In the wake of a weak quarterly earnings report from corporate parent Tribune Company, the newspaper is expected to cut 150 more positions, including 70 newsroom staff. The fresh wave of cuts would account for more than 5% of the newspaper's work force, according to the paper, which reported the news late Friday. Unnamed executives cited in the story hope to accomplish the cuts with voluntary buyout packages, making layoffs unnecessary--but that option may still be open.
In the most recent quarter, Tribune Co.'s overall operating revenues slipped 4% to $1.2 billion. Operating profit was down 16% to $181 million. Tribune's publishing operations took the hardest blows--with total revenue falling 5% to $931 million, while profit tumbled 18% to $140 million. Ad revenue in particular fell 6%, or $47 million.
The troubled Los Angeles Times has come to symbolize the issues facing the Tribune Co. and newspaper industry as whole. Former editor Dean Baquet publicly refused to carry out Tribune executives' orders to cut newsroom staff, and was forced to resign in November 2006.
Around the same time, the company also axed publisher Jeff Johnson, who supported Baquet's refusal. These acts of disobedience made them a cause celebre among newspaper journalists, who feel that corporate masters are sacrificing journalistic quality to keep profit margins high.
The paper also found itself at the center of the drawn-out auction of the Tribune Co., which ended earlier this month with the announcement of its acquisition by Chicago real-estate mogul Sam Zell for $8.2 billion. Zell's competitors in the auction, Ronald Burkle and Eli Broad, are Los Angeles-area billionaires whose chief purpose seemed to be obtaining control of the Los Angeles Times. Hollywood mogul David Geffen was also said to be interested in the newspaper.
Adding to the drama, the story of the Los Angeles Times is closely entwined with the Chandlers, the powerful family that forced Tribune to initiate the recent auction. The paper was founded in the late 19th century by General Otis Gray, a Chandler ancestor. His son-in-law, Harry Chandler, led it into its glory days. The contemporary Chandler descendants sold the paper to Tribune, along with other Times-Mirror properties, in 2000. Then they spurred the Tribune to auction the entire company in 2006, after expressing disgust with what they called poor management. The deal with Zell allows them to extricate themselves from the business.