By: Jennifer Saba Merrill Lynch issued a report Thursday that speculates that the Tribune Co.'s recent staff reductions are due partly to new projects. The investment firm noted that the company had expected its latest products -- such as Hoy and Red Eye -- to generate 1% of revenue growth. "That has not been the case," the report said. "In retrospect, they ended the year with overly ambitious investment plans and that the recovery has only been a touch more muted than expected."
Tribune announced earlier this week that about 200 staff positions would be eliminated. Gary Weitman, vice president of communications at the Tribune Co., reiterated to E&P late Thursday that the impending cuts are "unrelated to new products" and that the action was necessary due to a "slow down in advertising."
Merrill Lynch also noted that many newspaper investors are "holding their breath" as May ad lineage reports start to roll in, led by the Tribune Co.'s May numbers which were weak in regards to retail advertising.
As for the industry, this week the newspaper group fell below the S&P 500, which was up 0.6%, while the newspaper group was at 0.4%.
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