Michael Ferro Cleans The House That Jack (Griffin) Built
Some of Jack Griffin’s top executive hires will soon follow him out the door at Tribune Publishing. Griffin’s ouster, which I was able to break the news of one week ago (“Jack Griffin Out at Tribune”), turns out to be just the beginning of new Tribune Chairman Michael Ferro’s housecleaning.
Confidential sources tell me one or more of the corporate executives Griffin hired to transform Tribune Publishing will lose their jobs, and that changes in the configuration of publishers running Tribune’s nine metro properties are on tap, too.
The news is expected to be announced Wednesday, coincident with Tribune Publishing’s year-end and fourth-quarter earnings call with financial analysts.
Griffin had brought in top talent from the New York Times and Dow Jones, including Times executives Denise Warren, Mark Campbell, Rajiv Pant and Mohit Pandey and former Dow Jones Chief Revenue Officer Michael Rooney, all based in New York City.
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My sources tell me Ferro wants to concentrate management in Tribune’s two flagship cities, Chicago and Los Angeles, and the combination of that thinking and a broader strategic rethink lead to this week’s changes.
Tribune Publishing declined to comment on the in-process executive changes, as did a number of the executives noted.
Under the new regime, Ferro may reallocate and/or consolidate publisher responsibilities. In the current structure, Denise Warren, in addition to heading up the digital business, has had East Coast publishers reporting to her — that those running the six metro papers’ outside of Chicago and California. If Warren departs, Ferro will have to make changes in that reporting structure.
It is, though, in Los Angeles that Tribune may make its biggest change. The likelihood: a first-of-its-kind
combined publisher-and-editor role for Los Angeles Times editor Davan Maharaj.
Acute observers will note that the Chicago Sun-Times, whose ownership group still includes Ferro, appointed Jim Kirk to the publisher’s job, in addition to his role as editor, in 2013.
Such a move would certainly save expense, and one observer hopes will offer one benefit: “Davan does understand the Internet.” Further, it could, optimistically, signal the importance of content to the next stage of the business.
I had noted buzz about the possibility of Maharaj gaining additional responsibilities last week, and this week the talk of it has circulated through the newsroom. In fact, it’s been conflated with a controversy caused by Maharaj’s allocation of Oscar reporting credentials to the Tribune’s new executives ( “Oscar spotlight a dim one for hometown L.A. Times”).
If Maharaj takes on Times publishing duties, he would likely by extension take on responsibility for the now-sister San Diego Union-Tribune. Further, if Tribune is successful at buying the Orange County Register and Riverside Press-Enterprise out of auction this month, he would become the business head of the biggest monopoly newspaper company in the country, serving an area of more than 20 million residents.
That would mean Tribune’s southern California newspapers – representing half of its revenues – would be run by someone without business-side experience. Maharaj would presumably report to new CEO Justin Dearborn, who, similarly, comes into the job with no media management experience.
If Maharaj is named to such a post, would current Times publisher Tim Ryan — put in place by Jack Griffin when he fired Austin Beutner in September – leave the company? Sources talk about that possibility, as well as a “reorganization” of responsibilities that could mean other Tribune employment for Ryan and others, affected by the management moves. Expect further reorganization at the Chicago Tribune as well.
Maharaj, who declined comment for this story, is a 26-year Times veteran. He has endured much company change. He took the job during the Tribune’s troubled bankruptcy in December, 2011. The corporate split, continuous downsizing and the need to transform the newsroom for digital publishing have all greatly complicated his tenure.
He has not been among the most popular Times editors, numerous newsroom sources confirm to me. Near-universally, those who know him use these two words in describing his best skill: “managing up.”
While given great credit for that ability — a critical skill given the continuous chaos of management above him — some of my sources complain that his “political skills” have fostered an atmosphere of “favoritism” and indecision, and account for the continuing lack of diversity on the newsroom’s masthead. Numerous colleagues agreed with the take of one close observer: “Davan is neither well-liked nor highly respected in the newsroom.”
Michael Ferro, an aggressive change-maker, has moved fast and will have to keep moving fast.
He and his new CEO Justin Dearborn will be expected to chart a new course for the company, with the March 2 call a likely coming-out party for that plan. Staff, readers and investors all want to know: What’s next?
As of the Monday stock market close, TPUB stock has bumped up to $8.39, up 10.6% for the day. It share price has been lately volatile, ranging from a 52-week high of $21.89 to a low of $5.45.
Among many questions, look for beginning answers to these as Ferro makes his case to shareholders this week.
• Strategy: With Jack Griffin gone, what happens with his five-point strategy? Which of the points does Ferro keep; which does he discard? “It’s not as simple as one may think,” Ferro told the Chicago Tribune recently. “It’s not about digital subscribers or print. Some of the biggest companies in the world are using our data and making billions of dollars on it, and we need to find a way how we tap into that so that our journalism remains stronger than ever.”
How much of his new strategy will he outline Wednesday?
•The New Leadership: Ferro has already put Justin Dearborn into place as CEO. Dearborn starts his first full week on the job as Ferro’s close confidant and business partner. Which other execs will they keep and which will they replace? How will he describe that process – and timeline – to wary investors?
• Financing: Ferro’s $44 million investment was chiefly aimed at acquiring the Orange County Register. That would leave the new TPUB in the same, tight financial condition that the Jack Griffin-led TPUB faced. Griffin tried to navigate the almost-impossible course of transforming a single-class public company amid overwhelming ad revenue downturns. TPUB, today, still has very little financial room to maneuver. How will Ferro now deal with that reality? He’ll want to invest in new initiatives, but where will the money come from? Mounting severance pay will also eat into the money that Ferro and Dearborn can direct to new initiatives. The company paid $2 million to Jack Griffin and additional payments could easily add several million more, depending on how sweeping the executive change becomes.
In a nutshell, how long can TPUB stay the course, and, of course, what course?
• The Role of Technology: Ferro’s talked up data science and AI. How will those drive revenue – sooner than later? As Macquarie Group financial analyst Matthew Brooks, who covers the Tribune, puts it succinctly, “Data science could create a lot of value, but not as a public company.” Translation: Application of deeper analytics will bring in more money – but only over the long term.
• Orange County Register acquisition: Will Ferro still pursue it, actively participating in the March auction?
With all of these questions, there’s still a new guy on the block optimism — a guy with skin in the game – that some observers find appealing.
“There’s much to be said for the fresh perspective of a group of tech-savvy executives from outside of the newspaper industry,” said publishing veteran Jim Friedlich of Empirical Media. “These guys [Ferro and Dearborn] have built value in health information, e-commerce and other data-driven fields. If they can port that expertise thoughtfully to the publishing business shareholders and readers alike will benefit.”
Whatever course Ferro and Dearborn chart, this set of changes mark still another reset for Tribune Publishing. Each reset costs time. Time costs money, and both are in short supply at TPUB.
CEO Jack Griffin’s 18-month redo, post- Tribune split from its mothership, Tribune Company, in mid-2014 was only the latest twist since Sam Zell took control of the company in late December, 2007, performing a clean sweep of top Tribune management, installing his own people and then entering the famed five-year bankruptcy from hell (David Carr’s 2010 nail-in-the-coffin column: “At Flagging Tribune, Tales of a Bankrupt Culture”).
American dailies have endured so much in the last decade, but Tribune’s own case history is one for the ages. It’s tough enough for any newspaper publisher to make the necessary transition to the mainly digital world now arriving, but in the Tribune case, we’ve seen unending transition and far too little transformation.