Tribune Publishing released mixed Q1 financial results as
the fight over its pending sale heated up.
The publishing giant saw its revenue fall to $173.5 million, down from $206.4 million in the same quarter of 2020.
This was caused, in part, by a 26.4% decline — to $20.3 million —i n ad revenue. In addition, circulation revenue fell by 2.7%, or $2.5 million. Home delivery took a $5.9 million falloff, and single-copy sales decreased by $2.3 million.
However, the decreases were partially offset by a $5.8 million hike in digital subscription revenue stemming from an increase in the number of digital subscribers and higher subscription rates per subscriber.
Overall, net income from continuing operations increased to $6.1 million, versus a net loss of $49.0 million in the first quarter of 2020.
The results were released as Alden Global Capital seemed poised to acquire Tribune Publishing on May 21 even while parties sought to avoid it. There was no conference call, due to the pending transaction, the firm said.
The Washington Post reports that while Alden vowed to provide $375 million in cash to the company, the hedge fund has signaled it will saddle Tribune, which emerged from bankruptcy nine years ago, with debt.
Although Alden said earlier it can fully finance the transaction with cash on hand, a passage in the deal states Alden “has the right to seek to finance a portion or all of the $375,000,000 in cash with the proceeds from debt and/or equity financing from its affiliates or third parties.”
“That means they’re going to try to borrow money," Doug Arthur, an analyst with Huber Research, told WaPo.
Separately, hotel magnate Stewart Bainum Jr. has increased his commitment to $300 million in an effort to acquire the company. He can technically mount a $680 million bid, higher than the $633 million being offered by Alden.
The holdup is that while Bainum has found buyers for most of the chain’s titles and is prepared to take over The Baltimore Sun himself, no buyer has been found for the Chicago Tribune, sources told a Tribune reporter.
All parties are working against a deadline — a shareholder vote on Alden’s offer is set for May 31.
In another development, the NewGuild union, which represents Tribune newsroom workers in nine metro areas, said in a Securities and Exchange Commission filing that Alden’s $17.25 per share offer devalues the company, according to Poynter.
The union, which is also a shareholder, argues its members “stand for journalism and organizations that create quality journalism, which is vital for political accountability and democratic governance at all levels,” Poynter adds.
NewsGuild says this “gives us one reason to oppose a sale to Alden, particularly, since they have demonstrated a consistent policy of profiting from liquidating rather than building news publishers. Our other reasons, however, are as shareholders who seek maximum value from our investment.”