Tribune Sizes Up Job Cuts, Says It's Not Interested in KR

By: E&P Staff Top Tribune Co. executives said Wednesday at the Global Media Conference in New York City that by the end of the year it will have cut 4% of the workforce as part of cost cutbacks. They also said that the company would not be bidding on Knight Ridder.

Chief Executive Officer Dennis FitzSimons said that by year-end the company will have cut its workforce by 900 jobs, with most of the cuts coming in publishing at such places as the Los Angeles Times, Chicago Tribune, and The Sun of Baltimore. (E&P's running tally of newspaper industry job cuts can be found here.)

Scott Smith, president of Tribune Publishing, said, "We are confident that ad revenue will improve in 2006," he said, but he added that the company is looking for greater efficiencies in its newsgathering and processing divisions.

FitzSimons said he expected two of its youth or commuter publications, Red Eye and AmNew York, to be profitable at some point next year.

[Dow Jones reported earlier today that Tribune also expected 4% job cuts next year, which E&P quoted, then deleted. Dow Jones issued a correction this afternoon: "Tribune Co. will not cut 4% of its workforce in 2006. The company will cut a total of 900 jobs in 2005, of which 800 jobs will be in the publishing unit. A story published at 10:29 a.m. EST and updated at 1:25 p.m. Wednesday misstated the figures."]

Year-to-date, Tribune's publishing revenue is flat, while broadcasting is down about 5.5%.

"As a result of cost-cutting, it is expected that both publishing and broadcasting expense will be flat year-over-year in 2006, despite expected higher medical benefits and newsprint prices," FitzSimons said, according to a Dow Jones story.

The focus on cost management will allow the company "to redeploy resources" to areas that will contribute to growth.

"But FitzSimons said Tribune is focusing primarily on internal growth rather than acquisitions, and that cash would more likely be directed to share buybacks than new deals, although the company would continue to look at acquisitions in potentially high-growth areas," the Dow Jones report continued. "FitzSimons said the company has 40 'targeted publications' that are showing solid growth potential."

During the question-and-answer portion of Tribune's presentation, FitzSimons addressed how the company might be affected by the potential sale of Knight Ridder.

"We have been very disciplined in our acquisitions [over the past few years]," FitzSimons said. "At this point, we're not involved in the Knight Ridder discussions."

FitzSimons said in the event of a sale, Tribune would be interested in purchasing Knight Ridder's shares of CareerBuilder, the popular recruitment Web site jointly owned by Knight Ridder, Tribune, and Gannett.

FitzSimons later said he hears that there is a lot of interest in Knight Ridder among private equity investors.

When someone asked FitzSimons what the private equity interest in Knight Ridder meant to Tribune, he replied: "We run our business as tightly as we can. We have the most in-depth journalistic staff to cover local markets. We have no further comment on the private equity situation."