section, I am extremely indebted to Sheryl Fragin’s excellent article in the June 1991 issue of NewsInc., “Legacy Lost.”

—In retrospect, it was a bunch of TV acquisitions that vaulted them to darling status in the mid-Nineties. Those deals diversified revenues, and the deals worked. The purchase of Times Mirror in 2000 swung the company decisively towards newspapers. Tribune gets 73% of its revenue from newspapers—before the deal, it got around 55% from newspapers—and we all know how highly Wall Street thinks of newspapers these days.

—For what it’s worth, I remain convinced that assets like Los Angeles Times and Chicago Tribune have value that far exceeds what Wall Street says they’re worth. They are big, leading brands in big, vibrant markets. Someone has to figure out how to make them work. And someone needs to figure out how to stop the L.A. Times’ revenue sluggishness.

But these days, I’m not sure Tribune are the guys who will.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/

Reader Comments

James de Rin

June 10, 2006 03:00 AM

Having worked for Pasadena Star News and as a internet reader of the LA Times I think the newspaper world needs a Steve jobs. Apple was practically bankrupt when it beat Sony at its own game, namely the Walkman, I mean the IPOD. What publishing needs is a new approach to content like the IPod. Perhaps there is only one good song on a CD or one good article in a paper. But for the size and diversity of Los Angeles it is the LA Weekly rumored to have been bought by The LA Times last Friday that gave the LA Times a run for its money. We publish a local paper in Highland Park, Los Angeles and our readers are multi-ethnic, rich and poor, educated and uneducated, business savy and not, family and single. I would describe the population and readership as completely different from the target group of big media, but this is the new LA! David Geffen might buy the LA Times and reinvent it, right now its tired and losing readership but then young people don't read newspapers, but they do listen to IPODs!

James de Rin
www.uncutreport.com

Don

June 16, 2006 02:01 PM

See the question on a lot of people's minds is:

Are blogs already the new iPod and is big business powerless to capitalize on them?

Don

Post a comment

 

About

The media, entertainment and marketing worlds continue to shapeshift on a near-daily basis, as new forms arise and old assumptions erode. Where is it all going? No one really knows. But on this blog BusinessWeek’s media writers Tom Lowry and Ron Grover promise to provide ample helpings of scoop, provocation, and sharp analysis as they track and annotate this constantly changing terrain.

Categories

 

BW Mall - Sponsored Links

Buy a link now!