LA Observed file photo of the Los Angeles Times building at 1st and Spring streets.
The Tribune Co. took concrete steps on Tuesday to formally spin off its newspapers from the parent company and, some would argue, cast them adrift from the more profitable TV stations until someone comes along to buy the LA Times and other papers. But Times reporters and editors have already gotten a new look at life as a corporate orphan, and it isn't reassuring. According to several staffers, the newspaper now has to pay rent to Tribune's real estate arm for space in the building that bears the Times name. More immediately, that apparently means the Times newsroom budget is being dinged for the use of conference rooms where staffers hold training session, project meetings and brown-bag lunches to discuss technology and other topics. And because it's the end of the year, when the editorial budget well typically starts to run dry, staffers tell me the Times can't pay the charges. At least fewer meetings is a good thing, I guess. One anecdote going around, unconfirmed by me, is that the Times was quoted such a high price to use the upstairs auditorium where Times gatherings have been held for decades that an event with movie directors for The Envelope Hollywood awards section was moved to USC.
These are not happy days around the Times building, by most accounts. Several newsroom veterans are leaving on buyouts or retirement by the end of the year. There is rising discontent among the women who remain (and among women who have left on their own) over the working culture and prospects for advancement in the shrinking, male-dominated newsroom. There is the lingering cloud of concern about the future of the paper and whether it will be sold and to whom; Tribune has already said there will be layoffs, mostly outside of editorial. And on a lesser scale, I still hear concern from some staffers about sharing the corridors of the former LA Times flagship headquarters with workers who come in to work the telephone boiler-room operations that lease space. The internal access doors to the newsroom floors have been locked amid complaints about creepy encounters.
Here are stories in the Times and Chicago Tribune about Tuesday's corporate machinations to spin off the newspapers. The new print-centric company, Tribune Publishing, will apply to be listed on the New York Stock Exchange.
From the LAT's Walter Hamilton:
In cases like this one, spinoffs are Wall Street's version of addition by subtraction. Because advertising revenue of Tribune's publishing unit is declining steadily, splitting off the papers could make the rest of the company more appealing to investors.
It also would clear the way for Tribune to focus on its more valuable broadcast properties, such as KTLA-TV Channel 5 in Los Angeles and WGN in Chicago.
Monday's filing demonstrated that the newspaper unit still relies heavily on print advertising, which has fallen sharply across the industry in recent years.
Last year, 61% of the newspaper division's operating revenue came from advertising, according to the filing. The unit recorded net income of $61.4 million for the first nine months of this year. Revenue was $1.3 billion.