Tribune's New Ferro Era Begins, With Massive Leadership Change
The Jack Griffin era at Tribune Publishing is over – almost before it had really taken hold. The company this morning confirmed the sweeping reorganization of its top management that I had reported on Tuesday (“Michael Ferro Cleans The House That Jack (Griffin) Built”). In the sweep of a month, the roles of Tribune’s publishers and editors have been reconfigured and doubled up; the top leaders of its last “transformation” are gone, and a new idiom is being established to describe the company’s efforts to claw itself out of what appears to be a deepening hole.
The credit (or blame) for all of this change will rest on the shoulders of Michael Ferro, the tech investor with a longstanding side interest in newspapers who shocked the Chicago media elite when he bought a 16.6% stake in the company and, as I reported, quickly began to exercise the power his attendant position (despite the title of non-executive chairman) gave him. Griffin’s exit followed quickly upon that development.
Ferro was the beneficiary of a carefully scripted tribute during this morning’s earnings call with investors provided by his newly appointed CEO Justin Dearborn, who made his public debut running the call, and CFO Sandy Martin.
We will add our own tribute to theirs: if the new, next Tribune can apply half the whirlwind energy of its new impresario to its next reinvention, the ever-struggling newspaper industry may have something to watch. Whether it’s a turnaround story or yet another sad chapter leaving to an inevitable bad climax depends on what strategy all of the changes announced today are in aid of.
First published at Politico Media
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On the call, Dearborn steered investors away from the “five-point strategy” they’d heard so much about from Griffin and toward a new framework—call it the 4 C’s. Dearborn led with “Content-first,” with the rest of them being culture, commerce and community. But the detail was scant, and so we’re left looking at the changes that have been announced and seeing what we can uncover from them.
For starters, the exit of Denise Warren and Michael Rooney, two senior executives that ex-CEO Griffin had brought in to transform TPUB. Warren, in what turns out to be a brief nine-month tenure, had moved quickly to remake the company’s digital strategy, borrowing from best practices she had helped lead at the New York Times. (In fact, her effort to bring up Tribune’s substandard digital subscription performance has just seen the implementation of a new pay system at TPUB papers last week – as she was preparing to exit the company.) Rooney’s task as chief revenue office was to accelerate national ad sales.
On today’s call, neither Warren nor Rooney, nor for that matter, Jack Griffin, was mentioned, oddly considering their major efforts over the past year, though Warren was mentioned in the press release.
But they do disclose one issue faced by Tribune. Part and parcel of the Ferro–Dearborn changes is a movement of decision-making power out of the company’s New York City-based executive office — one reason, I’m told, for New Yorker Warren’s departure. It’s a quite understandable move for a company twin-headquartered in Chicago and Los Angeles, but the Warren exit also points to the difficulty the company may have attracting change-making talent if relocation was an issue even in this terrible environment for newspaper executives.
Both of the departing executives’ recent histories further underscore the volatility of that environment. Warren had left the Times, after a 26-year career, in an executive reorganization of that company in the fall of 2014. Top ad exec Rooney had run afoul of then–Dow Jones CEO Lex Fenwick, during what turns out to have a Dark Age at that company.
Next: Gone — or moved — are the publishers across the country that had provided the company’s on-the-ground structure. As I had signaled a day ago, Tribune announced today that it is installing editor–publishers at its metro properties, thus both saving one high-paying position and giving a new face to its “content-first strategy.”
Davan Maharaj takes on that job at the L.A. Times and Bruce Dold, just moved into place as editor of the Chicago Tribune two weeks ago, does the same in Tribune’s hometown. Similarly, across the country from Fort Lauderdale to Hartford, what were two jobs are now one.
Meanwhile, two displaced publishers, the L.A. Times’ Tim Ryan and Chicago Tribune’s Tony Hunter, are taking on corporate roles, as president of Publishing and President of National Revenue and Strategic Initiative, respectively. Those may be seen as new long-term roles and/or as good places to move two highly paid execs with generous severance contracts.
What do we make of the editor-publisher strategy? On a business level – and that’s where the money is generated, right – it is bewildering. Neither Davan Maharaj nor Bruce Dold, for instance, have any business-side experience. Neither do most, if not all, of those named “publisher’ today. Maharaj will report directly to CEO Justin Dearborn, again showing the editor’s much-observed talent to “manage up”. In that relationship, long-time editor Maharaj will have a boss who himself has no media revenue-generating experience. The other new publisher/editors will report to Tim Ryan.
On the call, Dearborn laid out “content-first” as a notion, it’s an appealing one, and if a properly executed (it will include a new LA.com site produced by the Times) could offer business value to be leveraged. But who is going to lead that leveraging?
At a national level, with Warren – who most within the company have credited with leading a smart, logical move into the modern digital business – gone, it’s unclear where digital business leadership will come from.
Both Tim Ryan and Tony Hunter are capable newspaper operators, but neither possesses Warren’s skills.
Then, locally, we get to the little-asked question of a publisher’s role in the community, and in generating local ad sales. Those are key roles – though done with great inconsistency across the country. Editors seldom possess those ad-selling abilities; a relative few can move easily among the many elements of their communities.
Finally, there’s the unspoken elephant in the new Tribune house: Publishers are supposed to tend to the business of the paper and editors to serving the readers. The inherent conflict in conflating the two roles must be acknowledged.
Clearly, the editor/publisher move will save money in the short-term, as one high-salaried position is eliminated, but the cost/benefit proposition here demand a B-school study.
The editor/publisher combo is at just one consolidation strategy. Expect more consolidation strategies to roll out of the new leadership. One we can expect to see some movement on this year: An effort to further combine, or rationalize, the Chicago Tribune and the Chicago Sun-Times.
Included in today’s blitz of announcements: Ferro is donating his stake in Wrapports – the Sun-Times’ holding company- to charity. Trend alert! We’re now seeing a newspaper-led redefinition of the old term “charity case.”
Ferro follows in Gerry Lenfest’s footsteps, as the Philadelphia Inquirer–Daily News owner gave away his stake in those papers in January. Ferro’s donation tells us two things. First, the financial value of many newspaper holdings is getting down to a dollar, more or less; Ferro’s Sun-Times interest isn’t worth much. Second, the donation removes an obvious conflict as the Tribune’s new powerhouse looks to save cost in Chicago, which will probably include likely further consolidation of the two papers. (From the TPUB release: Ferro’s “divestiture will create a very clear separation of ownership and avoid perceived conflicts of interest, while also providing millions of dollars for community programs and other charitable causes.”)
Such continued cost-saving is survival strategy. Today’s scheduled TPUB call was, at base, a financial one,
reporting on the fourth quarter and full-year 2014, though TPUB had already outlined those numbers. The financials do tell us a lot though and lay out just how tough a proposition Ferro, Dearborn, Hunter, Ryan and their group of editor-publishers face immediately.
Ad revenues ended up down 8.7% for the fourth quarter, a modest improvement over previous double-digit losses. Circulation revenues were flat. TPUB, which has found itself on the low end of performance among all the struggling newspaper chains, has a deepening hole to climb out of.
It’s in that context that we must view Justin Dearborn sketching out for investors this morning a strategy that will be tech-driven. At a high level, that’s incontestably wise; smart publishing companies are indeed moving tech to the center of the business. Yet, even those who did that years ago now — the Financial Times and the New York Times, both leaders — have been able to show only incremental business improvement as a result. Directionally, it’s the right thing to do – but it doesn’t turn around revenues and profits much in the early years.
What are the responses so far to the dizzying moves? Investors apparently like the forcefulness of change; TPUB is up 6% today. Financial analysts were less than engaged; only two asked questions on the call. Tribune newsrooms are trying to make sense of what just happened, and what it will really mean to the journalism they produce.
What continues to matter are the old standbys, time and money. CFO Sandy Martin said that TPUB’s cash reserves are in the $80 million range, a declining number given Ferro’s $44 million investment plus the $41 million, or so, the company had on hand at the end of 2014. It’s not much, considering the challenges ahead. At least half of it is earmarked for the acquisition of the Orange County Register, and we can now figure that high single digits of executive severance will further drain the coffers.
Then, there’s the time. Jack Griffin, it turns out, had 18 months. Time is what the company will need to reap the benefits of a content-first, tech-centric strategy.
Given a business that is circling failure in a rapidly decaying orbit, do Michael Ferro and Justin Dearborn have even as much time as Griffin did? Can they possibly have less?
A final note: While the company has led with its new 4 Cs, there’s one other letter it has not yet addressed, the big digital S word: scale. The fundamental question here: Is Tribune Publishing really a national company, with big newspaper-based operations, or as many have suggested, is it too small to succeed in these times of digital business behemoths? Behind all the changes announced today, that question lurks.
Read Davan Maharaj’s memo to his staff on his promotion:
To: All
Subject: Message from Davan Maharaj
Colleagues:
You’ve heard the news: Michael Ferro, the new chairman of Tribune Publishing, and Justin Dearborn, our new CEO, have asked me to take on additional responsibilities as publisher of the Los Angeles Times.
I’m deeply honored and would like to take a moment to explain what this change means for us.
I will continue to serve as editor and work with our masthead to transform The Times into a state-of-the-art newsroom, able to compete and excel in all media. As publisher, I will also oversee many aspects of our business operations, expanding on the role I’ve held as a member of the senior leadership team.
Combining the duties of editor and publisher reflects a recognition that journalism is at the heart of both our civic mission and our business. As our industry has changed, newsroom leaders are in an ideal position to know our readers’ interests, to know our markets and to work closely with others in the company on key business initiatives.
Allow me to address a question you may have – and to assure you that my new responsibilities will not diminish in the slightest my commitment to the integrity and independence of our news product. Quite the opposite: I am keenly aware that our business success depends on readers’ confidence in our journalism, in their faith that what we report is impartial, accurate and intended above all to serve their needs.
Over the last week, I’ve had a number of conversations with Michael and Justin, and I’m excited by their ambitions for our company. They have challenged us to position The Times as a global brand.
This is an objective that makes the utmost sense – for L.A. is more than just a city. It is a remarkable crossroads of culture and creativity that has long captured the world’s imagination.
As publisher, I will lead our efforts – on both the editorial and business sides – to make The Times the primary destination for readers and advertisers everywhere who are interested in Los Angeles, California and the West.
This is a mission I feel in my bones. I began my career as a cub reporter in my native Trinidad, an island where, it is often said, the Ganges meets the Nile. From my first day in Los Angeles, I have been energized by its boundless variety and vitality, and as editor I have pushed us all to reflect those qualities in our coverage of L.A.
I came to The Times in 1989 as a summer intern, excited by the opportunity to be part of one of the world’s greatest news organizations. Over the years, The Times has maintained both the quality of its journalism and the fearlessness of its ambitions.
Our work makes a difference, and a profound one. When we expose corruption, those in power often respond by passing laws and righting wrongs. When we capture the energy of life around us, we move the dial on the latest trends. More than any other news organization in California, we lead the conversation.
We are all partners here, from the journalists in the newsroom to those who market, print, promote and deliver The Times; who sell the advertising that funds our news gathering; and who support and enhance our work in other ways too numerous to detail here.
Since becoming editor in 2011, I have seen how effective our newsroom is when everyone pulls together to meet the demands of a breaking story, a complex investigation or a multi-part narrative. As publisher, I hope to see the same collaborative spirit at work throughout the company. I want to encourage us all – no matter what floor we might work on – to tap into the creativity throughout the building to help us realize our shared goals.
The challenges that lie ahead require all of us to pull together, and with your help, I know we can position The Times to be a world leader in news and information.
–Davan